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    I’ve been out of HB for a while so this may be an easy question.
    The situation is that a council buys B&B accommodation from a landlord at, say £100 a week. It puts homeless families/singles in there and charges them, say, £200 a week (paid by Hb of course)and turns a tidy profit.

    Is this legal?


    I can’t see how it could be illegal, but given the organisation that is doing this it sounds rather immoral.

    Surely its the same as my local shopkeeper going to the wholesalers and buying something for say £1, then charging me £1.50 for it, on the grounds that he has costs to cover etc etc.

    The council may have had to take on a comkmittment to pay whether they have someone there or not, so there may be “hidden” costs, but if not it still sounds like sharp (but not illegal) practise to me. 8)


    am afraid this is legal, lots of councils are doing this


    But there could possibly be subsidy penalties depending on whether the rent charged is above the Local Authorities ‘Threshold’ or ‘Cap’, so ultimately this financial cost to the Council could negate any idea of ‘profit’.


    I’d imagine there are also periods when thay have no-one in the B&B but still have to pay the £100 p/w for them… 😕


    When our Housing Department wanted to do something simular we told them about the threshold and cap arrangements and suggested we might limit the rents met by HB under Reg 10. In response they reduced the rents they proposed to charge.

    Kevin D

    Jeff’s post is interesting. It is clear his HB section identified a potential problem in this area.

    Just wonder how many other LAs are using HB in such cases as a means of obtaining an income stream…… and, in turn, how this may affect the possible placement of those homeless ppl into permanent accommodation in cases where a particular family is particularly profitable for the LA……

    Hmmm – that should set the cat….. 🙂


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