Alongside legitimate private landlords there have always been those who preyed on vulnerable tenants- those who were unable to defend themselves or those who were unable, because of discrimination, to find housing elsewhere.
Names like Rachmann are still well known today and remind us of how bad things were.

The growth of the voluntary sector housing movement, was designed to drive those bad landlords out of business by providing good quality housing as an alternative. The growth of supported housing since 1980 has particularly focussed on housing those who are not able to live independently. Supported housing is now highly regulated in an attempt to ensure that standards are kept up and value for money is obtained.

But a new phenomenon has emerged. It works like this: An individual landlord or private company owning property sets up a voluntary organisation. The voluntary organisation is not allowed to make a profit.
But it is closely controlled by the private landlord or company. The voluntary organisation pays a very high rent to the owner who makes a good profit. In order to ensure that housing benefit is forced to pay out on a high rent people who need support are housed and provided with support by the voluntary organisation. Often there is no apparent source of funding for this support and sometimes it is actually funded by "donations" from the
landlord- possibly funded out of the rent. There is usually no effective outside control over the standard of accommodation or the support provided.
Sometimes there is paper security of tenure, making it harder to restrict benefit, but no actual security because the voluntary organisation granting the tenancy has no security itself.

How common is this phenomenon?

No central records appear to be being kept. But at a recent tribunal I attended on behalf of an established charity housing single homeless people, in a major city, about half the comparable accommodation cited by the council was of this type.

The head of housing benefit in York told me that it felt like every week he was faced with claims from a new voluntary supported housing organisation.

At this rate private/voluntary supported housing provision will soon outstrip the traditional voluntary sector.

Is it a good or bad thing?

Some private landlords work very hard at providing good quality support.
Those running adult fostering schemes for example, have been unlikely to get into the field to make a mint. It would be hard to say that these landlords should not arrange things to make at least as much money as a voluntary sector project doing the same job. And few would say that avoiding the complexities and paperwork of the supporting people regime was a crime.

But the lack of regulation means that those bad landlords who are unable, because of their poor standards, to attract more powerful customers, can have a field day. One expert in the field, commenting on the standard of private/voluntary housing he was familiar with said "I wouldn't send my dog to live in those places."

A number of these arrangements have been scrutinised very carefully by the upper tribunal, formerly the social security commissioners. One particular judge, Judge Turnbull has made a speciality of examining these cases. Have a look at decision CH 136 2007 involving Rivendell Lake Housing. Is this the sort of arrangement we want to defend?
Another example of this type of arrangement can be found in CH 577 2009 where the claimants appeared to being forced to accept "support" whether they wanted or needed it or not and the supporting people team had pulled funding out because they thought support was not needed. In my experience these two cases are not untypical.

What response should those interested in good practice make?

In late October 2009 "Inside Housing" magazine ran a lead article highlighting an earlier decision limiting the housing benefit paid to tenants of Rivendell Housing. The thrust of the article, which was supported by a number of reputable organisations, was that it was wrong for the rent to be limited and that something ought to be done about it.


I think organisations and professional bodies are looking no further than how they can protect their own projects. Plainly we need to think very carefully about what we do and do not want to see happening and how projects, in any sector, that promote decent housing for vulnerable people can be encouraged. We need to think about how slum landlords can be driven out.

I have yet to see a proposed definition which would do the job of justifying why certain types of housing should be eligible for higher housing benefit which is likely to be workable and acceptable to government and I can't think of one myself. I think supported housing is in deep trouble here and we need to do some very serious thinking.

summaries of and links to the full text of the two cases that chris references are available in rightsnet briefcase ....

• CH/136/2007 - Whether history of housing project relevant in considering whether claimants tenancy is contrived; and
  
  
• CH/577/2009 - Circumstances in which lettings to tenants to whom support is provided may be contrived tenancies

Chris, I hope this is taken in the right spirit. Prior to seeing the above, I had wondered where you stood in relation to what *I* might have referred to as the "rip-off" merchants.

Assuming I am interpreting your observations correctly, it seems you have as little regard for the likes of the arrangements apparently present in CH/136/2007 & CH/577/2009 as I do. If I'm wrong in my perception, I will be happy for Rightsnet to remove my individual post.

My view tends to be somewhat HB centred, but the vast majority of observations and comments made by me are aimed fairly and squarely at the rip-off brigade. And, I agree, those with genuine motives and intentions are now very much caught in the cross-fire.

Of interest, Rivendell Lake has now been on the receiving end of at least the 3 publicly available decisions / judgements. In CH/136/2007, the arrangements were palpably designed to, literally, take advantage of the HB scheme (you may be aware I had first hand involvement with those cases on behalf of the LA, so had first hand sight of the so-called "evidence" and related arguments). In R(H) 2/07, one of the terms at issue was referred to by the then Cmmr as being "...wholly at variance with the reality of the situation...". And, in the recent Walsall case, the same LL didn't fare much better (at least based on my reading of the judgement).

Unfortunately, as you indicate, there now seem to be many individuals and organisations whose primary goal is to get as much money as possible through the HB system with any purported care, support etc being nothing more than a vehicle of convenience to achieve that goal. Indeed, anecdotally, I am aware of one LL who has openly boasted of his/her intention to get 200 tenants such that they all fall within the exempt accommodation exception. No other tenants will be considered.

I stress I have no issue, personally or professionally, with those in need being properly and appropriately funded. But, both personally and professionally, I have a real problem with what is currently happening and that is why I continue to happily assist LA benefit sections on the issue of "exempt accommodation". But, it shouldn't be like this.

As for the DWP? All talk, no action. The evidence? As far back as August 05 (HB Direct 44), LAs were invited to provide feedback. Er, just this year, HB Directs 91 & 92 (give or take "1" either way), more requests for feedback. Circular A22? Apart from the errors, it was ok. And following R(H) 2/07, there was the briefest mention in Parliament.

Will my post upset one or two other contributors to Rightsnet? I hope so.

Its a very ineresting subject and housing (as opposed to HB) is one of my passions. In the past I have been homeless myself and been the victim of a ruthless landlord. I have also worked with homeless teenagers.

I share Kevin's general views concerning the ruthless sort of landlord who cares nothing about his tenants or who tries to screw as much money out of HB just to line his pocket and fund his lavish lifestyle. And don't get me started on the assured shorthold tenancy (the jewel in the crown of the 1988 Housing Act).

On the security of tenure issue, there is some protection. In Bruton v Quadrant Park Housing the HL decided that Mr Bruton did have a tenancy (because of the facts of that case, exclusive possession and payment of rent for a term certain – although a law lord in another case questioned whether even the payment of rent was a factor in founding a tenancy) even though Quadrant Park (the inferior landlord) had no legal right to grant him one, as they were prevented from so doing by the terms of the lease they had with the LA (the superior landlord).

This results in two things. First the tenant (as in Bruton) could enforce the landlord’s repairing obligations under section 11 of The Landlord and Tenant Act 1985. Second, it affords the tenant some security of tenure in that the inferior landlord would have to go to court to evict.

This not, as will be obvious, my area but would it be better if the charges and benefits payments were separated into accommodation, hotel services and support? That might be a way of trying to stop the cross-subsidy which is presumably the problem especially if there was a way of allowing separate provision.

And I can only forsee the problems with bad landlords continuing if not getting worse. My partner is a landlord and we are involved with quite a few landlord forums and associations.
With the advent of LHA many many landlords are now refusing those on benefits, far more than before. This leaves people looking for a new home with little option than to go to these places that cockroaches would refuse to live in.

Unless Landlords can see LHA as a positive thing and it can be tweaked further, and Landlord licensing actually has some teeth bad landlords are here to stay!

Fri 30-Oct-09 09:43 AM by Kevin D

I think Chris is expressing somewhat deeper and more fundamental concerns than mere cross-subsidising. He is (at least by my reading) expressing grave concern of an increasing number of landlords whose primary goal is the money, with any provision of "care" being distinctly secondary and ONLY being provided to the extent (and purpose) of enabling benefit provisions to be met in order for that money to be paid.

Of course, that assumes the purported "care" / "support" etc is actually being provided at all and is not merely a paper exercise.

What is even worse (in my view) is that some RSLs are now muddying the water. I am aware of several cases where rent charges have been massively increased (more than doubled in some cases) with it being argued the "exempt accommodation" exception is satisfied; this putting LA Benefits Sections in an invidious moral position.

I do think change is in the air. The DWP may be slow, but there is a fundemental review of HB due and a new government in the offing determined to slash public spending. The head of steam building up over this issue on both sides with the flurry of upper tribunal decisions can hardly be avoided.

The traditional voluntary sector, having been unable to come to terms with the necessity to link support to the landlord seems unable to look beyond the short term interests of individual projects. It would be surprising if HB offices were not doing a huge amount of lobbying, given their subsidy losses.

My concern is that the simplest solution would be to abolish the exempt accommodation rule, which would mean huge number of genuine projects going to the wall. No one thinking seriously would expect emergency accommodation for homeless people with chaotic lifestyles, for example to cost the same to manage as ordinary housing, but I have a nasty feeling that we will end up with the same rent limits for both.

Despite a recent history of apparently being on the opposite side of this particular fence to Kevin in these forums, I don't mind publicly agreeing about 'rip-off' merchants. People who flout the law or bend it to their advantage in any walk of life try my patience, and money is so often the reason for such infractions.

If there is any difference between us then it is that I work in a different sphere and passionately believe in supported housing as a social care model. I've been involved in the planning and establishment of dozens of supported housing services now, and I understand why rents in the sector can be high (even without the slightest hint of foul play).

I work in a Local Authority commissioning team, and our duty of care to the people we arrange support for, coupled with the need to buy into robust services which offer value for money, wouldn't allow me to do anything other than steer clear of rip-off merchants. Yet we still end up, in many cases, with rents that are higher than those in mainstream tenancies.

There are many reasons why this can occur, and as Chris points out in his last paragraph, most reasonable people with a certain level of experience shouldn't really be surprised by the costs. It is for HB officials to accept or reject each claim on its merits, and as taxpayers paying their wages we should expect no less than this. There's certainly no lack of recent case law to help them out, and even the largely out of date circular A22/2008 has a lot of clear guidance to explain the salient considerations.

I'm happy to condemn inflated claims which discredit the entire sector, and I resent the damage they do to genuine services. At the same time however, I'm not happy to see jaded HB officials automatically assuming that there is something fishy every time they get a claim falling to be treated under these provisions. The sad reality seems to be that we've now reached a point where something has to give, and normal rules of sound adjudication and fairness can no longer operate in such a climate.

I hope that the easy way out (the abolition of exemption, which Chris notes above) isn't taken, however tempting it may be. This would be a short sighted, knee-jerk response which would reverse the good work done for so many individuals who have no control over how much their accommodation costs to provide. It would increase the likelihood of a greater reliance on 'institutional' forms of care, and be totally at odds with every significant social care policy driver. And that's before you start to consider the cost implications to budgets beyond the narrow world of the HB subsidy pot.

Better policing of what we've already got seems to be the answer, but with ever increasing complexities involving expertise in a growing number of areas to make the proper distinctions, I appreciate that that is easier said than done.