MP accused non-compliant housing association of ‘failing tenants’ and ‘holding city to ransom’

Reliance has been a main contributor to that growth. The provider is responsible for nearly 8,000 exempt accommodation claimants in Birmingham, which equates to more than a third of all such tenants in the city.

Figures given to Inside Housing by Birmingham Council revealed that Reliance was paid £90m last year for its exempt housing and a total of £161m over the past four years.

In many cases in Birmingham, exempt landlords, including with Reliance, employ managing agents to provide the accommodation and support services. These organisations enter into short-term lease arrangements with the main provider and then take a a management fee.

Commenting on Reliance’s performance in her area, Ms Mahmood said: “I’ve come across a number of examples of bad practice by Reliance as a provider of this type of social housing that is failing my constituents and exacerbating the issues within the exempt accommodation sector.”

She picked out one particular case involving two Reliance tenants, who she claimed were “threatened with eviction, intimidated and left with less than an hour of one-to-one support during their tenancy at the hands of their provider, Reliance”.

She explained that the property these tenants had lived in required a number of repairs and that they only had gas for two of the six weeks they lived in the home.

In her speech, Ms Mahmood said: “It seems to me that it basically think it is too big to fail, that it has Birmingham City Council over a barrel, and they can essentially hold us all to ransom and therefore get away with this utterly outrageous behaviour.”

Reliance said it “strongly repudiated” Ms Mahmood’s accusations.

The MP was speaking during the second reading of Harrow East MP Bob Blackman’s Supported Housing (Regulatory Oversight) Bill.

The bill features a number of proposals, such as introducing a licensing scheme for all exempt providers, where they must adhere to national standards of care and support to be eligible for exempt rates.

In recent years, Reliance has become Birmingham’s biggest provider of exempt accommodation.

The £90m it received last year means Reliance received nearly four times more for exempt accommodation than the whole of Manchester, the city with the second largest exempt accommodation spend in England.

In 2017, Reliance was dormant housing association based in Gravesend and only acquired its first supported housing property in 2018. Last year, it was deemed non-compliant with the Regulator of Social Housing’s (RSH) Governance and Financial Viability Standard.

In its report following an investigation into the landlord, the regulator said Reliance failed to ensure that any arrangements it entered into does not inappropriately advance the interests of third parties or are arrangements that the regulator could reasonably assume were for such purposes.

The RSH also said: “It is our judgement that Reliance does not adequately reconcile and monitor the payments made to third parties, with evidence that the services are being provided to its tenants. As a result, there is a risk of third-party managing agents not providing the services being claimed.”

At the time, Reliance said it would review its working relationship with managing agents and adopting further processes to mitigate the highlighted risks, as set out in the judgement. It also said it would set up a dedicated team to address the regulator’s issues.

Responding to Ms Mahmood’s comments in parliament last week, a Reliance spokesperson said: “Reliance provides essential accommodation to thousands of otherwise homeless people across the city of Birmingham, and we are deeply disappointed by the unwarranted and unfair attack made on us in parliament by Shabana Mahmood MP.

“Although we are unable to comment on specific cases because of tenant confidentiality, we strongly repudiate the brazen accusations made by the MP and suggest that her allegations either misconstrue the facts or take them out of context because she simply does not have full visibility over the circumstances.

“It is particularly unhelpful to everyone concerned when facts are misrepresented and distorted, but as an organisation we will continue to prioritise the welfare of all of our tenants, including the ones who have the most complex needs.”

Elsewhere in her speech, Ms Mahmood paid tribute to what she called legitimate providers acting in good faith that were “doing the right thing by deeply vulnerable people”.

Nevertheless, she said there were generally too many providers who have seen gaps and are now willing to game the system, adding that these providers are giving the sector a bad name. 

Ms Mahmood added: “The system is a complete money-spinner for cowboy landlords who are lining their pockets with housing benefit payments, while providing little to no support at all.

“The system too often fails everyone.”