Council to clamp down on housing ‘racket’ that leaves it to pick up bill for dodgy landlords

Rochdale Council is to clamp down on a housing ‘racket’ that is costing the authority more than £1m a year. It will target rogue landlords who rent out ‘supported living’ properties to people with care needs.

While this type of accommodation is needed, unscrupulous providers cash in by charging the council while providing substandard accommodation and support.

A report notes that relatively low property prices in the borough attract investors, but this can have a ‘significant effect’ on the authority’s finances – ‘and, in some cases, the support provided is not appropriate’.

The ‘support’ can sometimes consist of a telephone number which is manned for 30-minutes a week – for which the council is charged a management fee. The council is left with a £1.2m deficit as a result of such schemes.

Bosses are now launching a ‘supported housing pilot’ to take on those who play the system for financial gain. A new team will inspect premises, check the support provided and inspect the books.

Peter Maynard, the council’s strategic housing manager, explained the situation to a council scrutiny committee earlier this week.

“The private sector has cottoned on to the fact that they can get additional monies on top of the rent for providing support,” he said. “The council ends up picking up the bill for that and there is a substantial financial deficit attached to that unsupported housing benefit.”

He told councillors the government was effectively using supported housing rates from 2011 to recompense the council. That, he said, equated to 60% of today’s costs, meaning the council was left to find the remaining 40%.

He also highlighted how it was not always the case that a property was suited for supported housing. But the council was ‘duty-bound’ to pay out on a landlord’s claim unless it could find a good reason for not doing so.

He continued: “And the level of support provided is not legislated. So there are some of these properties where the support amounts to a phone number that is available for half an hour a week.

“And if you don’t phone in that half hour you won’t be getting any support. There are others that amount to filling in a housing benefit form if they move in and then filling in a housing location when they want them to move out.”

He agreed with committee chair Tom Besford that the practice was a ‘racket’ and the pilot was a ‘war of attrition against poor providers’.

“So we are challenging them,” he said. “If they are challenged, what we tend to find is that they tend to go away and go to another borough where they are not challenged.”

The government is under pressure to introduce legislation to stop rogue supported-housing landlords, but Mr Maynard said nothing had been forthcoming.

Councillor Besford suggested working with the borough’s two MPs to see if more could be done.

Addressing Mr Maynard, he added: “The way you have presented it, it sounds like a racket here and it needs sorting out.”

Rochdale Council’s communities, regeneration and environment overview and scrutiny committee met at Number One Riverside on Monday (21 March).

Nick Statham, Local Democracy Reporter