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Council accuses association linked to investment funds of not providing support services
A local authority has accused a supported housing association linked to several new investment funds of not providing support services to vulnerable tenants, despite billing for them in housing benefit.
Gloucester City Council said an investigation by its housing benefit team into Westmoreland Supported Housing Association “discovered some services were not being provided to tenants”.
It has sent letters to the tenants – seen by Inside Housing – informing them that benefit payments were more than £200 a week too high over a 12-month period.
The letters say the funds “will be recovered by deducting it from the next payment due to your landlord”.
The council said the issue affects “several” properties managed by Westmoreland. In a statement, the landlord said it is “contesting” the claims.
The landlord is one of three organisations with similar structures to be declared non-compliant by the Regulator of Social Housing over the past year. It was criticised by the watchdog for “inherent conflicts of interest”.
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The letters seen by Inside Housing reveal two tenants were being charged a weekly rent of around £300 each to live in Westmoreland’s home – paid for through housing benefit.
But the letters say their benefit entitlement was just £80 per week as they “no longer receive care and support provision”.
The alleged overpayments identified in the letters stretch over a one-year period from September 2017 – totalling more than £20,000 for the pair. It is not known precisely how many tenants are affected.
According to Westmoreland’s website, it provides “housing with support for people with learning disabilities and physical disabilities”.
Westmoreland does not own most of these homes itself, but instead leases them from large investment funds including Henley Healthcare Investments, Civitas and Triple Point.
Under these arrangements, the landlord is obliged to pay inflation-linked lease payments to the funds, which it makes by collecting rent from the tenants.
Rents on many supported housing properties are set far higher than rents on normal social housing units, with the rates supposed to fund the additional services provided to tenants.
Thousands of these homes have been bought up by investment funds in the past three years.
A spokesperson for Gloucester City Council said: “Our housing benefit team made some enquiries into the levels of rent which were being charged by Westmoreland Supported Housing Association. We discovered some services were not being provided to tenants.
“Therefore, some housing benefit claims have been recalculated retrospectively to take into consideration the services that had not been provided.”
They added: "Several properties have been affected.”
A spokesperson for Westmoreland said: “The council is fully aware that we are contesting the issues raised and we have been in regular contact.
“As part of this process, we have provided evidence to the council to support the legitimacy of the housing benefit claims made. We will continue working closely with the council to resolve these matters as soon as possible.”
