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Birmingham Council refers nine fraudulent exempt accommodation claims to DWP
Birmingham Council has referred nine exempt accommodation claims that it believes were made fraudulently in the past 18 months, latest figures show.
As part of a wide-ranging review of exempt accommodation claimants, Birmingham Council, which is the largest local authority in Europe, said it had passed on nine potentially fraudulent claims to the Department of Work and Pensions (DWP) since April 2019.
In instances where a council believes a claim is fraudulent, it is passed on to the DWP for it to investigate.
Birmingham Council confirmed that in all nine cases, the landlord – whether a registered provider or a private provider – had made the claim.
The figures were revealed in a presentation carried out by the council officers to inform councillors on its overview and scrutiny committee, as part of an inquiry it carried out into exempt accommodation across the city.
Exempt accommodation is a type of housing that is often used for people who are considered to be hard to house 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 (LHA) caps, meaning providers can often charge very high rates of rent which are well above usual housing benefit levels.
In many cases in Birmingham, the housing is managed by registered providers which then use managing agents to provide the accommodation and management services, while keeping a small management fee for each claimant.
But exempt accommodation can also be provided by private providers, usually in the form of charities or community interest companies (CICs).
In recent years, exempt accommodation has ballooned in Birmingham: increasing from 3,679 claimants in 2014 to more than 22,000 as of March this year.
The increase in this type of housing across the city has raised concerns from local residents over the standard of accommodation being provided as well as a growth of issues such as anti-social behaviour.
As part of the council’s action to try and improve standards in exempt accommodation and ensure that money is legitimately claimed through the system, it set up the supported exempt accommodation team (SEAT) in April 2019.
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Since it began, SEAT has reviewed 5,207 individual claims across the city, across 32 providers of exempt accommodation.
As a result of these reviews, the council has been able to reclaim £3.6m in overpaid benefit, which has come from inaccurately or fraudulently claimed housing benefit. In total, the team has found nine instances of suspected fraud.
The DWP said that it took instances of fraud “extremely seriously”, but added that it was still extremely rare, with 95% of the £200bn of benefits being paid correctly.
When asked if any of the fraud claims were passed on to the police, the DWP said data protection laws prevented it from disclosing the progress or outcome of fraud referrals to any third party.
In the past 12 months alone, Birmingham Council has seen 390 applications for new providers of exempt accommodation, with only 62 being granted exempt status. Of the remaining applicants, 211 had their exempt accommodation status refused, while 117 had their rents restricted.
Last year, as part of a new initiative by the then named Ministry of Housing, Communities and Local Government, five different local authorities, including Birmingham, were given funding to try and address the exempt accommodation issues in these areas.
As part of Birmingham’s pilot, the council launched a new inspection team that would check exempt properties in the city and ensure they were of a good condition.
The team is made up of 11 officers and has since inspected 431 properties since November 2020, with 400 of these “reactive inspections” coming after complaints, safeguarding or health and safety concerns. It identified 1,770 category one and two hazards in the properties it checked, while three larger properties were subject to formal reviews to improve standards and one was hit by a closure order.
Off the back of the presentation by the council and evidence submitted by more than 100 people living in Birmingham, the scrutiny committee produced a 29-page report assessing the exempt accommodation situation in the sector and offered recommendations.
While acknowledging there were some good exempt providers in Birmingham, the committee said there had been a “worrying growth of growth of poorly managed, unsafe exempt accommodation, delivering inadequate support and safeguarding, particularly for people who experience homelessness and have multiple support needs”.
A spokesperson for Birmingham Council said: “Exempt accommodation rent for citizens is paid for through housing benefit, which is administered and paid by Birmingham City Council on behalf of the Department for Work and Pensions. This is the only area where there are regulations governing exempt accommodation where the council has a role – as the exempt sector is governed by the Regulator for Social Housing if they are a registered provider.
“The housing benefits team at the council checks all claims to ensure that they are correctly assessed. As a result, large sums of housing benefits overpayments have been identified and recuperated from landlords due to fraudulent claims or landlords not meeting their legal responsibility.
“This amounts to £2.5m since the pilot began in November 2020. Since April 2019, £3.6m in overpaid benefit has been identified and recovered which was inaccurately or fraudulently claimed. All fraudulent claims are referred to the DWP to investigate.”
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