Non-compliant provider now houses a third of all exempt accommodation claimants in Birmingham

Exempt accommodation is a type of housing that is often used for people who find it difficult to access other forms of housing, such as prison leavers, recovering addicts, refugees and those fleeing domestic violence.

Since a small level of support is required, this type of housing is exempt from usual Local Housing Allowance caps, meaning providers can often charge very high rates of rent which are well above usual housing benefit levels.

In many cases, registered providers employ managing agents to provide the accommodation and support services by entering into short-term lease arrangements with these companies. In exchange, the housing associations receive a management fee.

Exempt accommodation has come under heightened scrutiny of late, with the government set to bring in further measures to try and raise standards in the sector, including by giving councils more powers to take action against landlords.

Birmingham has become the capital of exempt accommodation in the country, with the number of claimants rising from 3,679 in 2014 to more than 22,000 last year.

The total number of claimants dropped slightly this year compared with last year, with the council recording 21,179 claimants Birmingham as of 22 March. Despite the drop in claimants, the number of exempt accommodation properties has increased to 8,427 – up from 7,839 homes last year.

The discrepancy between properties and claimants is because exempt accommodation properties often come in the form of houses in multiple occupation, and as a result some can house several rooms.

The latest figures revealed that only five providers currently manage 71% of the whole exempt accommodation provision within Birmingham.

These include four non-compliant providers: Reliance (8,034 claimants), Concept Housing Association (3,269), Ash Shahada Housing Association (2,162) and Sustain UK (1,415).

Trident Group is the fifth biggest provider, housing 522 claimants. It currently has the top governance and financial viability rating after being assessed by the RSH in April last year.

The slight drop in numbers comes as a number of providers either pulled out of the exempt space or closed down completely. Last year, New Roots, which housed 1,017 claimants last year, pulled out of the sector and Prospect Housing, which housed 927, closed down last year.

It is understood that some of these claimants moved to other providers, such as Reliance, when these housing associations ceased operations.

It also comes despite a greater focus on the exempt sector by Birmingham Council. Birmingham was one of five councils given extra cash to try and drive up exempt accommodation standards.

A recent document assessing the success of these pilots, which was leaked to Inside Housing, revealed that Birmingham Council received 390 applications from new providers over the course of the pilot and rejected 211 from accessing the higher housing benefit.

In a statement released to Inside Housing, a spokesperson for Reliance said the landlord has taken steps to avoid saturation.

However, they added: “We feel saturation within Birmingham will not be addressed properly unless a more holistic approach is taken and local authorities across the country are given a unified understanding on exempt accommodation definitions on levels of care support supervision. What we have found is that there is a broad spectrum of interpretation which makes it very difficult to have schemes approved.  

“More clarity and unification will allow exempt accommodation providers to meet criteria and secure provision within local areas for local eligible tenants.”

Ian MacGregor, director of Sustain UK, said: “Sustain UK is in the final stages of completing a two-year business transformation process, and we’re now delivering a range of new initiatives to support vulnerable and homeless people across Birmingham.”

David Fensome, Chief Executive of Concept Housing Association, said: “There continues to be a clear need for good-quality accommodation and support to help residents find their feet and move on to live stable, independent lives.

"We work closely with Birmingham City Council and our other partners to support residents – whatever challenges they face.”

Inside Housing has contacted Ash Shahada for comment. Trident declined to comment.