Shabana Mahmood, Labour MP for Birmingham Ladywood, responded on Friday 23rd July to two reports by the Regulator of Social Housing into Exempt Accommodation, calling their findings “shocking, appalling and deeply worrying”.
The reports lay bare a litany of failures and abuses, and find two providers of Exempt Accommodation in Birmingham as having “inadequate risk management processes and internal controls”.
Asha-Shahada Housing Association Limited and Concept Housing Association were found to have failed their tenants across a plethora of issues. These include:
- Significant weaknesses in business planning framework
- Inadequate risk management processes and internal controls
- That the board has failed to manage its affairs with an appropriate degree of skill, independence, diligence, effectiveness, prudence and foresight
- That has failed to demonstrate that the arrangements it has entered into do not inappropriately advance the interests of third parties.
Most worryingly, both providers were found to transfer “…a very significant amount of rent and service charge income [they] receive to third parties on an ongoing basis.”
The report went on to note that “in addition to payments made by [both providers] to third parties, tenants are required to pay service charges ineligible for Housing Benefit direct to their respective third party managing agent.”
Exempt Accommodation is designed to provide housing to some of the most vulnerable people in Birmingham, and across the UK.
For businesses to found to squeeze huge payments payments while failing tenants on every level underscores the need for urgent reform.
Shabana Mahmood, MP for Birmingham Ladywood, said: “The Regulator’s report into two of the largest providers of Exempt Accommodation in Ladywood makes for harrowing reading – it is shocking, appalling and deeply worrying.
“The people using Exempt Accommodation are some of the most vulnerable in our communities, and in desperate need of additional support in the housing they are provided.
“This report shows how appallingly they have been let down. Amongst the litany of failures identified in the report lurks an open secret – that this type of behaviour from providers is endemic, and that this report is barely the tip of the iceberg .
“I have written to the Housing Secretary again today. It is imperative that he gets a grip of the situation. For too long the Government has shrugged off calls for reform – from me and others – insisting there is nothing fundamentally wrong with the Exempt Accommodation sector.
“This report gives us a glimpse of the truth, and the Government must act – and act now.”
Concept response
Responding to the reports, Concept said: “We are really disappointed to receive today’s notice of non-compliance with elements of the Governance and Financial Viability Standard, but very much welcome the opportunity to continue to work with the Regulator of Social Housing to achieve compliance over the coming months.
“Concept has grown rapidly over the last two years and we recognise the importance of ensuring that our governance framework keeps pace with that growth.
“Steps to strengthen our governance framework have no doubt been hampered by the most challenging times in our living memory.
“Significant operational resource has been dedicated to tackling homelessness issues in some of the most deprived areas of the country, including Birmingham and Bradford.
“We are however now at a point where we will be recruiting additional board members and engaging with specialist consultants in the sector to support us to further develop and embed a strong governance framework.
“Despite rapid growth we prudently manage our housing portfolio and lease commitments with providers to ensure we can meet our housing commitments to local authorities, tenants and licensees.
“We do this whilst maintaining effective and efficient financial controls, generating an operating margin of 3% for the year.
“As a not-for-profit provider, surpluses generated are invested back into the delivery of providing homes and related support services for those in need.
“We also remain up to date with required health and safety checks at all our properties and are pleased that we were able to demonstrate to the Regulator that there were no issues relating to a breach of either health and safety requirements or the Home Standard.
“Our Resident and Community Engagement (RACE) team and property inspectors regularly conduct in the region of 25 customer engagement surveys a day which report satisfaction levels of over 80% of those surveyed being either extremely or very likely to recommend living in a Concept property.
“Concept exists to support the housing and support needs of some very vulnerable people.
“Private landlords frequently turn such vulnerable people away and, without us, often there is no other choice but to sleep on the street.
“We don’t think this is an acceptable situation in the modern world and so are doing all we can to provide a better option.“
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