Shabana Mahmood, Labour MP for Birmingham Ladywood, responded today (Friday 23rd July) to two reports by the Regulator of Social Housing into Exempt Accommodation, calling their findings “shocking, appalling and deeply worrying”.
The damning reports lay bare a litany of failures and abuses, and find two providers of Exempt Accommodation in Birmingham as having “inadequate risk management processes and internal controls”.
Asha-Shahada Housing Association Limited and Concept Housing Association were found to have failed their tenants across a plethora of issues. These include:
- Significant weaknesses in business planning framework:
- Inadequate risk management processes and internal controls;
- That the board has failed to manage its affairs with an appropriate degree of skill, independence, diligence, effectiveness, prudence and foresight; and
- That has failed to demonstrate that the arrangements it has entered into do not inappropriately advance the interests of third parties.
Most worryingly, both providers were found to transfer “…a very significant amount of rent and service charge income [they] receive to third parties on an ongoing basis.” The report went on to note that “in addition to payments made by [both providers] to third parties, tenants are required to pay service charges ineligible for Housing Benefit direct to their respective third party managing agent.”
Exempt Accommodation is designed to provide housing to some of the most vulnerable people in Birmingham, and across the UK. For businesses to found to squeeze huge payments payments while failing tenants on every level underscores the need for urgent reform.
Shabana Mahmood, MP for Birmingham Ladywood, said:
“The Regulator’s report into two providers of Exempt Accommodation in Ladywood makes for harrowing reading – it is shocking, appalling and deeply worrying. The people using Exempt Accommodation are some of the most vulnerable in our communities, and in desperate need of additional support in the housing they are provided. This report shows how appallingly they have been let down.
Amongst the litany of failures identified in the report lurks an open secret – that this type of behaviour from providers is endemic, and that this report id barely the tip of the iceberg .
“I have been campaigning on this issue for a considerable time, and have found Government indifference to the issues alarming. I have written to the Minister again today, demanding urgent action is taken to fix the failings here in Birmingham, and finally get a grip on the rotten practices at the heart of the Exempt Accommodation racket. What should be a lifeline for those in need is all too often a get rich quick scheme for the callous and the unscrupulous.
“Both Ash Shahada and Concept Housing Association were found to have “inadequate risk management processes”, with Concept was also found to be transferring a large amount of rental income to third parties on a regular basis. Operating in this way raises serious question over the regulations in place for those who are deemed to be small providers of Exempt Accommodation. I have long warned of the structural flaws in the system and these two reports just show how utterly inadequate it is.
“The Housing Secretary needs to get a grip of the situation. For too long the Government has shrugged off calls for reform – from me and others – insisting there is nothing fundamentally wrong with Exempt Accommodation sector. This report gives us a glimpse of the truth. Government must act – and act now.”