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The Exempt Accommodation Project

It simply wrong and discriminatory that tenants’ entitlements to Enhanced Housing Benefit, which is a personal benefit, are dependent on the legal identity of their landlord.

Background

We have recently been contacted by a number of non-registered supported housing providers (i.e supported housing providers that are not registered providers/housing associations) who tell us that their local authorities require them to become registered providers of social housing in order to be able to be included on the local framework agreements and in order to qualify for Enhanced Housing Benefit.

We are also aware, as per my recent blog post, that some local authorities are restricting Enhanced Housing Benefit payments to non-registered providers to levels well below those paid to registered providers. This is because local authorities can only fully reclaim from the DWP the Enhanced Housing Benefit they pay to registered providers.

Add to that the fact that private-sector providers have never been entitled to Enhanced Housing Benefit and what we have is a three-tier system in which:

  • Tenants of registered provider supported housing can receive full Enhanced Housing Benefit entitlements
  • Tenants of nonregistered supported housing providers receive partial Enhanced Housing Benefit entitlements
  • Tenants of private sector supported housing providers receive no Enhanced Housing Benefit at all

It simply wrong and discriminatory that tenants’ entitlements to Enhanced Housing Benefit, which is a personal benefit, are dependent on the legal identity of their landlord.

The Exempt Accommodation Project

The Exempt Accommodation Project is a way of helping local authorities to properly fund supported housing via Intensive Housing Management/Enhanced Housing Benefit without losing subsidy and without requiring non-registered providers to register as registered providers (housing associations).

The Exempt Accommodation Project is, of necessity, a means of tinkering with the existing system, which is based on the exempt accommodation rules. However, the UK government, having already said that supported housing will continue to be funded through the welfare system, should make the housing component of Universal Credit unrestricted for supported housing so that the true cost of supported housing can be met through a “Supported Housing Rent“. This should be payable to all supported housing providers, irrespective of their legal identity, provided they generate value[1] however, the wheels of state turn slowly so until that happens, we have the Exempt Accommodation Project.

How does the Exempt Accommodation Project work?

The Exempt Accommodation Project seeks to match nonregistered supported housing providers that own or lease their properties with compatible registered providers in a more equitable way than traditional registered provider/managing agency agreements. The properties in question are then leased by the supported housing provider to the registered provider on a 5-7 year basis. As a consequence, local authorities can fully reclaim the Enhanced Housing Benefit they pay, because a registered provider is the landlord.

  • The registered provider is paid (via the Enhanced Housing Benefit claim) for what it does, which will vary depending on what, if anything, the supported housing provider needs. This is likely to appeal to smaller, community-based registered providers for whom the additional income could be a game-changer.
  • The supported housing provider is also paid for what it does via the same Enhanced Housing Benefit claim, which will be more secure because the local authority can recover it from the DWP.
  • The regulatory/oversight functions are managed via a bespoke cloud-based supported housing management system (ClouDigs) that is housing benefit eligible, so it costs nothing and generates huge value
  • Maintenance can be subcontracted to a specialist supported housing maintenance provider, or the registered provider can do it, depending on what works best for the supported housing provider.
  • We provide the necessary leases/subleases and management agreements
  • We calculate and negotiate the revised Enhanced Housing Benefit claims.
  • It won’t cost you anything except a small setup fee, which will be a fraction of the financial benefit that will accrue to you, and which is fully recoverable from Enhanced Housing Benefit in any case..

Supported housing providers and registered providers can choose who they work with and what components of the Exempt Accommodation Project structure they need. They may or may not need maintenance services, may or may not need the bespoke supported housing management system (but why not? It’s incredibly good and effectively free of charge).

Supported housing providers and registered providers that want to get involved will need to show that they generate value. They will need to show that they operate through recognised referral pathways as far as the local authorities are concerned. The Exempt Accommodation Project is not an invitation to dubiously motivated opportunists to access Enhanced Housing Benefit. It is an opportunity for genuine supported housing providers and registered providers to operate with the financial and strategic approval of local authorities and to enable those local authorities to fully recover the Enhanced Housing Benefit they pay.

We are setting up a database of providers and registered providers in order to match one with the other. Matching may initially be done on the basis of geography; however, this may be less important than “cultural fit”. For example, some registered providers may prefer to work with non-profit supported housing providers. Others may be comfortable with private sector supported housing providers. Irrespective of legal identity supported housing providers must generate value, as must the registered providers.

It’s then up to the supported housing provider and registered provider to agree who does what and how the revenue is split. This is a discussion we can facilitate if that’s helpful. The split of roles can vary. Many supported housing providers that own or lease their property will want the registered provider to have a “light touch/arms-length” role. Others will want a greater level of registered provider involvement and the revenue would be split accordingly.


[1] Value Generation has 3 components: outcomes for people; cost benefit to the public purse & wider social and community benefit

Exempt Accommodation Project Flowchart

We have a management agreement template that can be adjusted to reflect the parties’ respective roles and the split of revenue.

We have lease and sublease models that can be used to enable the registered provider to take a 5–7-year leasehold interest in the supported housing providers’ properties with mutual break clauses.

We have a bespoke cloud-based supported housing management system (developed by a supported housing provider) that enables the registered provider to fulfil its regulatory oversight responsibilities and enables the supported housing provider to manage its housing and support roles. This costs just a few pence per week per occupied bed space and is Housing Benefit eligible.

ClouDigs Supported Housing Management System

We have links to specialist supported housing maintenance provider so maintenance can be organised and paid for by the supported housing provider on a “true costs” basis. Alternatively, the supported housing provider can use the registered provider’s maintenance service if it has one or organise its own maintenance.

Management agreement relationships where the registered provider owns the property can be quite unequal. The Exempt Accommodation Project is intended for supported housing providers that own or lease their own property to work with registered providers on a more equal basis.

The Exempt Accommodation Project can also be a way of putting together registered providers and supported housing providers who want to discuss wider strategic partnerships and/or mergers. We have had contact from a registered provider in the north-east seeking this, and a supported housing provider in the West Midlands with the same idea.

As well as facilitating the entire structure of the of these arrangements (introductions, agreements, supported housing management system, maintenance options) we also revise the Enhanced Housing Benefit claims to take account of the (small) costs involved.

This idea generates huge value for local authorities, registered providers, supported housing providers and for residents of supported housing.

Getting Involved

Please get in touch if:

  • You’re a supported housing provider that needs secure Enhanced Housing Benefit revenue and eligibility to be included on local authority framework agreements, or you’ve been told to register as a registered provider
  • A registered provider that needs additional income or is interested in partnerships or mergers with supported housing providers
  • A local authority that’s looking to manage the local supported housing market in such a way as to generate value without loss of Housing Benefit subsidy

We already have a growing list of supported housing providers and registered providers on the Exempt Accommodation Project database. Please become part of this.

Michael Patterson

June 2021

2 replies on “The Exempt Accommodation Project”

I am puzzled at the restriction of this offer to “supported housing” providers, because in terms of local authority procurement, there should be no such thing to be tendered for, because the actual service is the non residential home care, not care together with accommodation. To my mind any owner of a house could lease it to a housing association and solve the housing with care supply problem overnight. The only reason a local authority has a supported housing provider framework is to control the market, surely, to ensure that providers of care have an identifiable set of partners to cosy up to, for payment of voids and HB deficit guarantees in return for control over nominations to tenancies, of people they have secured a CARE contract for. Why can’t your solution just be extended to landlords of ordinary accommodation, since that is what supported housing IS, in relation to the properties – properties in which adaptations can be done under DFGs. Sorry to be dense if that is what the problem is – I could really do with understanding this from your perspective – but I am also the owner of one such house with 3 bedrooms and a sleepover room, hence the question. I am not a dubiously motivated opportunist. I want to let to people who need accommodation so that they can all get care under the Care Act and I do not mind being paid through housing benefit and do not care to make what you would call a profit out of that. I simply want a market rent. I do not want to put the whole set-up in jeopardy with a dubious side agreement with a care provider that CQC should be worried about, if the law about what makes for a care home were ever to be applied (de facto integration of care and accommodation elements). The references in this offer, to the need to be a ‘genuine’ supported housing provider, and to generating ‘value’ and using established referral pathways seem to add up to going along with the local authority interest in restricting the opportunities for accessing the housing in the first place, if I may say so – when something much more radical is in fact required?

As far as I am concerned “supported housing” is somewhere that someone with an additional need lives. The legal identity of the landlord, if there is one, shouldn’t matter. But there is a problem with this view, which I’ll return to.
I agree that it shouldn’t be the case that local authorities put supported housing providers, by my definition that would include you and your 3 bed house, through a tendering process but they’re effectively told to by UK government guidance in the form of the National Statement of Expectations for Supported Housing. The latter is a response by the UK government to the perceived need to “control costs” on the HB side (with which I disagree) combined with the fact that there is widespread abuse of the enhanced HB system by dodgy people out to make a fast buck, and that does need to be dealt with (see Thea Raisbeck’s “Exempt from Responsibility?” report and my various published pieces on this problem). That’s the problem I refer to in my 1st paragraph, and it’s a BIG problem.
It’s definitely about LAs controlling the market, but not just in relation to people they have a care contract for. Most supported housing these days is funded solely through enhanced HB and doesn’t come under the purview of the CQC (and neither should it).
Generating value has a very specific meaning. Value Generation, which I invented, has 3 components: outcomes for people (measured qualitatively); cost benefit (measured quantitatively) and wider social benefit (measured both qualitatively and quantitatively). Local authorities are, in the main, motivated by cost control, which is far too crude a measure to apply to supported housing commissioning. By “commissioning” I mean both capital C commissioning where LAs actually fund supported housing, other than just through enhanced HB, and also small c commissioning where the only funding they provide is enhanced HB (and with caveats around full subsidy recovery these days as well).
I do think that supported housing providers (again, using my wide definition of supported housing) should be accredited by local authorities much as they were under Supporting People but with a simplified accreditation process. I think that the oversight of supported housing should be conducted according to Value Generation principles and that the oversight system should be developed by an independent agency (a university, for example) and independently implemented by that agency with the outcomes being reported back to the LA and the supported housing provider so we can break the link between funding and oversight and leave less room for vested interest.
I agree something much more radical IS required and the Exempt Accommodation Project is, in my own words, “tinkering with the existing system” whilst we wait for central government to do the right thing. The UK government said in 2018 that funding for supported housing should remain within the welfare system, so why not make the housing component of Universal Credit uncapped for supported housing so that the costs currently met by enhanced HB are met by Universal Credit, irrespective of the legal identity of someone’s landlord or their ownership of their property?

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