Inquiry launches after exempt accommodation provider’s trustees paid over £1m of funds
The charity watchdog has opened a statutory inquiry into a Bolton-based exempt accommodation provider after it found that payments of more than £1m were made to nine of its own trustees over a period of seven years.
The Charity Commission was investigating “potential conflicts of interest and possible mismanagement of funds” at My Space Housing Solutions, which featured in The Housing Benefit Millionaire, a recent investigation by the BBC’s Panorama documentary series.
The commission opened a compliance case in July. It examined My Space Housing Solutions’ records and found that £1m of funds had been paid to nine serving trustees since 2015. It has now escalated the case to a full inquiry.
In a statement, the watchdog said: “These payments raise concerns about conflicts of interest and an inquiry has been launched to assess potential misconduct and mismanagement.”
However, it added that it had not made any conclusions and the opening of the inquiry is not a finding of wrongdoing.
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My Space had raised an objection to the wording of the commission’s statement, arguing it “creates an impression of wrongdoing, which was not the case”.
The Horwich-based organisation, a registered charity, said there was “no malice” in the payments made to trustees, which were “appropriately recorded” and disclosed to its auditors.
“The mismanagement purely relates to poor governance in administrative functions,” it added.
My Space, which was rated non-compliant in 2020, has over 1,500 tenants and has grown rapidly since it was established in 2012. As an exempt accommodation provider it offers supported housing for those with few other options, such as rough sleepers, refugees and prison leavers.
Because exempt landlords provide loosely defined care and support services, their tenants can be exempt from housing benefit caps and providers can charge much higher rents than regular landlords.
This issue was explored in an August BBC Panorama episode, which focused on My Space Housing Solutions. The investigation uncovered property sales worth more than £120m linked to developer Paul O’Rourke and My Space, the charity he set up.
Responding to the Panorama investigation in August, My Space said it only ever claimed housing benefit for exempt accommodation, not benefits for personal care.
It said Mr O’Rourke was one of a “number of developers and suppliers” it worked with and that all transactions with him and his companies were “conducted at arm’s length”.
The charity added: “As a result of engaging with the BBC we recognise, however, that there could be a perception to the contrary and, as a result, trustees who are employees or former employees of Mr O’Rourke and his companies will be stepping down from the board.”
In August, My Space said it had taken the decision to apply for deregistration from the Regulator of Social Housing on the basis that “we provide exempt accommodation and not social housing”.
A My Space spokesperson said: “We have raised an objection to the wording of the statement issued by the Charity Commission this week. Specifically, where clarity is not being given that all these payments, which included director salaries, were appropriately recorded within the charity’s accounts and were disclosed to the charity’s auditors appropriately.
“The mismanagement stated relates to the fact that Charity Commission approval was not obtained prior to making these payments as outlined within the charity’s governing document.”
It added: “The charity is now rewriting its articles of association and strengthening its governance.”
The Charity Commission said it was aware of the BBC Panorama investigation and that regulatory concerns were already under investigation when it was broadcast.
