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Interview: safe as houses?

Drug gangs are using loopholes in benefits and housing law to launder cash and exploit people. Police Oracle speaks to West Midlands' Chief Constable Sir Dave Thompson who wants it to end but says his force is powerless.

Interview: safe as houses?

Date - 7th January 2021
By - Chris Smith

Housing is a critical issue for police forces but beyond a search warrant, there are limits in what officers can do.

The legislation hasn’t kept pace with significant changes to modern living, especially the rise of generation rent. Not only that, the care system has crumbled during the austerity era.

And even before then the shift away from local authorities providing social housing meant finding accommodation for vulnerable people has become increasingly challenging.

The fallout from the Friday Drop, when emergency placements by local authorities are found on a Friday afternoon for people who could end up on the streets, is now an issue for police forces across the country.

Private landlords are increasingly providing housing for vulnerable people but the quality of provision is mixed. HM Probation Inspectors have raised concern about the lack of managed secure housing for ex-offenders, following the case of serial rapist Joseph McCann.

The reality is that people are being placed wherever a public sector agency can with whatever funding they can afford. 

Social housing is usually an issue for charities, local authorities, the Department for Work and Pensions and Whitehall ministers. Now, for the first time a Chief Constable has joined the housing debate and made a call for change.

Sir Dave Thompson has called for action to deal with exempted accommodation which is a source of crime and exploitation in his West Midlands force area.

This type of accommodation is part of the housing industry where private landlords are providing a room in shared properties for people who need help other than basic accommodation. Benefits pay for the landlord to provide care, support and supervision funded direct from the DWP.

This isn’t familiar ground for a Chief Constable, so what’s going on?

He says the care isn’t being provided, criminals are cashing in, checks aren’t being made and his officers are picking up the pieces.

He tells Police Oracle: “We’ve been doing quite a bit of work on this that started a few months ago. Birmingham has been particularly badly affected by this. We’re quite centrally located and we’re not a million miles away from anywhere. Parts of the inner city areas have quite a lot of large accommodation that’s quite cheap.

“We know that criminals will invest their illegitimate proceeds into property, especially the cannabis gangs. We know they have moved into unregulated youth care homes.”

Why would they do this and how is this possible.

His blunt answer is: “It’s the money and the ability to exploit people.”

What follows is a shocking list of failures that are enabling criminals to launder cash – and pocket public sector cash on the way. The root cause, he says, is lax regulation.

He says: “What we’re also concerned about is that criminals are able to set up a company for £12. There are 1,700 registered to Companies House every day. Others are starting Community Interest Companies for £27.  They use those properties to launder cash. They go into a market they can operate in and HMOs (houses of multiple occupation) is one.

“They go into a market where they can operate. Property is generally very easy. It’s too easy, there are too many loopholes,” he says.

CC Sir Dave Thompson: "There are too many loopholes"

Housing used to be the domain of local authorities but the move towards housing associations, the sale of council house building and the reduction of housing teams has weakened their hand.

It’s not a new issue: councils have been complaining for more than a decade that they don’t have the powers to deal with rogue landlords operating HMOs (houses of multiple occupation) – and in particular the sheds-with-beds that don’t meet even basic standards.

Local authorities have tried to introduce landlord licensing schemes but have faced stiff opposition from the property sector. Newham Council in London created a borough-wide scheme but it faced stiff opposition. A London-wide scheme proposed by Mayor Sidiq Khan was challenged by the housing minister.

Currently councils have to apply to the government, as Liverpool City Council is currently doing, for even a basic scheme.

Sir Dave isn’t interested in the politics, but he does want order: “The concern with the exempt and unregulated housing sector is that nobody appears to be in control of this. Even if someone needs additional support, there’s no need to tell anyone.”

The Department for Work and Pensions is paying landlords under the scheme but it does not follow up and councils aren’t allowed to check what’s going on.

He says: “Benefits go direct, there’s no inspection or oversight – and it’s more lucrative because of that.”

One of the biggest loopholes is enabling owners to stay under the radar: “If you are funded to provide a children’s home with 24/7 care, the requirement is to notify the local authority. With this, you can go to other local authorities to be a provider, not just the one. You are under no obligation to inform the local authority where you operate,” Sir Dave says.

It’s a lucrative trade with fees of around £7,000 per child per week - and if only two children are on the premises, they don’t have to be registered. That’s a potential income of £728,000 a year.

The explosion in unregulated accommodation is also destabilising the local property market, the chief says. “Some of our wards have got 300 of these properties. Quite literally, where there’s one of these lots more follow. If your house is not one of these, it means it’s quite hard to sell and the only likely buyer is a provider.”

There is a lack of properly supervised accommodation 

The result in his area is chaos – and danger for many of the tenants: “We’ve seen these properties having a mix of residents; very vulnerable people who are fleeing domestic abuse, care leavers and sex offenders. The provider controls aren’t there. Many of the people we see are not from the West Midlands area.

“We find them because we’re called there on a regular basis. They are generating ASB, drugs and other demands for us.”

The lack of oversight is also limiting the ability to trace property owners; company documents can change overnight and there are no local documents.

He says: “The regulatory regime is not a local authority system so it is very difficult to find out who owns it. Local authorities should have a role around this. It’s unregulated.

“We see it less in the sectors that are still quite regulated by local authorities. They have to submit a change of use application. There is still quite a lot of control.”

Access to vulnerable people is also increasing the risk of exploitation by the very people who were supposed to provide a safe haven.

Sir Dave says: “We have examples where we have seen people who are saying their home is one of these, they are taking two children and they have criminal connections. One case was linked to County Lines. Children can be placed with them: we are concerned because they frequently go missing.”

His tough stance is backed by the force’s Police and Crime Commissioner David Jamieson. Better local partnership working isn’t going to solve this.

He is also well aware of the dangers of engaging in issues that aren’t part of the job. The regional mayor, Andy Street, sits between local leaders and central government. The city's Labour council, the biggest in the country, has come under pressure from ministers before over social services issues.

“It becomes very political here,” he says.

But that won’t solve a problem that cuts across multiple agencies and government departments.

Sir Dave says: “Our local authority colleagues can’t control or manage it. And they’re not silly. It needs substantial reform. There aren’t many powers the police have because it’s a housing issue. We do what we can to support them. It’s now causing all sorts of big problems.”

All he wants is a problem solved: “We have to involve local government more. I don’t think it would take very much to change this. We know there is a pressure on accommodation but I don’t think this is a good way of doing this.”

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