Homes England says leasing grant-funded homes for rough sleepers to BCP's company Seascape broke grant terms. £13.7m is exposed; tenancies change by 3 December.

BCP Council plans to take back direct control of homes funded for people sleeping rough or homeless, after the government’s housing agency said the way they were run broke the terms of the grants that paid for them.

About £9.3 million of capital grant and £4.4 million of revenue grant are exposed, according to a report to the council’s Cabinet on Wednesday 28 October. That is £13.7 million in all, subject to final checks.

What went wrong

The homes were bought or supported with government money from three national schemes:

  • the Rough Sleeping Accommodation Programme
  • the Next Steps Accommodation Programme
  • the Single Homelessness Accommodation Programme

The council then leased them to Seascape Homes and Property Limited, a company it wholly owns, to manage them. The leases were granted at nil value. Day-to-day management stayed with the council’s own housing team.

Homes England now says those leases count as a “disposal” under the grant rules. Seascape is not a registered social housing provider, so the exemptions do not apply. The agency has issued what the report calls “reservation of rights” letters.

If the council does not put things right, the report says, Homes England could:

  • ask for the grant to be repaid or recycled
  • withhold or cancel future grant payments
  • use other remedies under the contracts

The report says the council did not think the leases breached the grant terms when it set them up. It says “early discussions with MHCLG did not indicate that this structure was a concern”. The council found the problem through its own legal review, according to the report.

The report does not say how many homes are affected or where they are.

The fix

Cabinet was asked to approve two things:

  • ending the Seascape leases by agreement, with the homes coming back under direct council management
  • handing officers authority to finalise the details and a “remediation plan”

The council has told Homes England that every tenant will be moved onto a council flexible fixed-term tenancy, or a licence where appropriate, by 3 December 2026. A flexible fixed-term tenancy runs for a set period, with secure rights during it and a review before it ends.

The report says no money should change hands between the council and Seascape, and no stamp duty is expected. Legal, valuation, tax and tenancy costs are “being quantified”.

Finishing the surrender does not settle the matter on its own. Officers will “continue to seek written confirmation” from Homes England that no further action is needed.

What it means for you

  • If you live in one of these homes: the homes stay council-owned and the same council housing team will still manage them. Your landlord and your tenancy paperwork will change. The report says this “will be communicated clearly and in advance”, and individual cases will be looked at separately.
  • For council taxpayers: the risk is a repayment demand of up to £13.7 million, at a time when BCP is already facing a £38m budget gap next year. Nothing has been demanded yet.
  • Questions about your tenancy: contact BCP Council’s housing team through the council’s housing pages.

The decision had not been published when we checked on Thursday morning. We will add the outcome, and whether Homes England has accepted the plan, once it is on the record.

Sources