More than £ 132 million of taxpayers’ money to house the country’s most vulnerable people has been handed over to suppliers who have been identified and embarrassed by the regulator, it may be revealed.
An investigation by The Independent and openDemocracy found that huge sums of housing benefits for “vacant accommodation” had been given to organizations since 2018, despite decisions or notifications from the social housing regulator (RSH).
The figures obtained under the Freedom of Information Act cover 95 of the more than 300 British local authorities, which means that the true figure is likely to be much higher.
Some heads of non-profit organizations have even used a loophole in the regulations to cash in on money, our investigation revealed.
Exempt accommodation is supported housing available to women fleeing domestic violence, those with substance abuse problems and caregivers for whom providers may request higher rates of housing compensation. In addition, providers may charge service fees to residents that are designed to cover property maintenance.
It is a thriving industry – the number of households in vacant accommodation in the UK increased from 95,149 in 2016 to 156,868 by May 2021, according to data released by the charity Crisis.
But he is also gripped by problems, with concerns expressed by charities, police and government about the quality of support available to those in vacant accommodation, as well as cases of violence and sex work on property.
According to the regulations, providers of exempt accommodation must be non-profit organizations, such as housing associations or registered charities providing “care, support or supervision”. However, our investigation revealed examples of those non-profit companies making large payments to private companies related to their own directors or founders.
Expensive cars and yachts in the Algarve
The Pivotal Homes Group was founded by husband and wife Dennis and Fiona Dixon in 1999. One part of the group, the Pivotal Housing Association, received more than £ 1 million in southwest advice from 2019 to this year on vacant accommodation. But the latest accounts of the housing association show £ 225,598 “expenses” paid to Pivotal Support Group Ltd in the year to March 2021. This company, in turn, is owned by Pivotal Group Holdings, of which Dennis Dixon is a co-owner. His wife was a director of the Pivotal Support Group from March 2005 to December 2017.
The Dixon family in a photo posted on social media
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Meanwhile, another company of which Dennis Dixon is a director and co-owner – Charles Terence Estates Ltd – was paid more than £ 400,000 in “rent” for hostels occupied by the association in 2020 and 2021. An additional £ 390,107 from the association was recharged to Charles Terence Estates for the year to March 2021, reports show.
Charles Terence Estates, meanwhile, has paid dividends of £ 12.95 million from 2018 on its total revenue, according to the company’s accounts.
In March last year, RSH reported a series of malfunctions in the Pivotal Housing Association, including that it was “unable to provide an adequate guarantee” that its accommodation met government requirements for social housing.
Noting that the housing association manages housing units in five local authorities, the regulator said: “Rents and service fees for Pivotal tenants may have been and may continue to be increased. As part of the cost of these rents has been covered by housing benefits and universal credit, it may also have implications for the public budget. “
Dennis Dixon’s Facebook post next to a Bentley photo
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The Dixon family live in the Algarve on the south coast of Portugal and social media offers a window to their luxurious lifestyle of sailing, fast cars and skydiving. Dennis Dixon’s Facebook page shows photos of the couple’s yacht, Navigo, and Bentley, which he described as “early birthday gifts” in both 2015 and 2018. In his 2015 post, he added: ” Happy birthday to me! ”
In the UK, they own a four-bed home in Poole, Dorset, valued at more than £ 1.1 million.
The daughter of Dennis and Fiona Chloe, a 28-year-old surveyor, is one of two people with “significant control” of the Pivotal Housing Association, while Fiona Dixon resigned as director on May 11, 2018. Dennis Dixon ceased to be a “significant control person.” of Pivotal Support Group in April 2019
Dennis and Fiona Dixon did not respond to requests for comment, while Pivotal said that only six of its 523 rented properties are currently owned by its co-founders, for rent, “not higher than any other property in our portfolio ”. A spokesman said the housing association did not accept “any suggestion that we have sought to use the housing benefit system in connection with vacant accommodation”.
“Destructive Innovators”
There is a similar story at Sustain (UK) Ltd, a Birmingham-based supplier. His website says his vision is that “vulnerable / homeless people deserve the opportunity to live in decent housing.”
The non-profit company received a regulatory decision in 2019 for “inherent conflicts of interest” related to transactions with companies related to its directors. However, £ 2.3 million was paid to private companies linked to two directors – Adam Barwell and founder and former CEO Pauline Hughes – in 2020 and 2021.
But despite these concerns, since 2018-19, Sustain has received £ 87.5 million in housing allowance for supported vacant accommodation and other “common needs” housing in Birmingham, separate figures show.
Hughes owns a gated property in Birmingham worth more than £ 1 million, while a six-bedroom house on two acres of land, bought for £ 900,000 in 2015, is owned by one of its companies, Topcare West Midlands Ltd. A sales brochure describes a property as a “prominent and very beautiful country house” that “offers complete peace and tranquility”.
Hughes and Barwell’s high salaries at Sustain were highlighted by Inside Housing in 2020, with the couple paying £ 215,000 each during the year until March 31, 2019. Hughes’ daughter was also hired by Sustain at one stage as director of training and development, and was appointed director in 2014, just 20 years old, before resigning in July 2019. Sustain made no statement. Hughes resigned as director last July, while Barwell left in January. None of them responded to requests for comment.
The Falcon Housing Association (FHA) – the subject of a regulatory notice last November – received £ 8.2 million in housing benefit for council-exempt accommodation from 2018 to 2021-22. Among the shortcomings, the regulator concluded: “The FHA has failed to ensure that all agreements it concludes do not improperly promote the interests of third parties or are arrangements that the regulator could reasonably consider to be for such purposes.”
Falcon’s accounts show that in the year to March 31, 2021, the company used the services of companies associated with two directors, Faisal Lalani and Jamil Mauji, in which “sales of £ 510,466 and purchases of £ 90,061” were made, adding : “At the end of the year, these companies owe £ 142,684 to Falcon Housing. Mr. Lalani resigned as director on October 4, 2021, followed by Mauji a week later on October 11.
The couple – finalists in EY’s Entrepreneur of the Year award and said they “see themselves as destructive innovators” – were also engaged with another fake supplier. Since 2018, Auckland Home Solutions has been paid £ 3.6 million of advice as housing compensation for vacant accommodation. Mr. Lalani was the Director of Auckland from October 2017 to October 2021, and Mr. Mawji from September 2017 to October 2021.
In his regulatory notice last August against Auckland, the observer said: “Our investigations also found that some of the lease agreements entered into by Auckland involved companies associated with Auckland’s directors and its shareholder. For these transactions, more than once, Auckland sought and obtained shareholder approval to resolve the reported conflict of interest and not apply the provisions in its related articles. The transactions were substantial and ongoing, and thus Auckland has imposed long-term risks on the business, for which we are not confident that they can be adequately managed under the current conditions.
Auckland, Falcon, Mr Lalani and Mr Mawji did not comment.
RSH has the power to take action against suppliers, stating on its website that it will do so if consumer standards are violated “and there is a significant risk of serious harm to tenants or potential tenants”. However, none of the above providers has encountered such an action so far.
Press to change the rules
In March, Housing Minister Eddie Hughes outlined plans to introduce minimum standards for support provided to residents and changes to housing benefit regulations to “seek to define care, support and supervision.”
He also revealed the government’s intention to give local authorities in England new powers to “better manage their local maintained housing market and ensure that fraudulent landlords cannot operate the system to the detriment of vulnerable residents and at the expense of taxpayers. ” But, he added, “any measures requiring legislation” will be introduced “when parliamentary time allows”.
A government spokesman said: “It is appalling that fraudulent landlords are using the maintained housing system to profit from housing for vulnerable people who need help to live independently.
“That’s why we recently announced our intention to introduce new laws as soon as possible to fight fraudulent landlords, protect vulnerable residents and give the councils more power to intervene.”
RSH said it had “significant concerns about the provision of exempt accommodation without commission”, but argued that regulatory communications had had an impact, with cases of providers canceling expansion plans or suspending trade.
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