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‘For-profit’ association stripped of exempt accommodation status by Birmingham City Council
A non-compliant housing association has been stripped of its exempt accommodation status in Birmingham after it was deemed to be operating as a for-profit provider.
Green Park, which is currently graded non-compliant by the Regulator of Social Housing (RSH), was informed two weeks ago by Birmingham City Council that it did not meet the criteria to be deemed a provider of exempt accommodation and its tenants would no longer be able to secure housing benefit at higher exempt accommodation rates.
Green Park, which owns 897 properties across London and Birmingham, is one of a number of registered housing associations operating in Birmingham and providing exempt accommodation.
Exempt accommodation refers to a category of supported housing that is funded directly by the Department for Work and Pensions (DWP).
Due to landlords providing loosely defined care and support services, their tenants can be exempt from housing benefit caps and associations can charge much higher rents when compared with normal landlords.
It is often used as a means of housing those with very few other housing options, such as prison leavers, rough sleepers, refugees and migrants, and those experiencing substance abuse issues.
However, housing benefit regulations specify that housing associations providing exempt accommodation should not be provided by ‘for-profit’ organisations if their tenants are to receive an enhanced housing benefit rate.
Inside Housing understands that after a wide-scale review of its properties, Birmingham City Council has now judged Green Park to be a for-profit provider and therefore ineligible for the enhanced rates.
The review also found several issues with the support provided for tenants across a number of Green Park properties. It said that this support did not meet the standards required of an exempt accommodation provider.
Green Park said that it had been operating in Birmingham since 2018 and that the council had approved all of its applications for exempt accommodation until now. It also has the option to appeal the decision.
Last year, Green Park was graded non-compliant for both governance and financial viability by the RSH after significant failures were discovered, including inadequately managed conflicts of interest, potential risks to tenants’ safety and only one person on its board. There is no indication that this influenced Birmingham Council’s decision.
The removal of its exempt status by the council means that residents living in Green Park properties will now only be able to claim housing benefits under regular Local Housing Allowance rules, or by a claim for housing costs through Universal Credit.
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This will mean the level of benefit that residents will be able to claim will be far lower than they have previously been able to secure because of Local Housing Allowance and Universal Credit caps. This is likely to make it harder for these residents to pay their housing costs. It is understood that approximately 450 people may be affected by the changes.
The council’s decision comes as part of a wider crackdown on exempt accommodation in the city. The number of these properties has skyrocketed over the past few years and is now in the thousands. While many providers run essential housing and services for vulnerable people, there are examples of poor housing conditions and instances of anti-social behaviour in certain communities in Birmingham.
A full review of Green Park’s properties and claimants was launched in the summer after the council reviewed a sample of its properties where exempt accommodation rates were being claimed.
Inside Housing has seen a letter from the council to Green Park in July, following an inspection of one of these properties in which it found that the three residents did not meet the criteria to receive the enhanced exempt accommodation rate of housing benefit.
Under the rules of exempt accommodation, landlords and claimants must be able to prove that the person living in the property needs support, and that the support being provided is “more than minimal”.
The council deemed that on both counts, these criteria were not met. This, along with inspections of other buildings, led to a full review of Green Park’s properties and the latest decision.
Birmingham City Council’s benefits advice team is now providing support to those individuals whose circumstances have changed. In a letter from Green Park to its managing agents, it said that the DWP had offered it a support package regarding the transition of residents from one benefit to the other.
As part of an investigation into Green Park last year, the RSH found that Green Park operated a model that leased properties from several third parties that deliver landlord services on its behalf, with Green Park transferring a significant amount of rent to the third parties.
The regulator said that Green Park was unable to assure it that these arrangements were not “inappropriately advancing the interests of the third parties”.
Responding to the council’s decision, a spokesperson for Green Park said: “Green Park Housing has been operating in Birmingham since late 2018.
“Until now, Birmingham City Council has approved our applications for ‘exempt accommodation’.
“Where concerns have been raised about a specific property, this has related to the conduct of our managing agents, and we have acted swiftly to resolve the matter to the satisfaction of all parties concerned.
“Since the council informed us of its decision, we have been working closely with Birmingham City Council, the DWP, our partner managing agents and the regulator to ensure our residents are supported, kept informed of the situation and are not disadvantaged, and we will continue to do so.”
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