Andy Street is Mayor of the West Midlands, and is a former Managing Director of John Lewis.

Talk of ‘Levelling Up’ can be dominated by regional investment and infrastructure projects, overlooking the fact that social and community issues lie at the heart of the concept.

In this column I want to talk about a growing national problem which unfortunately has its epicentre right here in the West Midlands: the issue of Exempt Housing.

Exempt supported housing is accommodation for those with few other housing options, such as people on benefits who have additional needs – perhaps due to addictions, criminal histories, mental health issues, learning disabilities, or because they are escaping domestic violence.

About 600,000 people in the UK rely on supported housing at any one time, from care leavers needing somewhere to stay, to people with mental health problems seeking independence.

Landlords get a significant premium in extra housing benefit for each tenant they house – but are supposed to provide support and care in addition to accommodation.

Crucially, by applying for registered provider status, landlords are exempted from local licensing regulations, leaving councils powerless to act over how tenants are treated or the quality of accommodation.

It is this ability for landlords to avoid scrutiny that has led to the sector being described as the ‘Wild West’, and accusations of exploitative provision.

In recent years there has been a worrying growth of poorly managed, unsafe exempt accommodation, delivering inadequate support and safeguarding, particularly for people who experience homelessness and have multiple support needs.

We have seen a rise in unscrupulous agencies exploiting gaps in the national regulatory regime to claim higher Housing Benefit levels while providing minimal or no levels of support.

This is why the issue of exempt housing falls squarely under the remit of ‘levelling up’. We are seeing some of the most vulnerable residents accommodated in some of the poorest housing, without adequate support, trapped in unemployment – and all paid for by central government.

The exponential growth in the numbers of buildings used for this kind of accommodation is also changing the nature of neighbourhoods, much to the dismay of locals. Information published by homeless charity Crisis in October 2021 showed that nationally 153,701 households in Great Britain were housed in exempt accommodation as of May 2021. This represents a 62 per cent increase from 2016 to 2021.

Increasingly, Birmingham is being viewed as the capital of a problem which is also taking root in places like Liverpool, Bristol and Manchester.

Indeed Robert Alden, Conservative candidate in the Erdington by-election, has been a long-standing campaigner on this very issue, as the area in north Birmingham is attracting more and more exempt housing. Recently he backed residents on the Pitts Farm Estate after a family home in a cul-de-sac was turned into exempt accommodation, prompting fears that more would follow.

These fears are understandable. The fact is the number of supported housing rooms in Brum has doubled in the past three years. Some 20,000 people live in exempt accommodation in the city, while hundreds more live in the sector in other parts of the region, from Coventry to Wolverhampton.

Some experts believe the growth in Birmingham is down to the abundance of large, relatively inexpensive properties that can be easily converted into houses in multiple occupation (HMOs).

As a region, we have worked hard to develop policies and structures to improve housing. The West Midlands Combined Authority’s Homelessness Taskforce was created to ensure a unified approach between our seven constituent boroughs of Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton.

Last year Birmingham became one of five cities to be handed Government cash to pioneer ways of driving up standards, with the city using its £1.8m grant to launch new Quality Standards, a Charter of Rights to make tenants aware of the service they should expect, and increasing inspections.

Providers and landlords are urged to voluntarily sign up to the new Quality Standards, agreeing that their accommodation can be inspected to help highlight best practice.

However, this laudable scheme has no power to force landlords to get involved, and while it has received support from some providers the conspicuous absence of many more illustrates that more must be done.

Clearly, this issue needs to be tackled. That’s why I was pleased to be able to provide evidence, with the WMCA, to the Levelling Up, Housing and Communities Committee inquiry into the sector.

This is something that I feel passionate about, which is why I have been calling for this inquiry for some time. As national policies are drawn up, I know the West Midlands can provide vital insights into the impact of exempt housing.

The submission highlights what needs to be done to rectify the clear problems affecting the sector, and discourage the elements that are exploiting those who use it. So, what needs to be done?

A proper national accreditation scheme is needed for landlords, supported by additional regulation and a national database of providers’ performance. More local control is vital too. The supported housing funding model must be reviewed, providing resources for local authorities to oversee any new regulations. Finally, enforcement powers will be needed to clean up the dodgy landlords who have turned this sector into the Wild West.

This could be by strengthening the role of the Regulator for Social Housing role and its ability to effectively monitor the sector, especially where providers supply accommodation and support.

Greater enforcement powers could also tackle providers who do not effectively manage Anti-Social Behaviour, including additional Community Safety powers.

Ultimately, getting a firm grip on this issue will ensure better use of hundreds of millions of pounds of public money, at a time when all budgets are under intense pressure. If we don’t address these issues, we can expect the exponential growth of this sector to continue, and more and more communities to experience what is happening here and in other major cities.

That means more vulnerable residents trapped in some of the poorest housing. It means pressures that potentially drive-up homelessness just at the point when, post-pandemic, we are seeing genuine progress in getting people off the streets through schemes such as Housing First.

And it means more neighbourhoods seeing their character change, as landlords buy up family homes to create the HMOs that allow them to reap the benefits of a dysfunctional funding system.

Levelling Up isn’t just about railway lines and city centre regeneration, it’s about supporting communities by tackling the tough issues that have seen them left behind other more prosperous areas. Bringing to heel the unscrupulous landlords that exploit the most vulnerable in those communities is a good place to start.