Second reading (Lords) of the Supported Housing (Regulatory Oversight) Bill (private bill) - Apr 21

Moved by

Lord Best

That the Bill be now read a second time.

Lord Best (CB)

My Lords, I am honoured to be piloting this Bill through your Lordships’ House and am grateful to noble Lords for attending this Second Reading debate today—especially, if I may say so, the Minister, for whom this Friday afternoon engagement follows an extremely heavy week of seemingly endless debates on the Levelling-up and Regeneration Bill, apart from many other important engagements.

I declare my interest as a vice-president of the Local Government Association, which has backed the Bill and is keen to engage with the Government, alongside other local government representatives, on the details of its implementation.

The Supported Housing (Regulatory Oversight) Bill comes to us as a Private Member’s Bill initiated by Bob Blackman MP in the Commons. We all already owe a deep debt of gratitude to Bob Blackman for his previous Private Member’s Bill—I had the honour to take it through its House of Lords stages—which became the Homelessness Reduction Act 2017. This has proved a seminal piece of legislation, significantly improving measures to address homelessness. Now we must thank Bob Blackman for his sterling work bringing forward this Bill. Support for both his Private Member’s Bills has been provided by the charity Crisis, which does so much good work in this field. Crucially, as with the earlier Bill, government backing for this legislation has been forthcoming. This essential help is much appreciated. As a Cross-Bencher, I am delighted by the cross-party support for the Bill, and I hope noble Lords will today also express their approval.

What does this Bill seek to do and why is it necessary? As its title indicates, it makes provision for regulation of supported housing and for related enforcement of proper standards for accommodation of this kind. In fact, it is concerned with only a subset of what is known as supported housing. “Supported housing” covers all accommodation where there is additional provision of assistance for the residents—including, most significantly, specialist housing for older people. The Bill concerns itself only with that part of the supported housing spectrum that comes with the extra label of “exempt”, meaning it is exempt from the usual restrictions on rent payable for those in receipt of benefits. Indeed, the Bill could have been called “the Supported Exempt Housing (Regulatory Oversight) Bill” if that was not too much of a mouthful.

It is this exempt accommodation that over recent years has become problematic. The rents are exempt from housing benefit limits—in particular from the rental caps imposed by the local housing allowance ceilings, which were frozen in 2020 for privately rented properties. Landlords have been able to charge much higher rents for exempt accommodation and get them covered by the taxpayer on the understanding that these properties would be let to vulnerable people with special needs who would receive proper care and support.

Most supported exempt housing is performing an extraordinarily difficult role for people in extreme circumstances. Often, a registered housing association is the landlord and a specialist organisation provides the care, funded by local authorities and the occupiers. Schemes serve people with learning difficulties, survivors of domestic abuse, victims of modern slavery, people released from prison with nowhere to go—which links this debate with our previous debate today on the problems for offenders released with no accommodation —and many others. Higher rents are justified by the need to pay for extra housing costs: from greater turnover and higher maintenance and repair costs to longer vacancies between lettings.

The majority of these schemes deserve high praise, with staff who are often positively saintly in their caring roles. Decent supported housing certainly merits a lot more funding to maintain and extend this essential work, but on the other side of the same coin is a system subject to appalling abuse. Because of the higher rents from the exempt status, the arrangements have attracted the very worst kinds of landlords. These businesses can be so lucrative that one MP in the Commons debate on the Bill commented that the profits were higher than for dealing drugs.

The House of Commons Levelling Up, Housing and Communities Committee, under the exemplary chairmanship of Clive Betts MP, produced a full report last October on exempt accommodation. This has acted as a very helpful substitute for pre-legislative scrutiny. The committee found that unscrupulous companies were making excessive profits by capitalising on the loopholes: in essence, charging exorbitant rents for low-quality housing with little or no support for the residents, using untrained staff and lacking management. Cases have been uncovered of rooms in close proximity being allocated to those recovering from addiction and those still dependent on drugs, women fleeing domestic abuse next to men with violent histories, and other management horrors. The Committee noted that

“the current system offers a licence to print money to those who wish to exploit the system”

and said:

“This gold-rush is all paid for by taxpayers through housing benefit”.

Properties with unsupervised, unsupported, vulnerable occupiers can also cause problems for the neighbourhood: anti-social behaviour, drug abuse, rubbish and vermin, and crime, including involvement of organised criminal gangs. The health and wellbeing of those living in these overcrowded and poor conditions can deteriorate drastically. Despite much-inflated rents, residents are often required to pay for “services” from their non-housing benefits, yet taking a job is not an option because that would jeopardise access to higher housing benefit levels and therefore lead to the loss of a place to live.

The problem has been compounded by landlords obtaining planning consent under permitted development rights for the lowest-quality conversions of family houses and ex-commercial buildings. Bob Blackman has highlighted a two-bedroom property converted into a house with eight bedrooms, no living rooms and only one shared bathroom. Then there are the property deals that have cashed in on the exempt status of supported housing. The Commons Select Committee cites the case of 12 properties in west Devon that were sold to an intermediary body for £6 million and re-sold the same day to an offshore investment company for £18 million, because of the high yields expected to be gained from leasing the properties for exempt accommodation.

It is hard to be precise about the scale of this problem because of the lack of data collected locally and the complexity of the different overlapping housing types and providers. As the House of Commons committee noted:

“The Government does not know how much exempt accommodation there is or how many people live in exempt accommodation”.

The overarching problem of a desperate shortage of affordable rented homes lies behind the opportunities for some operators to abuse the system. Because councils must meet their obligations towards those who would otherwise be homeless, they are sometimes forced to refer people to supported exempt housing which they have not commissioned, and which lies beyond the scope of very light-touch regulation. There are two ways of escaping this dilemma for local authorities. The first is for the real supported housing sector to be enlarged. Better government resourcing from the Department of Health and Social Care, as well as the Department for Levelling Up, Housing and Communities, is needed, not least to replace the loss of the previous Supporting People revenue grants. Secondly, the sector must be rid of the cowboy operators that take away resources and undermine the rest.

In its report, the House of Commons Select Committee made a series of recommendations covering the collection and publication of data, accreditation of providers, and enforcement of national standards by local authorities, alongside more intervention by the Regulator of Social Housing. The Bill before us takes forward this reform agenda from the Commons Select Committee and learns lessons from five pilot schemes successfully trying better regulatory arrangements, as well as from the amendments proposed during the Bill’s Commons stages. It now paves the way for a full and robust response to the issues.

The Bill sets out duties for the Secretary of State to appoint within a year a supported housing advisory panel, which would represent the interests of local housing authorities, social service authorities, registered providers of social housing, relevant charities and residents themselves. The panel’s job would be to provide the necessary information and advice to the Secretary of State and local authorities, to improve provision and regulation of supported exempt accommodation.

The Bill requires local authorities to review provision in their area, to publish and regularly update a supported housing strategy that assesses what is available and what is needed, and take this on board in local policy-making. The Secretary of State is empowered to set out national supported housing standards covering the necessary requirements for the housing and support that must be delivered.

The Secretary of State is given powers to require operators of supported exempt accommodation to be licenced by the local housing authority. Licensing would enable councils to see that the national supported housing standards are met and that only a fit and proper person can be in charge of the accommodation. Licensing would incorporate a range of conditions relating to the quality of both the accommodation and the care, with penalties for failure to comply.

The Commons Minister has made an ambitious commitment to lay the regulations for the licensing regime and publish the national standards within 18 months of the Bill passing. The Bill requires the Secretary of state to review the position three years on and consider whether a further measure would be helpful, specifying supported accommodation as a planning use category—that is, requiring planning consent.

These measures add up to a firm response to the need for a regulatory framework to cover this neglected part of the housing sector.

Before concluding, perhaps I may address two anxieties that have been raised as the Bill has progressed. I will ignore the concerns of the speculative investors and property traders, who will, no doubt, protest the death of this golden goose. First, there is concern from local authorities that they will be taking on additional burdens in producing their local supported housing strategy, collecting and sharing data, and introducing and enforcing a licensing scheme. I believe this fear has been allayed by the Government’s clear commitment to compensate local authorities accordingly and I know that the Local Government Association, in supporting the Bill, will work to make sure that extra costs are met. It remains a matter for further consultation whether all councils—including those with little or no supported exempt housing—will be required to participate in the new scheme. The advantage of the Secretary of State requiring every local authority to have a licensing scheme is that rogue landlords cannot simply move their business from a licensed area to one without such regulation.

Then there are the worries of the hard-pressed housing and care providers themselves, who fear that regulation will increase their costs and risks with no comparable gains. Their supported housing schemes are often on a hand-to-mouth basis at present, with insecure, short-term contracts for the care providers and, consequently, poor pay and conditions for care workers. One large housing association explained to me the financial hazards of working with a number of care providers who are desperately trying to do a good job. There is always a danger that a heavy-handed approach to regulation, with too high a regulatory fee, could be the straw that breaks the camel’s back and means that fewer bona fide players continue to operate.

These fears from the decent providers should not materialise if the licensing scheme is handled with care. I am delighted that the major providers and the National Housing Federation—a statutory consultee for the process—have supported the Bill. Sensitivity is needed to avoid any unnecessary burdens at this time when other operating expenses have risen dramatically, but the Government’s recognition of this danger will be a core component in making the legislation succeed.

To conclude, my hope is that ensuring supported exempt housing is brought under local authority control and abuses are ended will lead to the release of funds, restore faith in supported housing and enable growth in a properly regulated sector. Then the Bill will lead to greater protection and real support for people living the most difficult lives imaginable. I commend the Bill to your Lordships and I beg to move.

1.05pm
Lord Young of Cookham (Con)

My Lords, the Bill is another production from that well-known partnership of Blackman and Best, purveyors of high-quality legislation to the Houses of Parliament following their last production, the Homelessness Reduction Act 2017. We look forward to the further fruits of this partnership.

I commend the speech that the noble Lord, Lord Best, has made, and his continuing commitment to drive up the standards of housing in this country. There is no one better qualified than he to promote this legislation in your Lordships’ House. He touched on the need for this legislation in a debate that we had on supported housing in Grand Committee on 30 March, and he has further explained today why it is needed.

In October last year, the Select Committee in another place that the noble Lord referred to published its report on exempted accommodation, describing the system as “a complete mess”. While there were many good providers, as the noble Lord said, in the worst cases the system involved

“the exploitation of vulnerable people who should be receiving support, while unscrupulous providers make excessive profits by capitalising on loopholes”.

At the time of the Library briefing there had been no government response to that report. Perhaps the Minister can shed some light on the timing of that response.

I shall follow up briefly on two points made by the noble Lord. I hope the Bill will drive out of business the unscrupulous landlords he has so rightly condemned, but of course the demand will remain and the shortage of supply will need to be made good by organisations that can meet the requirements of the Bill. That will require some proactive initiatives by the Government and by local authorities because I do not believe that the market will respond automatically. Is the Minister able to spell out the steps that her department and the DHSC will now take to make sure that adequate provision is made by responsible organisations, particularly in those parts of the country where abuse is currently rife, to complement the provisions in the Bill?

Secondly, the Bill gives various obligations and powers to the Secretary of State. I wonder if I can press the Minister on the progress that she anticipates making in discharging these. In Clause 1, are steps under way to identify people who will serve on the advisory panel once Royal Assent is achieved so that we can get off to a flying start?

In Clause 3, the Secretary of State has powers to make regulations setting minimum standards for exempt accommodation. That is crucial to the whole Bill, which comes into effect two months after Royal Assent. Have discussions started with the LGA, social landlords and other providers about what those standards might be? Can the Minister say when they might be introduced? Until they are, the abuses that the noble Lord, Lord Best, has referred to will continue.

Lastly, under Clause 4, the Secretary of State can introduce a licensing scheme that providers of exempt accommodation must secure before they can operate. Will the Minister confirm what the noble Lord has just said: that the Secretary of State is indeed minded to use those powers within the period of 18 months?

Having made those two points and asked some relevant questions, I congratulate the noble Lord, Lord Best, again on his piloting the Bill through Second Reading. I hope it reaches the statute book soon.

1.09pm
Baroness Warwick of Undercliffe (Lab)

My Lords, it is clear that there is an urgent need to reform non-commissioned exempt accommodation. I congratulate the noble Lord, Lord Best, on bringing the Bill forward. I wholeheartedly support its aim to drive rogue landlords out of this part of the supported housing market.

It is important to stress, as the noble Lord did, that many exempt-accommodation providers deliver high-quality services and homes that are desperately needed, but rogue providers have been able to enter this part of the market, trading on gaps in funding as well as gaps in oversight. As a result, some residents now live in disgraceful and completely unacceptable conditions. Vulnerable residents have reported truly shocking examples of unsafe housing, non-existent care or support services, feeling financially trapped and having a lack of control over where they were housed. They have experienced exploitation and neglect.

These issues were well documented in the Levelling Up, Housing and Communities Select Committee report into exempt accommodation published last October. It provided a thorough account of why these problems have arisen and what should be done about it. It presented compelling evidence for immediate reform. The noble Lord, Lord Best, a member of that Select Committee, has presented us with an important step in the right direction. His Bill seeks to put in place greater regulation of supported exempt accommodation and to give local authorities the tools to tackle problematic provision. From my previous involvement in the housing sector, I know that exempt accommodation providers are not inherently poor quality or poor value for money. Many housing associations use this model to provide well-run, non-commissioned services appropriate for people with support needs, including sheltered housing for older people, refuges and hostels for people who are homeless.

So, how have some unscrupulous landlords and organisations been able to exploit the system to extract high levels of return while delivering poor-quality or unsuitable accommodation and services? While oversight and regulation of rogue providers has been inadequate in some parts of the country, underfunding of commissioned services has led to a significant and rising unmet housing need among vulnerable groups. Growing numbers of people are desperate for a home. This can make it feel impossible for people to say no to the offer of a home, even if it does not feel safe. The growth of poor-quality providers has to be understood in that context. We are facing an acute shortage of social housing, so it is essential that reforms are accompanied by increasing the supply of new supported housing to meet this growing need.

The Government’s recent announcement on adult social care calls that into question and is deeply worrying. The £300 million housing transformation fund—first announced by the Government in December 2021—would have been a vital step towards ensuring that some of the most vulnerable people have the support or care they need in a home that is accessible to them. The Government seem to have reneged on this commitment during Easter Recess when they published their plan for adult social care reform for 2023-24 and 2024-25, which omitted it completely. Can the Minister explain this decision and confirm whether this pre-committed investment will be made available to supported housing providers via alternative funding streams?

An investment of £300 million to integrate housing with local health and social care strategies would have significantly bolstered supported housing’s contribution to the strategic aims and statutory duties of the NHS, social care and criminal justice services, boosting outcomes for resident health and well-being. In a time of huge cost pressures, supported housing urgently needs greater security of funding and a strategic footing to meet growing need across the population. I urge the Government to address this as part of their efforts to root out poor-quality provision.

The National Housing Federation, which is a statutory consultee in this legislation, has welcomed this Bill and is committed to working closely with the Government to ensure that the reforms are targeted and effective. It has pointed out that many supported housing providers operate in dozens of local authority areas, so the new licensing framework in this legislation could present a significant new financial and administrative burden for tenants and not for profit landlords. This is particularly true of older people’s housing let on a social housing rent, which is subject to consumer regulation by the Regulator of Social Housing and is not the primary target of these regulations.

The NHF has called for a clear exemption or a passporting system for older persons’ housing and other types of supported housing where there is already an adequate regulatory framework to accompany the new licensing system, so that good-quality providers are not subject to duplicated regulations and significant new administrative costs. This will also reduce the demand on local authority resources and allow councils to concentrate on problematic schemes and providers. I hope the Government will take this on board.

Clarification is also needed around the costs of obtaining a licence and whether this will be subject to regulation. If uncapped, costly licensing schemes could act as a financial barrier to much-needed supported housing. This detrimental effect would surely be contrary to the laudable aims of this Bill. I would be grateful if the Minister could confirm whether a cap will be in place.

The Long Title of the Bill, as the noble Lord, Lord Best, pointed out, refers to the regulation of supported exempt accommodation. This definition has no clear legal status, so the scope of these regulations is not yet clear. Establishing a rigorous definition and the scope of regulation in secondary legislation will be essential to reduce the risk of unintended consequences and ensure that local authorities have the right powers and resources to tackle the rogue providers.

Having said that, I end with the point I made earlier: it is vital that there is proper funding for housing-related support so that new supported housing can be provided to meet the unmet need that exists right across the country. As we drive rogue providers out of the market, it is incumbent on the Government to support the delivery of the high-quality supported housing that residents deserve.

1.15pm
Lord Campbell-Savours (Lab) [V]

My Lords, we have just heard a very well-informed contribution from my noble friend. I greatly welcome this Bill. It provides me with the opportunity to comment on the accompanying Commons report, which I have been sitting on for something like five months, awaiting this debate.

After 43 years in Westminster, I can recall only a small number of occasions where the publication of a Select Committee report has caused so much anguish and concern to committee members about the state of a publicly funded provision and the use of public expenditure. I sat on the Commons Public Accounts Committee for 10 years, and I cannot recall even a National Audit Office report on such a breakdown in the use of public funds. I was shocked to read this devastating report last year, and I congratulate the Commons Levelling Up, Housing and Communities Committee, under the chairmanship of Clive Betts, for its brilliant exposure of a problem which I suspect most Members of both Houses were completely unaware of. I certainly was unaware of it.

For the anoraks outside the House who are following this debate—there are many—the report is numbered HC 21. It was published on 27 October last year and is entitled Exempt Accommodation. In its summary, it refers to a system which

“involves the exploitation of vulnerable people … while unscrupulous providers make excessive profits by capitalising on loopholes”.

That has already been referred to by the noble Lord, Lord Best, but I repeat it for emphasis, because it is a very important statement to include in the report. It also says that

“some residents’ experiences of exempt accommodation are beyond disgraceful … Where the very worst experiences are occurring, this points to a complete breakdown of the system”.

This is hardly the language of reports we have heard from other Select Committees over the years. It continues:

“Areas with high concentrations of exempt accommodation can also attract anti-social behaviour, crime—including the involvement of organised criminal gangs—rubbish, and vermin”.

We have to remember that people have been living in these appalling circumstances. The report then reveals that

“organisations with no expertise are able to target survivors of domestic abuse and their children and provide neither specialist support”

nor a safe environment.

The report is scathing on the availability of data. It accuses successive Governments of having been “caught sleeping”, with a scarcity of data. It cites, for example, the inability to establish how widespread the very worst experiences are and how many exempt accommodation claimants and providers there are. I am sure we can all agree that these shocking revelations demanded action. Clive Betts’s committee’s report, followed by the Blackman initiative, have delivered what I would argue successive Governments of all persuasions have failed to deal with.

I want to flag up a number of issues arising from both the Betts report and the subsequent debate in the House. I make it clear that it is not my intention to seek to amend the Bill before us in any way; we need its swift passage into legislation. However, there remain some issues on which we need further assurances. For example, there was talk in the Commons of the requirement for new planning powers for local authorities to be able to proactively manage the market. The Government have responded with a review, which needs to be followed up.

There was a call more generally for greater national monitoring and oversight powers and of a reformed regime of enforcement. There were calls for the establishment of a system of evaluation and improvement notice orders. This needs to be followed up with a comprehensive consultation process. Of particular concern to my Labour colleagues when it was considered in the other place was the issue of limited resources and the effect on cash-starved, overburdened local authorities, some of which may choose not to license. They may be the very authorities with the greatest problems. The Government’s consultation has highlighted the problem but not dealt with it. But the issue of resources goes wider. For example, what of the funding of the cost to local authorities of adopting licensing schemes? The schemes will cost money, and the money will have to come from somewhere.

Finally, on a wider issue that falls slightly outside the remit of the Bill, there is a need to close the regulatory loophole whereby unscrupulous, exempt non-profit-making providers who let both at below market rents and at market rents are able to operate outside consumer legislation. That was partly dealt with during Commons proceedings, but it remains outstanding. My people have proposed a solution. Will Ministers follow this up at some stage after the Bill’s passage? Could the Minister assure me that the matters that I have raised will be followed up, perhaps in a letter to me?

According to MP research, we are now told that there are 153,000 households in exempt accommodation, with escalating numbers in recent years. Some people argue that that is an underestimate. The problem is that the stats reveal little, as local authority returns are limited in scope. That certainly needs rectifying.

Finally, I want to say a few words of appreciation to Mr Bob Blackman, Member of Parliament. He is not of my political persuasion—we differ politically on many issues, I am sure—but on this issue he has undertaken a fine piece of work on which he should be congratulated, and we are all indebted to him. I hope that this Bill proceeds unamended, without further debate, to the statute book. Equally, I hope that the Government will give clear instructions to their officials to get on with it. We need to deal expeditiously with this appalling state of affairs.

1.23pm
Baroness Walmsley (LD)

My Lords, on these Benches we support this Bill, and I congratulate the noble Lord, Lord Best, and his colleague Mr Blackman in the House of Commons on its introduction. It is an important attempt to address the shortcomings in the quantity of good-quality supported housing, which is, because of its greater cost, exempt from the usual housing allowance cap.

As the noble Lord, Lord Best, and others have pointed out, there are many good providers who run high-quality units with appropriate support for vulnerable people to live in the community. They are to be congratulated on that. However, they and many local authorities are very concerned about the entry into the market of unscrupulous people who buy up properties, divide them into tiny units and let them out to vulnerable people with minimal if any support, because of the profits to be made. This Bill is an attempt to address that by setting minimum standards and providing a licensing and monitoring framework and tools to assess and plan for adequate provision, as well as new planning provisions—all on the advice of an expert national team and after consultation with the sector. It is very comprehensive and seems to cover all the bases.

However, we have been warned that there are issues to be wary of. There is a national shortage of supported housing of all sorts. Margins are tight and the sector is fragile. It would be tragic if these measures were implemented either too quickly or in the wrong way, resulting in the loss to the market of good providers. As the noble Lord, Lord Young of Cookham, pointed out, it has to be done in a way that does not impact those good providers. I know that the Government support the Bill, so I ask the Minister: how does she plan to protect good providers? Do the Government plan to take initiatives to stimulate the supply of good provision?

Local authorities will be given new duties in order to implement this Bill, and we all know that they are already hard pressed and short of cash. First, they do not always know what they have already got. There is a lack of consistent data on how many providers there are and how many are of poor quality. That is why the Bill makes lots of good common sense, by asking local authorities to assess the need for exempt supported housing in their area over a five-year rolling programme, so that they can then plan and publish a strategy to enable them to fulfil that need. I think we can all agree that planning on the basis of accurate data is always the basis for the success of any plan in the public service.

Secondly, local authorities will also become the licensees for providers. It is obvious that this will require ongoing monitoring and assessment. The detailed guidance should take existing regulations into account to avoid duplication, as the noble Baroness, Lady Warwick of Undercliffe, pointed out. There is no doubt that all this will require additional funding, but it will be money well spent. Indeed, all this boils down to questions about funding and timing. Can the Minister say how long will be given for the consultation, whether there will be pilot schemes in a few areas to identify any glitches and develop good practice that can be disseminated across the country, and how much new money will be provided for local authorities to carry out these duties?

These measures are designed to improve the housing conditions of some of the most vulnerable people in society—conditions which have an enormous impact on the quality of their lives. Many of these people do not have a voice or the wherewithal to complain if they are being badly treated. These measures could change all that, if they are implemented well and funded adequately. Headlines will not do. Timely action and adequate cash are needed. Can the noble Baroness assure the House that we will get both of those?

1.27pm
Lord Khan of Burnley (Lab)

My Lords, I am aware that I am the penultimate speaker in the last debate on a Friday, so I will be as concise as possible. I thank the noble Lord, Lord Best, for sponsoring the Bill in this House and all noble Lords for their very informative and eloquent contributions. I particularly thank my noble friend Lady Warwick of Undercliffe for all her work in this area when she was the chair of the National Housing Federation, and for recently securing a debate in Grand Committee on supported housing and homelessness.

The Opposition welcome this Bill and I thank everyone involved at all stages of the Bill for progressing it. We on these Benches regret how long we have had to wait for legislation to address exploitation and profiteering at the hands of rogue exempt accommodation operators, and the fact that progress in this area has been dependent on the ongoing success of Bob Blackman MP in the Private Member’s Bill ballot initiated in the other place. Unfortunately, there are loopholes in the current system that have been open to exploitation. There is evidence that unscrupulous landlords have been capitalising on those loopholes and claiming uncapped housing benefits to make a profit. In fact, my noble friend Lady Taylor of Stevenage was just telling me that an accommodation provider was charging up to £10,000 a week, which is scandalous.

The Bill will create a minimum standard for type and condition of premises, as well as for the care and support provided. There has been a clear correlation between high concentrations of exempt accommodation and antisocial behaviour and crime. We support the measures in the Bill. It is a means to enhance local authorities’ oversight of supported housing and to enable them to drive up standards in their area. As we have long argued, a robust framework of national standards for the sector is essential.

Some 153,700 households in Great Britain were housed in exempt accommodation in May 2021, but the lack of data means it could be much more widespread than even that figure suggests. This point was made in the other place, as well as by my noble friend Lord Campbell-Savours. We need a better understanding of the issue; that will be driven by increased data. I look forward to hearing how the Government plan to achieve this.

Furthermore, we would like to see new planning powers to allow local authorities to proactively manage their local supported housing markets; enhanced provisions for national monitoring and oversight; an expanded list of new banning order offences and establishing the evaluation and improvement notice procedures, so that local authorities can drive up standards without implementing a full licensing regime. We remain of the view that those suggestions have merit and believe that they will need to be revisited if the Bill fails to deliver in the way that we hope it will.

We encourage the Minister to give serious consideration to giving local authorities powers equivalent to those in Part 1 of the Housing Act 2004, which provides for the housing health and safety rating system, hazard awareness notices and improvement notice procedures. As the Minister will know, outside large urban areas, most local authorities have only a handful of officers, if that, in their private rented sector teams. We need to ensure that there is a suite of options short of licensing that will allow small authorities to bear down on the problem.

My final point is related to local authority resources, a point the noble Lord, Lord Best, made in his introduction, along with other noble Lords. The Bill will place additional requirements on local authorities to carry out reviews of supported exempt accommodation in their districts and to publish supported housing strategies. In addition, authorities which believe it necessary to adopt licensing schemes and are in a position to do so will face additional cost as a result. My noble friend Lady Taylor of Stevenage raised the issue of adult and social care funding going to upper-tier authorities in two-tier system and there is no requirement for funding to be passed down to housing authorities or district councils, where most housing issues are dealt with.

In the other place, the Minister confirmed a new burdens assessment would be made. Can I probe the scope of that confirmation further? We are concerned that local authorities ultimately may not receive any support for ongoing costs, particularly in relation to licensing schemes. We would welcome some assurances from the Minister that the net additional costs of any new burdens arising from this Bill will be fully and properly funded. If not, how do the Government believe the ongoing costs can be made self-financing?

Those specific concerns aside, we very much welcome the fact that the Bill is being debated in the Chamber today and wish it a smooth passage through its remaining stages and on to the statute book. It will undoubtedly help to put rogue exempt accommodation operators out of business and better enable local authorities to drive up supported housing standards in their areas. As the honourable Member for Harrow East, Bob Blackman, said,

“it will improve the lives of some of the most vulnerable people in our society”—[Official Report, Commons, 18/11/22; col. 970.]

and bring relief to communities struggling to cope with the impact of concentrated numbers of badly run exempt accommodation properties. We recognise that today is a significant, important step forward and we are pleased to give the Bill our support. Well done team Blackman and Best. The message today from this House is loud and clear: the time in which the rogue landlords have been able to exploit those vulnerable people is rapidly coming to an end.

1.33pm
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)

My Lords, I thank my noble friend—he is not really my noble friend, but he is my noble friend—Lord Best for those kind words. There was no way that I was not going to be here as the Minister to support this Bill because, for me, it is one of the most important Bills we have seen coming through for quite a long time. I thank him for introducing the debate and congratulate him on the sponsorship of what, as I said, is an extremely important Bill. I thank other noble Lords for their support of the Bill today which, I am pleased to say, the Government are also supporting.

I also thank and pay tribute to my honourable friend the Member for Harrow East for his tireless work in making sure that the very important matter of poor-quality supported housing is now placed before this House.

I will begin by setting out the context for the measures contained in the Bill. Supported housing is home to some of the most vulnerable members of our society. People with disabilities and mental ill-health, survivors of domestic abuse, older people and people experiencing homelessness all rely on this important type of housing. Supported housing is more than just a home: it also plays a vital role in delivering better life outcomes and greater independence to those in need by providing care, support and supervision alongside accommodation.

Many excellent providers of supported housing operate in this sector, but I am very sorry to say that there are also rogues. These unscrupulous people are exploiting the system to the detriment of the very vulnerable people it is supposed to support, and at considerable cost to the taxpayer. Let us not forget that the financial benefit gained by these rogues rests on abusing the rules in housing benefit. Ministers at the Department for Work and Pensions agree that it is totally unacceptable that large amounts of public money are being paid out in housing benefit to fund this poor provision.

Before I go on to the Bill itself, I will briefly set out the action that the Government are taking to tackle the issues of poor quality in the supported housing sector. In October 2020 we published the national statement of expectations setting out the Government’s vision for the planning, commissioning and delivery of good-quality accommodation in supported housing. We also launched the supported housing pilots—which I think the noble Baroness, Lady Walmsley, brought up. Between October 2020 and September 2021, we funded five local authorities with a total of £5.4 million to explore ways of improving quality and value for money in the sector, particularly in exempt accommodation.

We published the independent evaluation of the pilots in April 2022 and have continued to build on the success of this initiative. Our ongoing supported housing improvement programme is backed by £20 million of funding and is helping 26 local authorities tackle quality issues in some of the most affected areas of the country, but we realise that we must go further. The evaluation of the pilots was clear that without providing additional powers to local authorities, our ability to fix these issues is limited. That is why the Government announced their intention to regulate the supported housing sector in a Written Ministerial Statement in March last year.

This Government’s priority is to protect the welfare of their most vulnerable citizens, and the Bill includes powers to bring in the crucial regulation that is required. We are determined to drive up quality in supported housing and drive out unscrupulous providers. Driving up standards is critical given the harmful consequences that the worst of this appalling accommodation can have for the vulnerable people living there and the damaging impacts we have seen on communities blighted by anti-social behaviour.

I will now move on to the measures set out in the Bill. The supported housing sector is increasingly complex, cutting across tenures, including both social housing and private housing supplied by charities and voluntary bodies. Given this complexity, it is right that the Government should seek information and advice about supported housing from experts. The Bill therefore creates an advisory panel, which will be established within a year of the Bill becoming law.

During the passage of the Bill in the other place there was much discussion of the paucity of data available to government on supported housing, and we have heard that again today, particularly from the noble Lord, Lord Khan of Burnley, and the noble Baroness, Lady Walmsley. We recognise the lack of data on supported housing; it is crucial that we make improvements in this area. I am pleased to say that we already have research under way to provide an estimate of the size, and importantly the cost, of the supported housing sector across Great Britain, as well as estimates of future demand. The Department for Work and Pensions has also made changes to its systems to improve the data it holds on housing benefit claims.

In addition to those measures, the Bill places a new duty on local housing authorities in England to produce supported housing strategies. These strategies will assess the current provision of supported housing and will require authorities to forecast future need in local communities. The more information and data we have, the better-informed decisions we can make about supported housing now and into the future.

For the first time, there will be a set of national standards for support: the national supported housing standards. Currently, the only requirement set out in housing benefit case law is that the support being provided is “more than minimal”—this is simply not good enough. These national standards will cover the type and quality of accommodation being used to deliver supported housing, as well as the quality of support that residents receive. The standards will apply to all supported housing providers in England and will be enforced through local authority-led licensing schemes. Licensing will apply to districts designated by either the Secretary of State or the local authority.

The Bill also sets out what conditions will need to be met in order to obtain a licence. These may refer to the standard and the use of the accommodation, the requirement for a support needs assessment, the provision of care, support and supervision, as well as meeting the national standards. Penalties will rightly apply where licensing conditions are not met, or where supported housing is operating without a licence in a designated licensing area. Powers in the Bill allow us to make provision for offences and penalties in the licensing regulations.

The Government are aware of the potential for unintended consequences for people in need of supported housing services. Crucially, the Bill places a duty on the Secretary of State to consult on the key measures that I have set out before making any regulations. This includes a requirement to seek the views of statutory consultees. Stakeholders can be reassured that the Government are determined to work with them to understand the impact of these measures and to ensure that any risks are understood before proceeding. But we are clear that the purpose of these changes is to drive out rogue providers, which is paramount.

Further measures in the Bill include a requirement to review the effect of the licensing regime after three years, to consider whether a change in planning law is warranted. This was brought up by a number of noble Lords, and I assure them that we will review that. A change to homelessness legislation will ensure that anyone who finds themselves forced to leave supported housing because it does not comply with the national standards will not be intentionally homeless. My noble friend Lord Young of Cookham brought up the important issue of social housing data on the demand for supported housing that is not held centrally. We are commissioning that research because we need to know what the effect will be once we put these measures in place. We need to know the current and future demands, because we cannot have people being made homeless unintentionally through the Bill.

As I said, the Bill also requires local authorities to produce strategic plans, as we heard, and they will therefore forecast the need in their areas. In order to produce those plans, they will have to know the baseline for accommodation at that time. Local authority providers and the Government are there to ensure that supported housing needs can and will be met.

My noble friend also raised the issue of discharging obligations and powers in the Bill. First of all, as I said, the advisory panel will be set up as soon as possible after the Bill becomes law and will be an important part of ensuring that these actions are delivered. My noble friend brought up national standards, and, as I said, the Government have already started work with stakeholders across the housing sector to develop the standards. As far as the licensing is concerned, the Government will consult on measures to enforce the standards, and, as I said, we intend to introduce a licensing regime, as is set out in the Bill.

A number of noble Lords brought up the issue of the Select Committee report. The Government are considering the areas that the Select Committee highlighted, and we will publish a response in due course. We know that the Bill alone is not enough, so we are committed to taking forward further action, if needed—first of all, to get rid of rogue landlords, and, most importantly, to keep driving up the quality of supported housing.

The noble Baroness, Lady Walmsley, brought up the really important issue of the impact on good providers. There are some fantastic providers out there; I know that personally, because my daughter is in supported housing, as I have mentioned before. The Government are determined to avoid any unintended consequences for good providers of supported housing. We are already working with stakeholders on the detail, and, as I said, we will consult before committing to the detail of the licensing scheme and the standards.

The cost to local authorities will be assessed. I know that this is important, quite rightly, if we are putting new burdens on local authorities—and this is a big burden, as well as an important one. Costs will be assessed through the new burdens process, as usual. I hope that response puts noble Lords’ minds at rest on that subject.

The noble Lord, Lord Campbell-Savours, brought up a number of issues, most of which will be covered by the 12-week consultation, but I am more than happy to look at Hansard and go through his questions to make sure he gets a written answer, as that is what he asked for. We will make sure that copies of that will be in the Library.

The noble Baroness, Lady Warwick of Undercliffe, discussed the costs of the licences and the exemptions from licences. As I said, the Government will consult on the whole scheme. Is important that local authorities and other stakeholders all get involved in that consultation, because it will be a better scheme if the people actually working in the sector get involved before we completely set it up.

Those are my responses to all the questions. There were a lot of questions on funding. The Government are absolutely aware of this and are considering and doing research on the costs of these services for the future and for this type of accommodation. I feel quite strongly—as I know the noble Lord, Lord Best, does, too—that this is part of the continuum of keeping people in their own homes with dignity for as long as possible in their lives, so this will be an increasingly important housing sector in this country for people we look after in some parts of their lives.

In closing, I will repeat that there are many excellent providers of supported housing, who are determined to provide an excellent service for their residents. Those good providers have nothing to fear. As I said, my officials are already working with stakeholders to design a scheme that will drive out the rogues but enable good-quality supported housing to continue to be delivered as it is now.

We know that time is of the essence, and the Government have committed to laying regulations within 18 months of the Bill becoming law. As I said, I am enormously grateful to my noble friend Lord Best—I still call him my noble friend—for sponsoring the Bill, and to my honourable friend the Member for Harrow East for his work in the other place. The Government are committed to stamping out the practice of rogue providers exploiting vulnerable people, at considerable cost to the taxpayer. The Bill is a crucial step forward in ensuring that people receive good-quality support in a market free from unscrupulous actors.

Lord Khan of Burnley (Lab)

Before the noble Baroness sits down, I want to ask about the issue that my noble friend Lady Taylor of Stevenage has raised previously and I raised today about passporting funds, where in two-tier authorities higher authorities passport funds to housing authorities and districts. Can the noble Baroness get back to us on that?

Baroness Scott of Bybrook (Con)

I think that that will be part of the overall research into how the system works and where the money is. It was interesting that, even at the Select Committee, a provider said that there is money in the system but it is not being used correctly. We need to have the data on this to look at all those issues.

Baroness Warwick of Undercliffe (Lab)

The noble Baroness gave us a very comprehensive response, but will she comment on my point about the £300 million in the adult social care strategy?

Baroness Scott of Bybrook (Con)

I understand that that has gone. I do not know the details, but I am very happy to write to the noble Baroness.

1.50pm
Lord Best (CB)

My Lords, I am deeply grateful, as I know Bob Blackman MP will be, for all the support that noble Lords have shown for this measure. I shall pick out one or two points that might still be hanging in the air. I am deeply grateful to the noble Lord, Lord Young, for his support on this as on so many other housing matters. He makes the point that, if we close down some of the bad guys, where will people go, unless we also build up the good guys at the same time. I think that is an important lesson. As for the Government’s reaction to it, it is well worth bearing in mind that the cost in housing benefit terms will reduce when the rogues are no longer being paid excessive amounts for their accommodation. It is a reproportioning or reallocating of resource, rather than simply an extra burden for government.

The noble Baroness, Lady Warwick of Undercliffe, spoke with great authority from having chaired the National Housing Federation for many years. The loss of the housing transformation fund of £300 million is painful. I hope that the consultations that relate to this Bill will reveal the need for that sort of sum to be put back into play. We have three departments involved here—the Department for Levelling Up, Housing and Communities; the Department of Health and Social Care; and the Department for Work and Pensions—and the trouble is always that the gains are found on one side and the losses in another department’s budget. We need those three to be thinking of these things together; I hope they will and that we will not see this as a net loss at the end of the day.

I am grateful to the noble Lord, Lord Campbell-Savours, for his very powerful analysis of what has been going on. I thank him for quoting “beyond disgraceful” as the real adjective that should be used for some of this ghastly accommodation. It is worth bearing in mind, in terms of following through on this, that there are quite significant commitments on timescale; we do not always get Ministers explaining that they will not only endeavour but will succeed in achieving the national standards and having the details of the licensing scheme fully consulted on and brought together within 18 months, and that the licensing scheme itself will start up in a year. So, we have some timescales there and after three years we will see whether a planning power is needed, after evaluation of how things have gone. There is back-up in terms of a timescale that Ministers have put on the record and I think that is helpful.

I am grateful to the noble Baroness, Lady Walmsley, who welcomed this measure from the Lib Dem Benches. Like so many others, she mentioned the local authority workload, which will be a sore point if there is no compensation. I took it from the Minister that there will be a new burdens assessment and that this is likely to cover—I hope very fully—the extra costs of getting involved with a licensing scheme, collecting and sharing data and the rest. That will be important; as we know, with the underfunding of local authorities more generally, it is a difficult time to add burdens unless they are fully paid for.

I must not dwell on all the contributions of other noble Lords, but I am grateful to the noble Lord, Lord Khan of Burnley, for his support. He too made those points about new burdens, which are absolutely valid.

I conclude by thanking the Minister very much for her comprehensive and entirely sympathetic response to the issues raised. We really are on the right road; we have a framework that we can now polish and improve upon in the consultative processes that will follow. I thank the Minister for her personal support, which will be invaluable in taking things forward.

I conclude by once again thanking my colleague Bob Blackman. None of this would have happened had he not been absolutely tenacious in seeing this through all its Commons stages.

Bill read a second time and committed to a Committee of the Whole House.