Exempt lodging: Greater than £130m in public cash handed to housing suppliers named and shamed by regulator

More than £132m in taxpayers’ cash for housing the nation’s most susceptible individuals has been handed to suppliers which were named and shamed by the regulator, it may be revealed.

An investigation by The Impartial and openDemocracy has discovered that massive sums in housing profit for “exempt lodging” have been given to organisations since 2018 regardless of judgments or notices from the Regulator of Social Housing (RSH).

The figures, obtained underneath the Freedom of Data Act, cowl 95 of greater than 300 English native authorities, which means the true determine is prone to be far increased.

Some bosses of non-profit organisations have even exploited a loophole in rules so as to money in themselves, our investigation revealed.

Exempt lodging is supported housing obtainable to girls fleeing home violence, these with substance abuse points and other people leaving care, for which suppliers can declare increased charges of housing profit. Suppliers may cost residents service charges on prime of this, that are designed to cowl assist within the properties.

It’s a booming business – the variety of households in exempt lodging in Britain rose from 95,149 in 2016 to 156,868 as of Could 2021, in accordance with figures uncovered by housing charity Disaster.

However it’s also beset by issues, with considerations raised by charities, police and authorities concerning the high quality of assist obtainable to these in exempt lodging, in addition to instances of violence and intercourse work inside properties.

Beneath rules, suppliers of exempt lodging have to be not-for-profit entities corresponding to housing associations or registered charities offering “care assist or supervision”. Nevertheless, our investigation has uncovered examples of those non-profit firms making giant funds to personal corporations linked to their very own administrators or founders.

Costly vehicles and a yacht within the Algarve

Pivotal Properties Group was arrange by husband and spouse Denis and Fiona Dixon in 1999. One a part of the group, Pivotal Housing Affiliation, acquired greater than £1m from councils within the southwest from 2019 to this 12 months for exempt lodging. However the housing affiliation’s most up-to-date accounts present £225,598 in “prices” paid to Pivotal Help Group Ltd within the 12 months to March 2021. That agency is in flip owned by Pivotal Group Holdings, of which Denis Dixon is the co-owner. His spouse was a director of Pivotal Help Group from March 2005 to December 2017.

In the meantime, one other agency for which Denis Dixon is director and co-owner – Charles Terence Estates Ltd – was paid greater than £400,000 in “leases” for hostels occupied by the affiliation in 2020 and 2021. An additional £390,107 from the affiliation was recharged to Charles Terence Estates for the 12 months to March 2021, accounts present.

Charles Terence Estates, in the meantime, has paid dividends totalling £12.95m since 2018 on its total income, in accordance with the corporate’s accounts.

In March final 12 months, the RSH reported a sequence of failings at Pivotal Housing Affiliation, together with that it was “unable to supply satisfactory assurance” that its lodging met the federal government’s social housing necessities.

Noting that the housing affiliation managed items throughout 5 native authorities, the regulator stated: “Rents and repair expenses for Pivotal’s tenants could have been, and should proceed to be, overcharged. As among the value of those rents has been met by way of housing profit and common credit score, there may be implications for the general public purse.”

The Dixons reside within the Algarve on Portugal’s south coast, and social media affords a window into their luxurious life-style of crusing, quick vehicles and skydiving. Denis Dixon’s Fb web page reveals photos of the couple’s yacht, the Navigo, in addition to Bentleys he described as “early birthday presents” in each 2015 and 2018. On his 2015 publish, he added: “Joyful birthday to me!”

Within the UK, they personal a four-bed house in Poole, Dorset, estimated to be price in extra of £1.1m.

Denis and Fiona’s daughter Chloe, a 28-year-old surveyor, is one in every of two individuals with “important management” of Pivotal Housing Affiliation, whereas Fiona Dixon resigned as a director on 11 Could 2018. Denis Dixon stopped being a “individual of serious management” of Pivotal Help Group in April 2019.

Denis and Fiona Dixon didn’t reply to requests for remark, whereas Pivotal stated solely six of its 523 properties leased have been at present owned by its co-founders, at a lease “no increased than another property in our portfolio”. A spokesperson stated the housing affiliation didn’t settle for “any suggestion that we now have sought to use the housing advantages system in relation to exempt lodging”.

‘Disruptive innovators’

There’s a comparable story at Maintain (UK) Ltd, a Birmingham-based supplier. Its web site says its imaginative and prescient is that “susceptible/homeless individuals deserve the chance to reside in housing of a good customary.”

The not-for-profit firm was handed a regulatory judgment in 2019 about “inherent conflicts of curiosity” associated to transactions with corporations linked to its administrators. However, £2.3m was paid to personal corporations linked to 2 administrators – Adam Barwell and founder and ex-CEO Pauline Hughes – in 2020 and 2021.

However regardless of these considerations, since 2018-19 Maintain has acquired £87.5m in housing profit for supported exempt lodging and different “normal wants” housing in Birmingham, separate figures present.

Hughes owns a gated property in Birmingham price in extra of £1m whereas a six-bedroom home on two acres of land, purchased for £900,000 in 2015, is owned by way of one in every of her corporations, Topcare West Midlands Ltd. A gross sales brochure described the property as a “distinguished and really good-looking nation home” that “affords full peace and tranquillity”.

Hughes’ and Barwell’s excessive salaries at Maintain have been highlighted by Inside Housing in 2020, with the pair paid £215,000 every within the 12 months to 31 March 2019. Hughes’ daughter was at one stage additionally employed by Maintain as director of coaching and growth, and was appointed a director in 2014, aged simply 20, earlier than resigning in July 2019. Maintain didn’t present an announcement. Hughes stepped down as director final July whereas Barwell left in January. Neither responded to requests for remark.

Falcon Housing Affiliation (FHA) – topic to a regulatory discover in November final 12 months – has been paid £8.2m in housing profit for exempt lodging by councils from 2018 to 2021-22. Amongst failings, the regulator concluded: “FHA has failed to make sure that any preparations it enters into don’t inappropriately advance the pursuits of third events or are preparations which the regulator may fairly assume have been for such functions.”

Falcon’s accounts present that within the 12 months to 31 March 2021, the agency used the providers of firms associated to 2 administrators, Faisal Lalani and Jamil Mawji, during which “gross sales of £510,466 and purchases of £90,061 occurred”, including: “As on the year-end these firms owe £142,684 to Falcon Housing.” Mr Lalani resigned as a director on 4 October 2021, adopted by Mawji every week in a while 11 October.

The pair – finalists in EY’s entrepreneur of the 12 months award and stated to “see themselves as disruptive innovators” – have been additionally concerned with one other rogue supplier. Auckland Residence Options has been paid £3.6m by councils in housing profit for exempt lodging since 2018. Mr Lalani was director of Auckland from October 2017 till October 2021, as was Mr Mawji from September 2017 to October 2021.

In its regulatory discover final August in opposition to Auckland the watchdog said: “Our investigations additionally recognized that among the lease transaction preparations Auckland has entered into have concerned firms linked to administrators of Auckland, and its shareholder. For these transactions, on a couple of event, Auckland sought and acquired shareholder approval to authorise the reported battle of pursuits and disapply the provisions in its articles referring to them. The transactions have been materials and on-going and in doing so, Auckland has layered long-term dangers onto the enterprise, for which we lack assurance that they are often adequately managed underneath the present phrases.”

Auckland, Falcon, Mr Lalani and Mr Mawji didn’t present remark.

The RSH has powers to take enforcement motion in opposition to suppliers, stating on its web site that it’s going to achieve this if shopper requirements are breached “and there’s a important danger of great detriment to tenants or potential tenants”. Nevertheless, not one of the suppliers above have confronted any such motion thus far.

Push to vary guidelines

In March, housing minister Eddie Hughes set out plans to introduce minimal requirements of assist offered to residents and modifications to housing profit rules to “search to outline care, assist and supervision”.

He additionally unveiled the federal government’s intention at hand native authorities in England new powers to “higher handle their native supported housing market and be certain that rogue landlords can not exploit the system to the detriment of susceptible residents and on the expense of taxpayers”. However, he added, “any measures requiring laws” might be launched “when parliamentary time permits”.

A authorities spokesperson stated: “It’s appalling that rogue landlords are exploiting the supported housing system to revenue from housing susceptible individuals who need assistance to reside independently.

”That’s why we just lately introduced our intention to carry ahead new legal guidelines as quickly as potential to crack down on rogue landlords, shield susceptible residents and provides councils stronger powers to intervene.”

The RSH stated that it had “important considerations concerning the provision of non-commissioned exempt lodging”, however claimed regulatory notices had an impression, with instances of suppliers cancelling growth plans or ceasing buying and selling.