Hostels from hell: the ‘supported housing’ that blights Birmingham

The private hostels are meant to care for vulnerable homeless people. But as crime soars, users suffer and neighbours despair, questions are being asked

Ela Sozeri felt hopeful when she was sent to a privately owned hostel in Birmingham, where support staff promised to help get her life back on track. She dreams of one day setting up her own craft business but has been held back by mental health problems and spells of homelessness. Yet her stay soon turned into a terrifying ordeal, which left her and her boyfriend cowering in their rooms in fear.

“When they showed us around, they told us we would get daily contact and support. But we actually didn’t get any [proper support],” she said. “We’ve only had problems here because the other tenants were heroin and crack users. We’re here because of emotional difficulties and having nowhere to live – not for drugs or anything like that.”

Sozeri and her boyfriend were targeted by another couple after they made complaints about prostitution and drug taking in the hostel, which is operated by one of the country’s main independent providers of supported housing, Concept Housing Association. They were so scared they hid in their rooms. “I was having panic attacks every day,” she said. “Anytime we’d leave, we got threatened.”

During their six-month stay in the house, they were assaulted on four occasions, most recently in March. “We went downstairs to make a coffee and they came out of their room,” she says. “The man stabbed my boyfriend with a screwdriver three times. And the woman pushed me on to the floor and stamped on my head screaming ‘I’m gonna kill you’.”

Man collapsed because of drugs
Residents say it’s not unusual to see people affected by drugs in the neighbourhood. Photograph: Handout

They are just some of the thousands of vulnerable people, reliant on benefits, sent to live in unregulated, hostel-style accommodation in neighbourhoods across Birmingham. The hostels – which take everyone from ex-prisoners and people with drug and alcohol problems to discharged mental health patients and victims of domestic violence – are supposed to provide care and supervision but there are few checks because the accommodation is not commissioned by councils or government agencies.

Shortages of traditional social housing have driven local authorities, prisons and charities to refer vulnerable people into properties leased from private landlords by new independent providers, which have expanded rapidly over the past four years. Others have found their way into the hostels via desperate Gumtree and Spareroom searches for the few landlords willing to take people on benefits.

Britain’s second largest city is now the centre of this burgeoning market, which despite receiving millions of pounds of public money every week to help people turn their lives around stands accused of leaving vulnerable people with little or no support. Birmingham has seen the number of bedspaces in these hostels and shared houses double from 11,000 in early 2018 to 22,000 in March this year.

Figures uncovered by the Observer reveal for the first time the 10 biggest independent providers in the country are on course to collect £184m in housing benefit this year – generating on average more than £11,600 every year for each of the nearly 16,000 bedspaces they supply.

Yet seven out of these 10 providers are either non-compliant or under investigation by the government’s social housing watchdog, the Regulator of Social Housing (RSH), for breaching governance and financial standards designed to prevent public money from being misused and protect tenants from harm. But only two providers are exiting the market following regulatory action, with the rest continuing to receive public money.

Unlike traditional housing associations, these new providers lease many hundreds of properties from private profit-making landlords and outsource day-to-day management to a multitude of profit-making private agents. The RSH, which is privy to the confidential lease agreements, estimates 90% of the housing benefit income goes into private hands

Caps on housing benefits that usually limit landlord profits at the bottom end of the rental market do not apply to hostels offering extra support as they are classed as supported accommodation. The providers typically collect between £200 and £250 a week for each room – more than three times the top benefit rate for a room in a rented house. This has led one MP to brand them “goldmine hostels”.

Some neighbourhoods in Birmingham feel as if they have been taken over by these unregulated hostels, many of which are divided Victorian houses. In the north of the city, the wide streets of Stockland Green have become unrecognisable to long-term residents, with some comparing the area to an “open prison”.

***

On a shady street corner, local people gather to tell the story of what has happened to their once-proud, tight-knit community. Frightened abuse victims calling at their doors for help. Needles and super-strength lager cans dumped in front gardens. Stabbings. Fights. Drug drop-offs. People collapsing in broad daylight. Police raids. Elderly and disabled residents too terrified to leave their homes. Fed-up families selling their homes to landlords to turn into yet more hostels.

“It’s brought about a feeling of hopelessness. No one is listening to us. No matter how much you object, nothing changes,” says Teresa Palmer, 60. “It has gone from bad to very bad to almost impossible.”

Maria Hunter and Teresa Palmer
Stockland Green residents Maria Hunter, left, and Teresa Palmer. Photograph: Tom Wall/The Observer

Her friend, who has lived in the same house since 1966, is equally scathing about the fate of Stockland Green, which has more than 700 bedspaces in nearly 250 shared houses in a ward measuring under 1.5 miles across. “It has changed from an area where people used to love to be to an area where no one wants to come to,” says Maria Hunter, 72.

On a parallel street, an apparent drug deal is unfolding. A man in filthy clothes picks up a package from a phone box and then stumbles back towards a hostel. He gets into an argument outside and starts punching and kicking the door. Eventually, he leaves, screaming and snapping twigs in his hands, in some sort of doomed effort to comfort himself. “We’re used to it,” says Palmer, unfazed by the scene. “It’s not the worst we’ve seen – he’s not on the bonnet of a car or on the pavement.”

This is not an isolated example: trouble frequently spills out on to the streets as support for residents is so patchy. Antisocial behaviour and crime rates have soared by nearly 50% in Stockland Green over the past three years while it has fallen across the city over the same period.

Further to the east, residents in Handsworth, home to 260 “goldmine hostels”, have similar complaints as crime has soared. Barbara Petris, 79, who has lived in the same house since 1972, believes the area is going back to the bad old days, with overcrowded slums in multiple occupation. “When I first moved in, taxi drivers didn’t want to come here. It was a real no-go area,” says Petris, chair of her road’s housing action group. “Those problems are now magnified a hundredfold.”

Barbara Petris
Barbara Petris, who has lived in the same house in Handsworth Wood, Birmingham, since 1972. Photograph: Tom Wall/The Observer

Yet it is the vulnerable people who always appear to suffer most. Across the road from Petris a battered, unlocked door leads into a dingy corridor of a terraced Victorian house, which is provided by Concept Housing Association and managed by a private firm called Assist Housing. Paul Day, 37, claims he was left to survive on two tins of beans for three days after an injury left him unable to visit a food bank. “My mum usually takes me to the food bank,” he says, shifting from foot to foot. “But she’s busy with work and I’ve done my ankle in. I phoned my key worker and told them ‘I can’t get down there’ and she said ‘that’s not my problem’.”

Day, who, like most residents pays a weekly service charge of £10 on top of the rent, which is covered by housing benefit, says he rarely sees anyone from Assist Housing. “I’ve lived in two and half years and not once have I had a key worker come down to see what I’m doing with my life. For all my key worker knows, I could be dead,” he says. “There are five people in this house and they are not getting support.”

Mixing together people who have completely different needs, with little or no supervision, can have dreadful consequences. There have been multiple deaths and at least three murders in the sector, including a woman killed by another resident. In some cases, perpetrators of domestic violence have even been placed alongside victims of domestic abuse.

Carly Jones, the chief executive of Sifa Fireside, the largest homeless day service for single adults in the city, is kept awake at night because her staff often have no choice but to refer people to the worst parts of the sector. “Residents rightly get very upset about crime and antisocial behaviour. But this isn’t just about individuals behaving badly. Vulnerable people are being concentrated in one place without enough support,” she says. “It is a systemic issue.”

Birmingham city council and West Midlands police have been unable to halt the spread of the hostels. Birmingham’s central location as well as relatively cheap and easily convertible, large Victorian housing stock has made it attractive to providers keen to quickly take on properties to meet demand around the country.

Sharon Thompson, who holds the council’s housing brief, says providers search nationwide for people to fill their beds. “Providers go touting for business – they contact prisons across the country and offer rooms to people about to be released,” she says. “There are more than enough of these beds to house vulnerable people in the city so they are looking elsewhere for tenants.”

Along with the police and local MPs, Thompson is doing what she can to hold back the tide. The council has introduced the country’s first voluntary charter for providers, closed down a handful of the disruptive hostels and used government funding to carry out some inspections. Yet the sector has continued to expand and complaints from residents still fill her inbox. “I’ve got the housing portfolio but I’ve got no powers whatsoever when it comes to non-commissioned supported accommodation,” she says.

This type of housing is not subject to the planning controls that apply to other kinds of multiple occupied accommodation, meaning that whole streets can be taken over by hostels. Nor are support levels defined in housing benefit regulations, with case law merely suggesting it needs to be above minimal. This means the council cannot refuse to pay providers giving what they regard as inadequate support to residents.

Thompson wants the government to step in or better still allow the council to house more vulnerable people itself. “I would prefer that they just gave us the money, to commission [supported housing] ourselves to be quite frank but if they can’t or they don’t want to they need to tighten up the market,” she says.

***

In the meantime, providers are receiving hundreds of referrals from across the country, with the pandemic only increasing the flow of vulnerable people in need of housing. Research by Birmingham University and Spring Housing Association has found that a third of referrals into the sector come from outside Birmingham. Ch Supt Mathew Shaer from West Midlands police says London boroughs and other metropolitan cities are purchasing accommodation in the city. “Birmingham ends up being a net importer of the vulnerable people and the issues that they have,” he says. “They’re exacerbating the vulnerability because they’re taking people out of any sort of local network. It is really wrong.”

The lack of checks on the landlords and agents operating under providers has even led to organised criminals entering the market. “There is an opportunity for organised criminality to wash their illegal money through this legal system,” says Shaer. “If you invest your ill-gotten gains into houses in multiple occupation and you then start to receive income for the people you are taking in, that is a wonderful way to launder money.”

Shabana Mahmood, Birmingham Ladywood MP, who has repeatedly raised the issue in parliament, argues ministers have for too long relied on a laissez-faire approach. “While the evidence against unscrupulous providers of supported accommodation mounts daily, and countless lives are blighted, action against them has not been forthcoming,” she says. “It is nothing short of a national disgrace.”

Flytipping in Stockland Green
Fly-tipping in Stockland Green. Residents claim a rise in antisocial behaviour has accompanied the spread of unmonitored private hostels in the area. Photograph: Handout

Mahmood wants action to be taken now, with support spelled out in benefit regulations as well as a fit and proper person test for all providers of supported housing: “I find it frustrating – how hard can it be to look at a sector that has no regulation and then regulate it?”

The RSH, which cannot carry out criminal investigations and lacks prosecuting powers, says it works with non-compliant providers to meet standards. “We expect non-compliant providers to put things right and return to compliance as quickly as possible,” says Harold Brown, RSH’s senior assistant director in charge of investigations and enforcement.

Concept Housing Association says it is aware of the assault at the property where Sozeri lived. It claims she and her partner turned down an offer to rehouse them and did not engage with repeated offers of support. David Fensome, Concept’s chief executive, says the people it works with display a range of challenging behaviours: “We manage this risk by providing carefully planned support and ensuring lower-risk individuals are housed elsewhere.” Knight Housing, which manages the property for Concept, says it was “shocked by the accusations”, which “came out of the blue”. It says it gave the two residents weekly floating support and contacted them during the week. It says the £10 top-up covers groceries, internet and bills.

Assist Housing and Concept Housing Association claim they were not notified of Day’s injury but have now contacted him to offer help. They say he receives support at least once a week, with food vouchers and food parcels supplied. The other residents, they say, receive regular support. They claim the proportion of income going to agents and landlords is more like 30%. Assist Housing says the income it receives covers support needs, as well as property lease costs. “We provide regular support to our service users in order to improve their lives,” says its CEO, Mohammed Sadique.

The Ministry of Housing says the government’s pilot projects will inform a national approach, and whether new legislation is needed. “We expect all supported housing to be of good quality, offer value for money and provide the right support for residents,” says a spokesperson.

In Birmingham, Sozeri is now sofa surfing with her boyfriend. The hostel was supposed to be a new start but it nearly cost them everything. “They claimed thousands of pounds to support us,” she says. “They are exploiting vulnerable people. It is outrageous.”

‘Goldmine hostels’: the big players in the market

Concept Housing Association

One of the nation’s biggest independent supported housing providers, it is currently under investigation by the Regulator of Social Housing (RSH). Still, it collects nearly £860,000 every week in exempt housing benefit from 3,848 bedspaces in Birmingham, putting it on course to receive in excess of £44m of public money this year.

The association says it is working with the RSH to address any concerns. It says it invests in high-quality homes and services for residents, with support staff working hard to address challenging behaviours. “We exist to support the housing and support needs of some very vulnerable people,” says David Fensome, the association’s chief executive. “Private landlords frequently turn such vulnerable people away and, without us, often there is no other choice but to sleep on the street.” He adds Concept carries out quarterly property inspections and audits of support services. The association, he says, has adopted Birmingham city council’s standard for supported accommodation and has cancelled several contracts with providers following resident surveys.

Sustain (UK) Ltd

The regulator deemed it noncompliant. It found it had provided excessive remuneration and had no independent non-executive board members in 2019. It also identified conflicts of interest arising from transactions with companies owned by its executives. Its 2019 accounts show its chief executive Pauline Hughes was paid £215,000 and more than £1.3m was paid to companies linked to its directors. Yet it is set to receive more than £20m this year.

Sustain says it is working towards compliance with the RSH’s governance standard. It says issues related to conflict of interests have been resolved, and no executives have any businesses that trade with Sustain (UK). It says the founding members of Sustain were paid above market rates for a period because they had initially worked unpaid.

“Sustain (UK) takes great pride in the service it provides, which has always included a strict inspections regime that covers both the quality of property and the support given to each individual tenant,” says Hughes.

Reliance Social Housing

The biggest provider in the country, it is responsible for nearly 6,000 bedspaces in Birmingham and is forecast to collect £69m in housing benefit this year. While it is not under investigation by the RSH, the non-profit company is on the radar of the regulator and council. A hostel it runs in Selly Oak closed in April after a resident was found dead in his room and neighbours complained about drug-dealing and bonfires.

Reliance has failed to register any of its bedspaces as supported social housing despite housing thousands of tenants claiming housing benefit for supported accommodation. This means most of its stock falls outside key parts of the regulatory regime which protects tenants and ensures rents are below market levels. The RSH is in contact with Reliance about the issue.

Reliance Social Housing was repeatedly approached for comment but refused to respond.

Contributor

Tom Wall

The GuardianTramp

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