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Two exempt accommodation landlords declared non-compliant and supported housing provider placed under investigation

Two exempt accommodation providers have been declared non-compliant by the Regulator of Social Housing (RSH), while another housing association has been placed on the regulator’s ‘gradings under review’ list.

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Two exempt accommodation providers have been declared non-compliant by the Regulator of Social Housing, while another housing association has been placed on the regulator’s ‘gradings under review’ list #UKhousing

In judgements published today, Ash-Shahada Housing Association (ASHA) and Concept Housing Association were found to be non-compliant with the regulator’s governance and financial viability standards.

It comes five months after both providers were placed on the RSH’s grading under review list, meaning they were being investigated for matters that could affect their compliance with regulatory standards.

In today’s judgement, the regulator said that Ash-Shahada has “experienced rapid growth since 2018 following its diversification and expansion into the provision of supported housing in Birmingham resulting in it providing more than 3,000 units of this type in properties of varying size”.

In its most recent data return to the regulator, Ash-Shahada said these units are not social housing, meaning it owns roughly 200 units of general needs social housing units and 3,143 units of non-social housing.

Inside Housing understands that Ash-Shahada forms part of the “exempt accommodation” sub-sector of supported housing providers.

This refers to landlords that are required to provide loosely defined “care, support or supervision” to residents but can still charge significantly higher rents than for mainstream social housing, paid by housing benefit.

The regulator said that Ash-Shahada “enters into short-term leasing arrangements for properties with a number of third parties”, including both private landlords and managing agents, which “also deliver the landlord and management services on ASHA’s behalf under an agreement”.

The vast majority of these third-party organisations are “profit-making” and some have also leased the properties in turn from “a range of head landlords”, the judgement said.

“We lack assurance that there is an effective system in place to ensure that ASHA has sufficient assurance on the adequacy of information provided by third parties, and therefore that the risks of this operational model are being adequately managed,” it added.

The RSH said it has evidence that Ash-Shahada’s payments to third parties “are higher than the figures contained in the contractual agreements”.


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It said the evidence it has been provided suggests that tenants receive 1.5 hours of support per week and that it is “the regulator’s judgement that ASHA does not adequately reconcile the payments made to third parties with evidence that the services are being provided to its tenants”.

“The evidence we have received from ASHA demonstrates a weak contracting environment and inadequate monitoring and oversight of very significant sums of money which are transferred to third parties on an ongoing basis.

“This risks financial abuse with third-party managing agents not providing services being claimed or inappropriate services and housing management practices,” the judgement said.

The regulator said Ash-Shahada has committed to working with it to address the issues outlined and to return to compliance.

Ash-Shahada has been approached for comment.

In a separate judgement on Concept Housing Association, the regulator noted that it has also “grown rapidly following its diversification and expansion into the provision of supported housing in Birmingham, Bradford and other areas”.

Concept has gone from owning five general needs properties in March 2019 to providing more than 5,000 units of accommodation, the majority of which it classifies as non-social housing.

Inside Housing reported earlier this month that Concept saw its surplus rise by 3,000% in a single year.

The RSH describes a similar model as that described in the judgement for Ash-Shahada, in which Concept enters into short-term leasing arrangements with a significant number of third parties, which also deliver management and support services on behalf of Concept.

The regulator said that Concept has started to develop new governance arrangements over the past year but that these are currently “inadequate for an organisation of its current size”.

To date it has made six appointments to its board, however four members have subsequently resigned, leaving “gaps in the skills and experience of the board”.

Over the past year Concept has also “developed systems to carry out quarterly property inspections”, however a high number of homes “have failed property inspections and issues have been identified with support provision with more than half of the third parties providing support”, the regulator said.

“While some information has been reported to the board, the information is limited and has lacked detail about the action taken to improve,” it added.

Concept was also unable to provide the regulator with a business plan and the board has now commissioned a review of its underlying key assumptions.

Similarly to Ash-Shahada, the regulator said that Concept has also “not provided evidence of how it monitors… the very significant sums of money which are transferred to third parties” and that “this risks financial abuse with third-party managing agents not providing services being claimed”.

David Fensome, chief executive of Concept, said: “We are really disappointed to receive today’s notice of non-compliance with elements of the governance and financial viability standard, but very much welcome the opportunity to continue to work with the Regulator of Social Housing to achieve compliance over the coming months.”

He added: “Concept exists to support the housing and support needs of some very vulnerable people. Private landlords frequently turn such vulnerable people away and, without us, often there is no other choice but to sleep on the street.

“We don’t think this is an acceptable situation in the modern world and so are doing all we can to provide a better option.”

The exempt accommodation sector has grown rapidly in Birmingham over the past few years.

Last month, Inside Housing reported that the number of exempt accommodation claimants has now surpassed 22,000, more than double the 11,000 recorded in early 2018.

Also today, the regulator has announced that it has placed Empower Housing Association on its gradings under review list.

This means it is currently being investigated for a matter that could lead to it being rated non-compliant.

According to its website, Empower specialises in providing housing for adults with disabilities in a geographical area ranging from Scotland to Devon. The regulator said that Empower manages fewer than 1,000 homes.

Les Paul, chair of Empower said, “Whilst the regulatory position of Empower is disappointing, the board has responded positively and acknowledges the regulator’s concerns. We are working to ensure that we have the capacity and capability to support the changes required to address these issues."

He said Empower has commenced a process to improve its assurance and processes in relation to regulatory and statutory compliance, including the commissioning of external specialist support to provide guidance and to work with Empower to review and embed a range of activity across the organisation. Michelle Lee has been appointed as Empower’s interim managing director, following the retirement of Steve Knott.

He added: “We have agreed an initial plan for the delivery of this work with the Regulator of Social Housing and will continue to work collaboratively and closely with the regulator with the aim of achieving full compliance with the regulatory standards.”

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