A Labour MP made more than £30,000 from a taxpayer-funded housing scheme criticised by his party as a “lucrative money-spinning opportunity”.
Gurinder Singh Josan, who is the MP for Smethwick, co-owns a five-bedroom house used to accommodate vulnerable people, including drug addicts, asylum seekers and the homeless.
For six years, Birmingham city council paid £473,475 to organisations running the property, which housed more than 60 people.
Mr Josan and his family received more than £30,000, with the rest going to companies managing the property, The Telegraph understands.
The payments were made through the “exempt accommodation” system, which allows landlords to charge the taxpayer higher rents that are not subject to standard housing benefit caps.
The sector has faced sustained criticism for enabling landlords to profit from housing vulnerable people, often in poor-quality accommodation.
In 2022, Shabana Mahmood, now the Home Secretary, criticised it as a “lucrative money-spinning opportunity” for landlords.
After being approached by The Telegraph, Mr Josan said a managing agent handled the arrangement and he was taking steps to end the contract.
The MP, who was elected in 2024, has declared interests in eight properties, including five residential homes and three commercial units.
‘Landlords charge huge rents’
In 2024, Rushanara Ali, the homelessness minister at the time, told the House of Commons that the Government would take “firm action” against “the suffering caused by poor-quality supported housing where residents receive little or no support and landlords charge huge rents paid for by the taxpayer”.
Ms Ali herself resigned in August last year after reports alleged she evicted tenants and significantly raised rents on her London property.
Kevin Hollinrake, the Conservative Party chairman, said: “Last year, Labour’s homelessness minister was forced to resign after serving her own tenants with a no-fault eviction notice.
“Now we learn a different Labour MP has been personally profiting from a Government-funded scheme intended to support vulnerable people.”
The scheme also allowed Mr Josan to avoid paying for a £1,125 property licence because they are not required for supported exempt accommodation. The council confirmed that there was no Houses of Multiple Occupancy (HMO) licence in place for the address.
Mr Josan, one of Labour’s biggest landlords, initially said that the arrangement about his rental property was “new to me”, adding that he would review it and take action as appropriate.
Robert Alden, the Conservative leader of the opposition in Birmingham city council, said: “What’s most concerning is to see a Labour MP involved in providing exempt accommodation, which has such a negative impact on communities around the city.”
Sir Keir Starmer’s Government has weathered a series of property scandals since coming to power in July 2024.
Last year, The Telegraph revealed that Angela Rayner, the former deputy prime minister, had underpaid a stamp duty bill on a Brighton flat by tens of thousands of pounds.
Rachel Reeves, the Chancellor, was forced to apologise in October last year after it was reported that she had let out her South Dulwich home without a required £945 property licence.
A Private Member’s Bill backed by Bob Blackman, the Conservative MP, to close regulatory loopholes which restrict the oversight of exempt housing was passed in 2023.
The Ministry of Housing, Communities and Local Government (MHCLG) said it had implemented more stringent rules for the sector in January.
More than £359,000 paid out
Between 2020 and 2024, Concept Housing, a housing association, was responsible for Mr Josan’s house, and was paid £359,421.31 by Birmingham city council.
A regulatory judgment by the Regulator for Social Housing (RSH) in 2021 found that “high numbers” of properties run by Concept had failed inspections and that the housing association had failed to perform due diligence before rental homes were used for the vulnerable.
Mr Josan said in a statement that he had not known of any regulatory judgment, adding: “We are not aware of any property inspection failing or any issues with support provision in relation to my property.”
Dawson Housing took over the provision of exempt accommodation at the MP’s rental property between 2024 and 2026, documents provided to The Telegraph under freedom of information rules showed.
The housing association confirmed that it had been paid £114,054.29 for the provision of exempt accommodation at the house. The funding includes council tax, utilities, repairs and maintenance, as well as mandatory safety reports.
The Telegraph understands that the RSH does not have direct oversight of individual homes being used as supported exempt accommodation. But it does have overall oversight of the governance of housing associations.
Mr Josan told The Telegraph that neither he nor the members of his family responsible for his rental portfolio had any “personal or professional relationship” with Dawson Housing.
He said: “My contract in relation to this property was put in place through a managing agent. This is a long-standing arrangement that has never resulted in any complaints from any party.
“I can confirm that neither I nor any member of my family involved in managing my rental portfolio have now or have ever had any personal or professional relationship or any contractual relationship with the two companies named.
“I can confirm the rent paid to me in relation to this property is around 6 per cent of the figures quoted. I can confirm that I have taken steps to end my contract in relation to this property.”
‘We have made changes’
Ian Smart, of Concept Housing, said that since 2021, “the organisation has made substantial changes, strengthened its governance, and significantly improved how it delivers and oversees supported housing”.
He continued: “Concept plays a vital role in delivering accommodation for some of the most vulnerable adults in our communities – people who are often at high risk of homelessness without this support.”
A spokesman for Dawson Housing said it could not confirm the identity of an individual landlord but added that the property was in the process of being “offboarded”.
The spokesman added that Dawson Housing was aware of and supported the regulations which were introduced earlier this year and was committed to adhering to the rules.
There are no outstanding complaints or regulatory judgments against Dawson Housing with the RSH or the Housing Ombudsman, The Telegraph understands.
A spokesman for the MHCLG said: “We are committed to improving the regulation and quality of supported housing – and implementation of legislation began in January.
“It is crucial that we get this right to protect residents and give people the support that they need.”
Additional reporting by Sapphire Hope
Play The Telegraph’s brilliant range of Puzzles – and feel brighter every day. Train your brain and boost your mood with PlusWord, the Mini Crossword, the fearsome Killer Sudoku and even the classic Cryptic Crossword.