Select Committee Report on Exempt Accommodation (2022)

1.  Following a parliamentary inquiry the cross-party Levelling Up, Housing and Communities (LUHC) select committee published its report on exempt accommodation on 27 October 2022.1Levelling Up, Housing and Communities Committee, 27 October 2022, ‘Exempt Accommodation – Levelling Up, Housing and Communities Committee’, accessed 27 October 2022A summary report has also been issued.2Levelling Up, Housing and Communities Committee, 27 October 2022,  ‘Exempt Accommodation – Levelling Up, Housing and Communities Committee’, accessed 27 October 2022

2. The committee’s recommendations to Government are set out below. The Government has two months to respond. 3‘Government Responses to Reports – Erskine May – UK Parliament, para 40.41’, accessed 29 October 2022

Exempt accommodation and survivors of domestic abuse

3. Where a prospective resident of exempt accommodation is a survivor of domestic abuse, there must be a requirement that housing benefit is only paid to providers that have recognised expertise and meet the standards in Part 4 of the Domestic Abuse Act 2021. This must be implemented alongside an increased supply of specialist services: the Government’s Supported Housing Improvement Programme offers an opportunity to develop an evidence-based, survivor-led model of exempt accommodation for survivors of domestic abuse and their children. (Paragraph 33)

Improving and overseeing the quality of provision

National standards and local authority enforcement

4. Within twelve months of the publication of this report, the Government should publish national standards, and give local authorities the power and resources to enforce these standards, in the following areas:

  1. the referral process, which should include an assessment of the prospective
    resident’s support needs and if there are any considerations about with whom they should or should not be housed;
  2. care, support, or supervision, which should include helping the resident progress towards independence and employment;
  3. the quality of housing; and
  4. information the provider must give to the resident, including on their rights, particularly their right to work and right to complain. (Paragraph 55)

Graded accreditation scheme for providers

5. Consideration should be given to an accreditation scheme for providers, implemented on a graded basis, so that councils can assess the quality of provision in their area and so that poorer quality providers can improve.(Paragraph 56)

New burdens funding for local authorities

6. The Government should provide new burdens funding to local authorities to ensure that they can carry out these duties to the best of their ability, recognising that improving the overall standard of exempt accommodation and making it more consistent is likely to save resources in the long-term. The Government should also carry out an impact assessment to identify and mitigate any unintended consequences. (Paragraph 57)

Establishment of National Oversight Committee

7. We recommend that a National Oversight Committee be urgently established to address the oversight issues relating to exempt accommodation. Among its functions we expect that it would coordinate awareness of emerging issues, inform the development of policy in this area and develop proposals for reform of the regulatory system. The composition of the committee should include the existing regulators – the Care Quality Commission, Regulator of Social Housing, Charity Commission, Financial Conduct Authority and the Office of the Regulator of Community Interest Companies – officials from DLUHC, the Local Government Association, and any other organisation it was thought would make a valuable contribution to improving oversight. One of the committee’s first tasks should be to input into the development of the national standards we have recommended. (Paragraph 60)

Data and costs

Collection, collation and publication of annual statistics at local authority level

8. Within twelve months of publication of this report, the Government must organise the collection, collation and publication of annual statistics at a local authority level on the following:

  1. the number of exempt accommodation claimants;
  2. the number of exempt accommodation providers;
  3. the number of housing units used for exempt accommodation;
  4. the number of exempt accommodation housing units per provider;
  5. the number of exempt accommodation claimants per provider;
  6. the number of exempt accommodation providers registered with different regulators, and commissioned to provide accommodation or support;
  7. the number of providers meeting and failing to meet the national standards we set out; and
  8. the amount of money paid by both the DWP and the local authority in exempt accommodation housing benefit. (Paragraph 83)

National review of HB exempt claims and capping of eligible rents and separate support funding

9. The Government should conduct a review of exempt housing benefit claims to determine how much is being spent and on what. Rent should be capped at a reasonable level that meets the higher costs of managing exempt accommodation. Funding for support should be provided separately. (Paragraph 85)

Transparency of exempt accommodation costs and greater local authority control over rents

10. Eligibility for funding for exempt accommodation must be based on an open-book, transparent breakdown of the accommodation and the support costs incurred to the provider. The Government should consider how to give councils greater control over rents for exempt accommodation to ensure value for money. (Paragraph 86)

100% DWP subsidy on HB expenditure on exempt accommodation

11. The same 100% subsidy should be paid by DWP whether or not the provider is registered. Later in this report we recommend that all providers be registered. While this will result in increased costs for DWP, this is likely to be offset by savings resulting from implementing our recommendations to drive out unscrupulous, profit-driven providers. (Paragraph 87)

Planning and licensing

Planning reforms to assist implementation of local authority strategies for exempt accommodation

12. We recommend that these measures include planning reforms that would assist councils to implement local strategies for exempt accommodation based on an assessment of need. (Paragraph 98)

End of existing exemptions from HMO licensing and Article 4 direction

13. Specifically, we recommend that the Government end the existing exemptions that registered providers have from HMO licensing and the Article 4 direction. Furthermore, we recommend that the loophole relating to non-registered providers with properties containing six or fewer residents also be addressed so that they are brought within the planning regime. This action would prevent there being a change of use without planning permission, which would be a much-needed tool to enable local authorities to balance the provision of exempt accommodation with other housing need and to control the density of exempt accommodation in an area. (Paragraph 99)

Call to build more social housing

14. We reiterate the recommendations from our 2020 report, “Building more social housing”—in particular, our call on the Government to build 90,000 social rent homes a year. (Paragraph 100)

Models of exempt accommodation

Compulsory registration of all providers

15. We also recommend that action be taken to address this complex landscape, by making it compulsory for all providers to be registered. A mechanism is required to ensure that there is better quality provision and that standards are maintained. Good providers will have nothing to fear from registration, while the bad providers can have their registration removed. We heard some concerns that the cost and additional reporting requirements of being registered may impact on smaller providers, particularly those reliant on charitable and grant funding. We do not see why this is the case, or why it should continue to be so. Registering should not be unnecessarily onerous or expensive, and if it is that should change. Therefore, we call upon the Regulator of Social Housing to take action to make it easier for smaller providers of exempt accommodation to register with them. (Paragraph 108)

Clamping down on lease-based models

16. The Government must set out how it will clamp down on those exploiting the lease-based model for profit and prohibit lease-based profit-making schemes from being set up. This should include how it will ensure that there is full transparency over ownership structures and how income from housing benefit is being used. (Paragraph 109)

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