Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 24
24
Accepted
The lease-based model has its place in exempt accommodation, by enabling access to properties for...
Recommendation
The lease-based model has its place in exempt accommodation, by enabling access to properties for decent providers who would otherwise not be able to purchase properties outright. However, it can be exploited by those whose primary objective is to make huge profits at the expense of the taxpayer: we received examples of profits in the millions of pounds. The Government must set out how it will clamp down on those exploiting the lease-based model for profit and prohibit lease-based profit-making schemes from being set up. This should include how it will ensure that there is full transparency over ownership structures and how income from housing benefit is being used. (Paragraph 109) Exempt Accommodation 51
Government Response Summary
The government says it will strongly support local authorities in taking action against exploitative landlords. Measures in the Supported Housing (Regulatory Oversight) Bill include a proposed fit and proper person test. They will also consider how they can align the licensing regime and national standards for support with Housing Benefit regulations.
Government Response
Accepted
HM Government
Accepted
61.T he Government is clear that it is utterly unacceptable that a small minority of unscrupulous supported housing landlords are exploiting some of the most vulnerable people in our society. The regulator has taken action against some registered providers who provide exempt accommodation through a leasing model, where it has not had adequate evidence that those providers are managing their risks effectively. 62.T he Government will strongly support local authorities and other authorities in taking action against exploitative landlords including those who are exploiting the vulnerable needing supported housing. 63. However, we should be clear that not all lease-based providers are delivering a poor service, and the model provides much-needed supported housing supply in some instances. 64.T he regulator has already taken regulatory action against a number of lease-based providers and is working closely with those providers to address their issues. The regulator has also, where necessary, intervened to make statutory appointments to the Boards of some of these supported housing providers. Furthermore, a majority of applications for registrations received by the regulator since 2015 (when its registration criteria changed), from those who provide supported exempt accommodation through a leasing route have been unable to demonstrate that they meet the regulator’s registration criteria, and so the regulator has not been able to register them. 65. Measures in the Social Housing Regulation Bill are designed to also provide additional tools for the regulator in its regulation of registered providers, which include lease-based providers. These are: • Look through power – This will enable the regulator to get information from people outside of the regulated sector and, for example, allow the regulator to investigate potential wrongdoing by examining the financial accounts of organizations thought to be inappropriately profiting from a registered provider. • Non-profit definition (Designation) – This measure will clarify the definition of a ‘non-profit’ organisation to ensure providers are designated according to the substance of how they actually operate (or intend to operate) rather than solely looking at constitutional form or charitable status (which forms the current legislative approach). The Regulator will be able to now look at a provider’s operations to make the appropriate designation. This will ensure registered providers who do not truly operate as non-profit organisations are given the appropriate designation and will not receive the benefits awarded to non-profit providers. • Notification of Change of Control – This will require registered providers to notify the regulator when there is a change in who has substantial control over its operations. This will ensure the regulator has a clear picture of who has control over a registered provider and the social housing that it manages, giving sight of potential issues and misconduct relating to who is in control of a registered provider. 66. Measures in the Supported Housing (Regulatory Oversight) Bill include a proposed fit and proper person test to ensure that those providing supported housing are appropriate. We will also consider how we can align the licensing regime and national standards for support with Housing Benefit regulations.