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Non-compliant exempt accommodation provider self-referred after resident murder
A non-compliant housing association which announced it would be closing in the summer, self-referred itself to the Regulator of Social Housing (RSH) after the murder of one of its tenants, Inside Housing can reveal.
Vicky McDermott, chief executive of Prospect, told Inside Housing that it referred itself to the RSH’s consumer panel after the murder, which took place last year.
Speaking following the closure announcement last month, Ms McDermott said that while there was nothing that could be done to prevent the murder, it was found that there was a governance issue, particularly regarding reporting processes, with a delay in the managing agent reporting the incident to Prospect.
“While there wasn’t a case from a consumer perspective, what the incident did tell us was that from a governance perspective we weren’t quite in the right place,” she said.
The handling of the murder was one of two serious safeguarding incidents, which contributed to Prospect receiving a G4 governance rating, the lowest an association can receive, last October.
The other incident regarded a number of discrepancies in health and safety certification in some of the properties it managed through managing agents.
Ms McDermott said: “There were some key issues around health and safety certification.
“We identified some big gaps in health and safety certification, and the reporting to the board wasn’t fully accurate, so it became really clear we needed to do something about that.”
At the time the regulator said that both incidents identified weaknesses in procedures and controls of the landlord over services provided by third-party managing agents. It also found that contractual arrangements with third parties had fettered Prospect’s ability to undertake appropriate consultation with tenants. Failure to understand assets, contractual arrangements and the needs of tenants in their homes were also identified as issues.
Prospect Housing is an exempt accommodation provider, a subset of supported housing that is funded directly by the Department for Work and Pensions. It manages nearly 2,000 homes.
Exempt accommodation is often used as a means of housing those with very few other housing options, such as prison leavers, rough sleepers, refugees and migrants, and those experiencing substance abuse issues.
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.
Because such landlords provide loosely defined care and support services, their tenants can be exempt from housing benefit caps and associations can charge much higher rents than normal landlords. Prospect received nearly £16m in housing benefit in 2019.
Ms McDermott revealed that when she came in as chief executive last March, as part of an overhaul of the management team, it was identified that there was an issue with housing benefit being paid to the association incorrectly.
This included some housing benefit continuing to be paid even after somebody had left, while some claiming housing benefit for couples when only one person lived in the property.
After a review of these properties, which included door-knocking on all of its properties, the association identified nearly £1m in overpaid housing benefit.
Ms McDermott said the association had been able to recover a lot of that money but had some still outstanding.
Reflecting on the decision to close down Prospect, Ms McDermott said that it looked at 10 different options, including some early discussion with other housing associations about potential mergers. However, these did not progress any further because of the perceived riskiness of the exempt model.
As an exempt accommodation provider, it owns very little stock directly and most of its stock is leased and managed through managing agents.
The association currently employs around 40 staff members and it was looking at TUPE-ing 12 of those to managing agents that worked for them. In other scenarios, they would be supporting other staff members into new jobs.
In terms of the thousands of tenants currently living in Prospect Housing properties, Ms McDermott said that the association was sending out packs and carrying out doorstep checks to understand needs and particular vulnerabilities and provide support in securing future accommodation. She did admit that in some cases, the managing agents would likely transfer to another registered provider operating in the exempt accommodation space.
Ms McDermott said that she didn’t want all managing agents to be “demonised” or “painted as terrible”, and said Prospect had many excellent managing agents that provide a phenomenal service. Nevertheless, she said that there was an underlying issue of standards not being regularly and consistently enforced across the sector, and this would continue to be the case without systemic change.
A spokesperson for the RSH said: “During our engagement with Prospect we identified a range of issues which resulted in us downgrading them further in October 2020.
“Prospect’s decision to cease short-term leasing operations and de-register with us is a matter for its board. We will continue to work with Prospect, its board, local authorities in the West Midlands and other stakeholders as Prospect seeks to ensure a smooth transition as part of a solvent wind-down of its operations."
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