The social housing watchdog has placed Birmingham’s biggest provider of ‘exempt’ social housing under investigation.
Reliance Social Housing CIC has been placed on the ‘Gradings Under Review’ list by the Regulator of Social Housing today.
It’s the first formal step in a process of investigation that will assess if the company is meeting strict rules on how it operates and its financial records, as well as the standards of care for its tenants.
Being placed under review does not mean the company has done anything wrong. It has been launched, though, because the Regulator is investigating matters “which may impact on Reliance’s compliance with the Governance and Financial Viability Standard”.
Reliance oversee around 2,500 HMO-style ‘exempt’ homes around the city, housing thousands of people deemed vulnerable and entitled to extra support and care as well as a roof over their heads.
It is the latest company in this sector to come under scrutiny from a toughened up regulator, which just last month proclaimed that providers in this sector should ‘be nervous’.
Reliance houses tenants including ex offenders, people with drug and alcohol issues, refugees, care leavers, vulnerable people with learning difficulties and mental health issues, the frail elderly and women at risk of domestic violence.
READ MORE: Tragic death triggers closure plan for Selly Oak ‘house of chaos’
The firm’s directors, as listed on Companies House, are Mohammed Sajjid Sarwar, who is named as the person with significant control, chief executive Amer Ijaz, and Mohammed Tariq Hanif Malik and Clifford Faulder.
The company has grown rapidly since relaunching in 2017 under its new name of Reliance Social Housing community interest company.
From overseeing a small number of properties in 2018, it has become the biggest provider of this type of housing in the city, used to provide accommodation to people who are entitled to enhanced housing benefits because they are deemed in need of extra support and care.
Using a lease based model that’s increasingly falling foul of the regulators, the company, which is run as a non-profit organisation, engages managing agent companies to run the properties and look after residents.
The quality of the care provided in the ‘exempt’ sector, and the impact of clusters of ‘exempt’ properties in some city neighbourhoods, has come under attack from MPs, councillors, the police and residents’ groups.
Earlier this summer Reliance Social Housing announced it was going to stop opening new properties in areas with ‘too many’ similar homes already operating.
However, the company has also come under fire after a series of incidents in its properties, with complaints made to Birmingham City Council, the police and the Regulator.
In one incident a property operated by Reliance was closed after a sudden death and a series of complaints from neighbours in Selly Oak.
Some of its agents have also been praised for their work – among them High Quality Housing Ltd, the company behind a refurbished hostel in the city helping vulnerable tenants.
In a statement this morning, chief executive Amer Ijaz said: “We have actively engaged with the Regulator of Social Housing and enjoyed an open, transparent dialogue.
“During this period, we have provided the Regulator with evidence detailing our governance, procedures and operations.
“We are disappointed at the Regulator’s decision at this stage but will continue to work with them to ensure they are fully aware of the high standards we hold ourselves to.
“However, it is important to understand that the Regulator has informed us that being placed on the Grading Under Review list does not automatically mean that a downgrade to a non compliant grading will follow.”
Last year Birmingham Live launched an investigation into the sector after being alerted to concerns from tenants, campaigners and local politicians.
Chief Constable Dave Thompson also spoke up this year to urge the Government to toughen up the regulations and inspections process amid fears the sector was a potential goldmine for exploitation.
Exempt accommodation is a non commissioned and unregulated type of supported housing.
Providers registered with the Regulator of Social Housing oversee the accommodation – sometimes they own the property, but increasingly the properties are leased from owners, on a contract basis, and either the registered provider or a managing agent looks after the property and its tenants.
People entitled to exempt accommodation have to find a property, or are referred to one, and apply for and get enhanced housing benefit, which is paid direct to the registered provider. The cash comes from the Department for Work and Pensions, via the local council.
The sector is used as a means of housing those with no other housing options, such as prison leavers, rough sleepers, refugee and migrant groups, and those experiencing substance abuse issues, or who are otherwise at risk of homelessness.
In Birmingham, more than 4,000 properties are registered for exempt provision, with more than 19,000 rooms provided. Landlords can get a lot more for a room rented out under these rules than to a regular tenant.
Exempt tenants also have to pay a top up amount for support and care during their stay. It should be a stepping stone to more permanent, fully independent living.
But the support and care only has to be ‘more than minimal’ to meet regulations – a loose definition open to exploitation. Police and care agencies fear the sector is ripe for exploitation by criminal groups.
Residents across the city – including action groups in Handsworth, Stockland Green, Selly Oak and Edgbaston – have joined forces to plead for an end to more properties, with fears that when badly run the houses become a magnet for crime and anti social behaviour.
The decision by the Regulator to probe Reliance formally comes hot on the heels of judgements against more exempt social housing providers in the city, potentially plunging the future of thousands of tenants into uncertainty.
Ash-Shahada Housing Association (ASHA) and Concept Housing Association were found to be non-compliant last month (July), both deemed failing to meet the regulator’s governance and financial viability standards.
That announcement came five months after both providers were placed on the RSH’s grading under review list, meaning they were being investigated for matters that could affect their compliance with regulatory standards.
We understand a judgement on Reliance is likely to come much sooner.
Since 2014, the number of exempt accommodation properties and the number of people they house in Birmingham has ballooned. The city is deemed a national hotspot, with many of those housed here being sent from other parts of the country.
In April 2014, Birmingham City Council recorded 3,679 exempt accommodation units in the city. By early 2018, this had grown to 11,000, before hitting 14,000 in December 2019 and then 20,000 for the first time last October.
The city council has since launched a series of initiatives to try to raise standards, including a new Quality Standard and a charter for tenants explaining their rights, while also backing a petition pressing for stricter inspections and regulation of the sector. It is also working closely with the Regulator.
(Image: Darren Quinton/Birmingham Live)
Of seven of the biggest providers of exempt accommodation in Birmingham, five have now been graded as non-compliant – Prospect, New Roots, Ash Shahada, Concept and Sustain – while Reliance is now under review. A seventh, 3CHA, is awaiting the outcome of a review launched in February.
Prospect, which housed around 1,600 people, announced it was closing down after its ruling; New Roots announced it was also going to exit the sector as a result.
HAVE YOU BEEN AFFECTED BY THIS STORY? DO YOU LIVE IN ‘EXEMPT’ ACCOMMODATION OR NEARBY? Please share your experiences – email jane.haynes@reachplc.com
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