In January 2022, Manchester City Council submitted written evidence to the parliamentary inquiry into exempt accommodation. As Appendix 2, it reproduced a post from this blog, the one below, as an example of “the wrong sort of publicity”: consultant “marketing / messaging” selling supported housing as an “attractive / generous revenue stream” to “consultants who use the opaque rules to make a profit and do not provide quality advice”.
The evidence was submitted to Parliament and is on the public record. It deserves a reply on the record. This one is overdue.
What Manchester said it was worried about
Manchester described the problem accurately. Investors and developers were creating small registered providers “as a front” for “a disguised profit income stream / yield through HB via the core rent”. Rents were inflated, standards were poor, and vulnerable people were treated as yield.
That is a real problem, and people should be named for it. I have named it repeatedly, often before Manchester did.
What Manchester chose as its example
Out of every scheme, adviser and investment pitch then circulating, Manchester picked as its illustration of bad practice the one mechanism designed specifically to stop subsidy loss and investor-led exploitation.
The Exempt Accommodation Project:
- works only with council-approved supported housing providers; the post Manchester reproduced says, in its second paragraph, that we “don’t represent supported housing providers that operate without the approval of local authorities”;
- partners only with established, stock-owning registered providers in good regulatory standing, including YMCAs, a specialist domestic abuse provider and a Mind registered provider, not shells set up to front investors;
- exists to let councils recover Housing Benefit subsidy in full, which is the very problem Manchester’s evidence complained about;
- Allows registered providers to charge a modest management fee, from around £20 per tenant per week, for taking on landlord responsibilities: voids, health and safety, property standards and tenant satisfaction. That’s payment for work and accountability, not a yield to investors;
- now involves around 3,000 units, six registered providers and 20 to 25 supported housing providers;
- includes a partnership with Cornwall Council that the Local Government Association later cited as good practice in subsidy management in its SHROA guidance for councils.
Manchester’s evidence called this “the wrong sort of publicity”. The LGA called it good practice.
My last conversation with anyone senior from Manchester was very recent. That conversation suggests not only that they’re unaware of the dynamics of financial abuse in the supported housing ecosystem, but also that they might be making some of the very choices they condemned in 2022.
The bit I’ll “own”
I wrote “generous revenue stream”. It was a clumsy phrase, and I can see how it read to someone already braced for exploitation. The “revenue stream” is a management fee to community registered providers for taking on landlord accountability. For genuinely raising supported housing standards at local level. For funding things like food banks and other community investments that our RP partners make. It is not rent inflation, it is not a yield, and nobody was paid to front for capital. One clumsy phrase doesn’t turn a subsidy-recovery mechanism into the problem it was built to solve. And picking that phrase while passing over the actual exemplars of bad practice isn’t analysis. It’s choosing the easiest target.
The timing
Three months before Manchester’s submission, I spoke at Commonweal Housing’s “Experts on Exempt” series. I said parts of the sector had been captured by “corrupt structures” that let providers “maximise profits at the expense of people with additional needs”. I called for a cap on returns of around 6% on deployed capital, valuations based on market value rather than revenue yield, and a “values-driven approach rather than prioritising a profit-seeking agenda”. I said, “if it’s the money you are after maybe you’re in the wrong market.”
During the very same meeting, I described exempt accommodation profiteering in Birmingham as being akin to a “Wild West” gold rush. That phrase was then recycled all the way up to the House of Commons as a means of arguing for the very legislation, SHROA, which resulted from the 2022 Inquiry. That irony should not be lost on Manchester.
Before that, and ever since, I have argued for Value Generation as the measure of quality in supported housing, for local accreditation and independent oversight, and, in 2025, I coordinated the sector’s co-produced response to the Supported Housing Regulatory Oversight Act consultation.
Why this matters
Supported housing needs councils to tell exploitation apart from good practice. If the evidence put to Parliament can’t make that distinction, the result is blanket suspicion that hits genuine providers, the community registered providers willing to help, and above all the tenants who depend on both. The people who really profit from opaque rules are not hurt by being described in general terms. They are hurt by scrutiny that is specific.
Manchester’s analysis of the problem was largely right. Its choice of example was not.
The original post, as reproduced in Manchester’s Appendix 2, remains below so that readers can judge for themselves.
Michael Patterson
4th October 2026
What’s The Problem?
Charities, voluntary organisations and registered providers (housing associations) that provide supported housing and/or tenancy sustainment services are entitled to Enhanced Housing Benefit to provide Intensive Housing Management. However, all things are not equal and some organisations are, in practice, more entitled than others.
If your organisation has decided to set up supported housing in a local authority area without consulting with the local authority in question, don’t be surprised if you’re refused Enhanced Housing Benefit. We’ve been involved in Enhanced Housing Benefit claims since 2005 and we reinvented the term “Intensive Housing Management”, but we don’t represent supported housing providers that operate without the approval of local authorities.
However, there is no guarantee even if your organisation is entitled to Enhanced Housing Benefit and that you operate with local authority approval that will be successful in claiming it.
I metioned that all things are not equal. A registered provider/housing association landlord usually has fewer problems in obtaining Enhanced Housing Benefit because, in such cases, the local authority can fully recover from the DWP the Enhanced Housing Benefit it pays to registered providers.
In the case of a charity or voluntary organisation the local authority can only recover 60% of the difference between the Local Housing Allowance level and the amount of the Enhanced Housing Benefit claim. Small wonder then that charities and voluntary organisations are finding it harder and harder to claim Enhanced Housing Benefit.
We hear increasing numbers of situations where charities and voluntary organisations that provide supported housing are being told by local authorities that they must become registered providers in order to qualify for Enhanced Housing Benefit and/or be included on local framework agreements.
For most charities and voluntary organisations, applying to become a registered provider is akin to trying to get the proverbial camel through the eye of a needle. However, we understand why local authorities have a problem over subsidy loss due to Enhanced Housing Benefit claims they can’t fully recover, even though the “get registered as a registered provider” solution is a non-starter for the vast majority of supported housing providers.
So What’s The Solution Then?
In short the solution is the Exempt Accommodation Project which we set up earlier this year.
The Exempt Accommodation Project seeks to match non-registered supported housing providers, irrespective of their legal identity (charity, voluntary agency, private provider) 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.
Since we set the Exempt Accommodation Project up we have been inundated with interest from providers and local authorities. We’ve also been successful in attracting a number of small, community-based registered providers to act as landlords by taking a short-term lease on supported housing providers’ properties.
These registered providers must, as a minimum, be responsible for:
- Voids
- Health & Safety
- Tenant satisfaction
- Administration of occupancy
- Physical property standards
For managing the above, usually via the HB eligible (and otherwise entirely free) Cloudigs supported housing management system, the registered providers are paid around £20 per tenant per week. That’s over £100k per year, assuming 100 units of accommodation, the local authorities can then fully reclaim the Enhanced Housing Benefit they pay and supported housing providers have fewer problems in claiming Enhanced Housing Benefit, which we do for them anyway. We also provide the lease and management agreement templates for the registered providers and supported housing providers to use. Our costs, which are minimal, are charged to the Enhanced Housing Benefit claim. So what’s not to like?
The Exempt Accommodation Project is happy to take on more local authority approved providers, but we’re especially in need of community-based registered providers that would appreciate a generous revenue stream whilst making a major contribution to solving their local authorities’ subsidy recovery problems.
So whether you’re a supported housing provider struggling with Enhanced Housing Benefit claims, a registered provider looking for a good revenue stream whilst generating huge value for your community or a local authority looking for a subsidy recovery solution, please talk to us. The Exempt Accommodation Project won’t cost you anything, but it will gain you a lot. It’s what you call a “no-brainer”.