Private Firms Treating Housed Residents as Cash Cows, Investigation Finds
A broadcast investigation into supported housing for ex-prisoners, people recovering from addiction and women fleeing abuse finds providers drawing large sums in housing benefit for minimal care. One provider received £443 a week — £23,000 a year — for a single resident’s room and support. The department paid £410m for such accommodation in Birmingham alone last year.
The loophole is in the law: a registered provider need only offer care that is “more than minimal”, and in return the accommodation is exempt from the usual housing benefit caps. The scale in one city is striking — more than 34,000 people are in this kind of housing in Birmingham, against about 22,000 in London, a city more than seven times the size. The money trail is documented rather than alleged. A sister company of one provider bought a house used for this purpose for £191,000 in 2024 and sold it a year later for £410,000, according to Land Registry records; its owner says he spent about £150,000 on renovation and associated costs, and has paid himself £2.9m in dividends over three financial years plus more than £900,000 in other earnings across his companies. One large provider wrote off £1.8m over payments to former directors and companies they ran. The resident at the centre of the case says the advertised support did not exist: “On the adverts, they will often say that you have weekly support sessions, help with GPs. It’s not the case at all.” The leader of Birmingham City Council calls it “a scandal”.