Some private companies are making huge profits and exploiting the welfare system by receiving housing benefits on behalf of residents but failing to give them the support they are required to, BBC Panorama has found.
The system — called supported exempt accommodation — is designed for people in the UK with additional needs, including former prisoners, people recovering from addiction, and women fleeing domestic abuse. It provides housing along with care, support, and supervision.
For many residents, it works well. But charities, politicians, and residents tell the BBC that parts of the system are being exploited.
The Birmingham Problem
The Department for Work and Pensions paid out £410 million for supported exempt accommodation in Birmingham alone in the last financial year. The city is the epicenter of the sector, with more than 34,000 people living in supported housing. In London, by contrast, about 22,000 live in supported housing despite its population being more than seven times larger.
Patricia Coleman-Taylor, who runs Birmingham anti-poverty charity Narthex, said many vulnerable people are being used as “cash cows to generate income” that goes from the DWP into “the back pocket of the landlords.”
Labour MP Jess Phillips, whose Birmingham constituency contains large numbers of these properties, said companies spending taxpayers’ money while providing a poor standard of support was “an absolute catastrophe.”
The Investigation
In Birmingham, BBC Panorama found vulnerable people left with little to no support in often unsuitable accommodation. One big housing provider wrote off £1.8 million because of payments to some former directors and companies they ran. There was also evidence that some are willing to make benefit claims for people who do not live in their properties — so-called “ghost tenants.”
Alysha, a survivor of domestic abuse, lived in three different supported properties, including a shared house managed by Second City Support Ltd. She said residents went eight days without heating or hot water when the boiler broke. She also received no help finding work, despite the promise of weekly support sessions.
“It’s shameful that people are being paid so much money,” Alysha said. “There’s a lot of people who are vulnerable and in need. I’m going to class it as neglect.”
The Money Trail
The registered provider of Alysha’s accommodation, Dawson Housing, was paid £443 a week in housing benefit — equivalent to £23,000 a year — for her room and support costs. Dawson Housing hired Second City Support Ltd to manage the property and deliver her support.
Separately, a sister company, Second City Housing Properties, bought and sold the house for a substantial profit. Land Registry records show it bought the property for £191,000 in 2024 and sold it a year later for £410,000.
Both Second City companies are owned by Darren Davey. Over the past three financial years, Davey has paid himself £2.9 million in dividends from his network of companies, as well as earning more than £900,000 in salary.
The Ghost Tenants
Panorama was repeatedly told about “ghost tenants” — individuals listed as residents but not actually living in properties, for whom managing agents still claim housing benefit.
A Facebook advert seen by the BBC had one man “looking for 7/8 ghost tenants in various houses of mine.” When the BBC rang the number listed, the man said he just needed Universal Credit details and National Insurance numbers. The claims would be registered to rooms in his houses but “they wouldn’t actually have to live there.”
“That’s fraud,” Phillips said. “Those people should go to prison.”
The Regulatory Failure
Five of the six largest supported housing providers in Birmingham have been deemed non-compliant with the standards set by the Regulator of Social Housing. All five are still operating and receiving hundreds of millions of pounds in housing benefit payments.
In 2023, Parliament passed a bill to strengthen regulation of the sector. It included a new licensing scheme and a “fit and proper person” test. But more than three years on, the law is stuck in government consultations and has made no practical difference.
A government spokesperson said it is “working to implement measures to raise standards and drive out the minority of poor providers taking advantage of the Housing Benefit system.”
The Bottom Line
BBC Panorama has found that private companies in Birmingham are exploiting the UK’s supported housing welfare system, receiving millions in housing benefits while failing to provide adequate support to vulnerable residents. The DWP paid £410 million for supported exempt accommodation in Birmingham alone last year. Some providers have been deemed non-compliant but continue operating. The government says it is working to raise standards, but residents say they want action, not words.
My Opinion
This is not a housing crisis. It is a money-making machine built on the backs of vulnerable people. The Department for Work and Pensions paid £410 million in Birmingham alone last year for supported housing. Some of that money went to companies that provided no support at all. Some went to landlords who claimed benefits for “ghost tenants” who never lived in their properties. And some went to directors who paid themselves millions in dividends while their residents went eight days without heat.
Jess Phillips is right. This is fraud. And the people who commit it should go to prison. But the bigger scandal is that the system allowed this to happen for years. The regulator declared five of the six largest providers in Birmingham non-compliant — and they are still operating. Parliament passed a law to fix this in 2023 — and it is still stuck in consultations. The government says it is “working to implement measures.” That is what they always say.
Alysha called it neglect. She is right. But it is not just neglect. It is theft. The taxpayers paid for support that was never delivered. The residents were promised help that never came. And the companies got rich. The only question now is whether anyone will be held accountable — or whether the next Panorama investigation will find the same thing in a different city.
