Reply To: MYSPACE and the regulator

Alistair Costelloe

A non compliant judgement has no direct effect on HB claims but may direct authorities to scrutinise the provider more thoroughly depending on the content of the judgement – I.e. Conflicts of interest, financial irregularities, failure to meet the criteria enabling an exception from the rent standard, or quality issues, all of which may have a bearing on whether the arrangements are contrived or whether services are being provided at a sufficient level to enable a scheme to be accepted as exempt.

The Exempt Accommodation definition makes no reference to rent levels or compliance with regulatory criteria – these are separate matters covered elsewhere in the HB regs, or in separate legislation for the latter, namely the Housing and Regeneration Act 2008

If a provider ceases to be an RP the decisions would need to be reviewed depending on whether the accommodation was accepted as exempt accommodation or whether the eligible rent was simply accepted as reasonable and not restricted because the landlord was an RP at the point of the claim. A decision to accept a claim as exempt wouldnt be affected by a de-registration decision, but would affect the authority’s subsidy claim, and the need to refer claims to the rent officer in connection with the subsidy claim. If an RP’s tenants HB claims for a rent exceeding the LHA were accepted on the basis of reasonableness, they would need to be checked against the exempt critieria at the point or deregistration, or the award restricted to the LHA.

Unreasonably high rents are not directly related to whether the provider is registered or not – I dont believe that awards for exempt accommodation can be restricted on the grounds that the landlord isnt an RP, but its something that invariably gets done by refusing exempt status instead. Authorities have a few tools available to control rents, firstly by restricting rents to what they deem a reasonable level, or by doing as David has explained above and in the other thread, by advancing a contrivance argument, and paying no benefit at all until the case goes through tribunal – in my view a somewhat heavy handed approach but one which may be entirely justifiable depending on the level of engagement and co-operation from the provider and the quality, relevance and availability of evidence.

There is very little interplay between the HB regs and the regulatory standards and registration criteria. There’s no record of registered providers that do provide SSH, but you can see from the regulatory judgements where the RSH has raised concerns and draw your own conclusions. In any case, authorities should satisfy themselves that a claim accepted as exempt continues to be exempt by periodically obtaining evidence to be able to uphold the initial decision.

Ultimately, the accommodation either is or is not exempt, and the rent either is or not unreasonably high – these are decisions that the authority is at liberty to make in respect of a claim, and the claimant is at liberty to appeal against.