Birmingham City Council is conducting a detailed investigation into its management of the city’s supported exempt accommodation sector, following widespread concerns that officials may be too lenient towards landlords operating within this controversial area.
The council has committed to producing an action plan with recommendations once the investigation is concluded. Details of the internal audit were disclosed in response to a Freedom of Information request submitted by BirminghamLive.
The ongoing probe seeks to determine whether council officers are effectively overseeing the sector and accurately handling exempt housing benefit claims. While the council has previously stated that it received positive assessments from the Department for Work and Pensions, new questions have emerged regarding local oversight.
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Currently, Birmingham hosts over 12,000 exempt properties accommodating nearly 34,000 individuals. Many tenants have no prior connections to the city, with some being placed into housing following release from prisons, hospitals, or other institutions. This influx has made Birmingham the national hotspot for exempt accommodation, sparking concerns among residents and local communities who feel overwhelmed.
BirminghamLive has tracked the impact of this sector for eight years, highlighting the apprehensions of campaign groups, councillors, MPs, and affected residents about the rapid increase of these properties across the city. Questions have also been raised about why neighbouring councils appear better able to scrutinise or reject applications for exempt status, with some providers reportedly describing Birmingham as a ‘soft touch’. The current audit aims to investigate the validity of these claims.
Supported Exempt Accommodation (SEA) is intended to provide specialised housing for vulnerable adults requiring substantial support, including people leaving prison, those with addictions or mental health issues, and survivors of domestic abuse. Eligible tenants can claim housing benefits that are exempt from standard caps, enabling providers to charge higher rents justified by the support services they offer.
The council’s audit was initiated by its cross-party audit committee, responsible for financial oversight, to assess whether existing controls - including commissioning, contracting, provider monitoring, and partnership arrangements - are well designed, effective, proportionate, and offer value for money.
The review focuses on governance, contractor approvals, performance oversight, community impact, enforcement actions, and the financial controls surrounding housing benefit assessments. However, it does not extend to day-to-day casework, detailed building safety compliance assessments, live legal matters, or children’s supported accommodation oversight.
Key council figures involved in the audit include Stephen Philpott, service director of city housing solutions; Tim Savill, assistant director for revenues, benefits and rents; Sally Burns, director of public health; and Sajeela Naseer, director of regulation and enforcement.
Data obtained by BirminghamLive indicates that the city’s supported exempt properties are predominantly managed by six providers, five of whom reportedly fail to meet basic standards of governance and financial transparency. Rents charged can reach up to £400 per room, reflecting enhanced housing benefit claims tied to the provision of additional support.
Cllr Marcus Bernasconi, Labour representative for North Edgbaston, has criticised the sector’s growth as a reflection on the council’s operation. He expressed concerns that the benefits and revenue team has approved over 30,000 live claims for enhanced housing benefit, amounting to over £400 million of taxpayer money entering a sector deemed vulnerable to criminality.
Cllr Bernasconi highlighted correspondence describing the benefits team’s processing of applications as a ‘gold standard’, which he interprets as referring to processing speed rather than thorough scrutiny. He estimated that at a rate of one claim examined per hour, it would take 15 years to review all live claims, suggesting potential oversight gaps. He also referred to allegations that providers have identified certain council employees with a lax attitude towards benefit approvals.
The council has maintained that its processes are robust and in line with, or exceeding, those of other local authorities. It noted that the Department for Work and Pensions conducted a review of Birmingham’s housing benefit allocations related to supported exempt accommodation, subsequently asking the council to share its practices with others. While acknowledging the need for greater regulation across the sector, the council insists it is working within its legal powers.
Meanwhile, the Government is preparing new legislation intended to tighten regulation of the supported exempt accommodation sector in the near future.