A tribunal has found in favour of two north east Councils in a landmark case centred on housing provision for vulnerable residents.
My Space Housing Solutions sought to develop two supported housing schemes in North Ormesby in 2017.
These were offered to Middlesbrough Council’s contracts and commissioning team, but were rejected as being unsuitable for all client groups including the vulnerable, elderly and disabled residents.
Although the provision was not required and the rents were deemed to be extremely high for the area, the charity pressed ahead with the scheme.
The properties were subsequently visited and found to be covered by a single member of staff who was unable to provide sufficient support to the scheme’s 38 tenants.
Middlesbrough Council joined with Sunderland City Council as both Councils were of the view that the schemes had been created to take advantage of the housing benefit scheme and should be refused outright.
On the back of this, all claims in both authorities were refused, at a saving of around £1 million to the public purse. The Bolton-based charity then appealed these decisions on behalf of their tenants.
The appeal was finally heard by a judge at Teesside Magistrates' Court in February this year.
In a judgment issued last month, the Councils’ decision to refuse housing benefit was upheld on the grounds that the all schemes were clearly set up to take advantage of the benefit system and both Councils were correct in their decision to refuse housing benefit altogether.
In addition, Middlesbrough Council’s views around the lack of support for tenants were also upheld.
The charity was also the subject of a BBC Panorama investigation in 2022 entitled The Housing Benefit Millionaire which linked My Space to property sales worth more than £120 million.
Former employees claimed the business focused on expansion at the expense of supporting some tenants, allegations denied by My Space.
Councillor Nicky Walker, Middlesbrough Council’s Executive member for Finance & Governance, said: “We had concerns about My Space Housing Solutions from the outset, and this is an excellent result which vindicates those concerns.
“Those in need of this type of accommodation have a right to expect that the appropriate support will be available to them, and that simply wasn’t the case under these schemes.
“The benefit service will always look at every supported housing scheme to ensure it meets the strict criteria for benefit to be paid. In this instance, that was clearly not the case.
“That’s why housing benefit was refused and I’m delighted that decision has been upheld by the Tribunal.
“This sends out a clear message that all claims of this nature will be thoroughly investigated to ensure both the most vulnerable residents, and substantial sums of public money are protected.”
Councillor Kevin Johnston, Sunderland City Council’s Cabinet Member for Housing, Regeneration and Business, said: “We hope that this ruling sends out a strong message to any landlords seeking to take advantage of the benefit system at the expense of some of our most vulnerable residents and the public purse.
“In the case of the My Space Housing Solutions scheme in Sunderland, it was poorly managed and not up to the standard we would expect for anyone vulnerable living in supported accommodation.
“As a result the poor support they received, they could not move on, and their journey to independent living stagnated.
“Those in need of this type of accommodation have a right to expect that the appropriate support will be available to them, and that simply wasn’t the case under this scheme in Sunderland.”