London Councils welcomes the Supported Housing (Regulatory Oversight) Bill which would make provision about the regulation of supported exempt accommodation, as well as local authority oversight of, and enforcement powers related to exempt accommodation.
London Councils shares the ambition to raise standards in the exempt accommodation sector, however, we are concerned that the Bill will introduce significant new duties for local authorities, which will need to be funded and resourced. It will also be important that standards are raised in a way which does not lead to large numbers of providers suddenly exiting the already over-stretched supported housing sector, and that the impact of new legislation on good providers is minimised. Finally, London Councils believes a wider group of stakeholders than those currently listed in the Bill should be consulted on the legislation before it is passed.
Exempt supported accommodation is exempt from certain benefit provisions. This means higher payments can be made to providers for this type of accommodation than is ordinarily the case, based on the additional provision of care or supervision to residents by the landlord. This type of accommodation originally emerged as policy makers understood the importance of maintaining supported housing supply which would have otherwise become unviable due to Local Housing Allowance (LHA) limits. When ring-fenced Supporting People funding was removed in the late 2000s, exempt accommodation grew in scale.
There is a national shortage of supported housing and social housing more generally. Exempt accommodation includes hostels, refuges, group homes, supported living schemes and sheltered housing. It is intended for people with support needs such as homeless people, people with mental health needs, people with drug misuse issues, prison leavers, care leavers and those who have experienced domestic abuse. These groups tend to have more difficulty in being housed, a trend that is exacerbated by constrained housing supply.
Exempt accommodation may, or may not, be commissioned by local authorities and can be run by a variety of landlords and organisations. It is not subject to a single regulator or set of national regulations. In cases where housing associations are the provider, they are registered with the Regulator for Social Housing and regulated by its framework. Where the provider is not a registered social landlord and a local authority does not commission them to provide exempt accommodation, neither the Regulator for Social Housing nor local authorities can prevent the establishment of new schemes, regulate standards or take action against low quality housing and services.
The current evidence base around the scale of the issue is incomplete and difficult to quantify. The lack of consistent, detailed records of providers and their schemes, or data on the number of homes judged to be poor quality, is one driver for greater regulation. The number of people in the UK housed in exempt accommodation was estimated using Freedom of Information requests by Crisis to be around 150,000 households, an increase of around 60% from 2016.
There are concerns that some providers are abusing the system by buying or leasing large houses to sub-convert into units of accommodation, to make greater profits at the expense of the public purse, while providing housing and support services to residents that could be deemed unacceptable.
Exempt accommodation can also have a considerable impact on local authority budgets. Local authorities, through their benefits departments, must pay 40% of costs where providers are not Registered Providers. Research by Inside Housing has shown that Lambeth paid £26 million in such costs in 2021-22, Kensington and Chelsea £15 million, Enfield £14 million and Hammersmith and Fulham £12 million.
Proposed changes in the Bill
The Supported Housing (Regulatory Oversight) Bill makes provision for:
- The establishment of nationally set minimum standards of supported housing and support, care and supervision for the sector.
- Local authorities to take on a new licensing role and enforcement powers of those standards and licence conditions in their area.
- Local authorities to publish a Supported Housing Strategy, including the availability of exempt accommodation and an assessment of likely need for this accommodation in their area over the next five years, repeated on a five-yearly basis.
- People leaving exempt accommodation that does not meet the national standards will not be classed as intentionally homeless.
- The establishment of a national oversight committee with expertise intended to develop proposals for reform and inform policy development.
- The Secretary of State would have an option to introduce a new planning use class for exempt accommodation.
- The Bill also indicates that a statutory consultation of the Local Government Association, National Housing Federation and the Regulator for Social Housing will be undertaken.
London Councils’ views on the Bill
Raising standards, provisions for new licensing and enforcement powers
London Councils welcomes the Bill’s intention to raise standards in the exempt accommodation sector, as well as provisions for new licensing and enforcement powers for local authorities.
London boroughs have few effective powers to ensure existing exempt accommodation provides good housing and support services to residents. Local authorities are also unable to prevent new schemes being established, funded by Department for Work and Pensions’ benefit payments at higher rates. London Councils is particularly concerned about the conversion of houses into multiple-occupancy schemes where support, care and supervision can be minimal and very high rents charged.
The proposals for local authorities to grant licences with conditions, check standards and licence conditions and take enforcement action are sensible. Local authorities already act as licensors in their districts in other, similar contexts, for example, Houses of Multiple Occupancy. To make this as workable as possible, we suggest the following steps:
- Provision of funding for this increased activity to ensure local authorities can recruit the necessary staff and carry out their responsibilities.
- Support and guidance for local authorities on how to assess the ‘fit and proper test’ of persons for licences and the extent to which they will have to assess support, care and supervision provided by landlords and organisations.
- Clarification of the mechanism for providers and authorities where providers challenge decisions to refuse or revoke licences and what the ‘backstop’ to this scenario would be where internal local authority processes are exhausted.
- Consideration of scenarios where one local authority grants licences to a provider but another local authority does not. This could result in a provider exiting the market in both areas.
- Clarification of whether all individual local authority licensing schemes would require sign-off by the Secretary of State.
- Sufficient time to prepare for the new licensing regime.
Consideration should also be given to requiring all providers to become Registered Providers, subject to regulation by the Regulator of Social Housing (with this being reasonably accessible to smaller providers) and/or the Care Quality Commission. This could support local authorities in their licensing and enforcement functions.
Impact on supply of supported housing
London Councils is concerned about any impact that the legislation may have on reducing the supply of supported housing. There is a dire need to bring forward more highquality supported accommodation with housing, care and support. The rise of exempt accommodation which is not commissioned is undoubtedly linked to the inability of local authorities to bring forward sufficient supported housing to meet demand. Hostels and refuges play a particularly vital role in addressing homelessness and supporting people who have experienced domestic abuse. While standards undoubtedly need to be raised, it must be done in a way which doesn’t lead to a considerable number of providers, such as smaller charities and faith-based organisations, suddenly withdrawing from the market and leaving a gap which local authorities are unable to fill. There are also many good providers, and consideration needs to be given to minimising the impact of new legislation on those providers.
Resourcing local authorities
London Councils is concerned that the Bill will introduce significant new duties on local authorities – including in relation to regulatory oversight, strategy development and homelessness duties – with no detail on how they will be resourced to deliver on these duties. If the objective of raising standards in exempt accommodation is to be met, local authorities will need to be sufficiently resourced to do so. Consideration should also be given to the financial and resource implications for local authorities taking on additional responsibilities, such as collecting new data and publishing five-yearly supported housing strategies.
The government should also build on the Single Homelessness Accommodation Programme capital programme for developing supported housing, by significantly increasing the size and duration of both revenue and capital funding for higher quality supported housing. This would enable local authorities to sustainably develop and commission the services they know are needed in their area.
London Councils would also like to see wider consultation on the legislation before it is passed. The consultation mentioned in the Bill should be widened to ensure broader feedback from the sector, including smaller providers, charities and faith-based organisations, the domestic abuse sector, the homelessness sector, care leavers and other stakeholders likely to be impacted by the legislation.