Birmingham City Council's housing benefits team has been accused of being 'a soft touch' and a potential conduit for 'mass fraud' in the controversial supported exempt accommodation sector. Two councillors claim the council makes it 'too easy' for new properties to open under non-compliant providers.
Councillors' Allegations
Labour councillors Marcus Bernasconi and Shuranjeet Singh said it was vital the council addresses issues 'in house' while lobbying the Government for new rules. Bernasconi described the proliferation of the sector as 'an indictment on the way this council operates, whoever is in charge.'
He stated: 'I've seen correspondence where the benefits team boasts about being the gold standard when it comes to reviewing applications. By gold standard they mean the speed at which they approve these applications rather than the scrutiny they subject them to. If a staff member were to investigate all 30,000 active claims, at one claim an hour, it would take 15 years to check them all.'
Scale of the Issue
Birmingham is at the epicentre of the exempt housing sector, which provides rooms in shared houses and hostels for 'hard to house' individuals. New data shows the city now has 12,166 exempt properties housing 33,904 people, with the vast majority having no prior Birmingham connections. Some providers command up to £400 per week per room in enhanced benefits.
The vast majority of exempt provision falls under six providers, five of which do not comply with basic governance and financial transparency standards.
Impact on Communities
Bernasconi highlighted the impact on neighbourhoods: 'It affects the family who live next door to a property that's become a brothel, with a revolving door of clients dropped off at all hours... It impacts the mum who sees tenants relieving themselves on the doorstep in broad daylight while on the school run.'
He noted providers 'tout for business' on TikTok and Facebook with 'no questions asked,' including a £100 cash bonus for referrals.
Council Response
A Birmingham City Council spokesperson said: 'Birmingham City Council has robust processes, similar to any other council around supported exempt accommodation and, in some cases, goes beyond other councils. The Department for Work and Pensions has conducted a performance review and approached the benefits service to share the good practice we have in place with other councils.'
The council confirmed an internal audit, overdue to report findings, would be made public 'as soon as possible.'
Broader Concerns
Bernasconi added: 'West Midlands Police have confirmed organised crime has links to supported exempt accommodation providers. Can we be confident that a large scale fraud is not being perpetrated against taxpayers, with hundreds of millions of pounds funneled from DWP coffers to a housing sector allegedly occupied by criminal gangs?'
Cllr Shuranjeet Singh said his ward was blighted by poorly managed exempt accommodation, with the conversion of one family home into a six-bed hostel causing 'an orchestra of chaos.' He urged the city to 'stand up against bad providers and save our communities from being ripped apart.'
