Upper Tribunal rejects appeal in supported housing benefits test case

In FYE v Middlesbrough City Council and GPZ v Sunderland City Council, Upper Tribunal Judge Edward Jacobs found that the First-Tier Tribunal did not make any material error of law in either case.

Both cases were advanced by tenants of My Space Housing Solutions, a not-for-profit supported housing provider operating in the North West and North East of England as well as the Midlands and Wales.

The charity, which has up to 70 local authority clients, provides housing to tenants with physical or learning disabilities, mental health problems and those dealing with substance abuse.

It had applied to both Sunderland and Middlesbrough Councils for exempt housing benefit on behalf of its tenants living in its supported housing schemes in the local authorities’ areas.

Middlesbrough said that this exempt status would have led to enhanced levels of rent, which would have created significant profit.

The councils rejected the claims on the basis that the tenancy liabilities had been created to take advantage of the Housing Benefit scheme under regulation 9(1)(l) of the Housing Benefit Regulations 2006.

Tenants affected by the decisions brought proceedings in the First-tier Tribunal, which dismissed the appeals.

The cases were later appealed to the Upper Tribunal, which heard the matter in October 2025.

The core legal issue at the Upper Tribunal was whether the tenants’ liabilities had been “created to take advantage of the housing benefit scheme” under regulation 9(1)(l) of the Regulations.

In a judgment issued last month (20 April), Judge Edward Jacobs ultimately dismissed the appeal and found there had been no error of law during the earlier hearing.

Commenting on the case, Cllr Nicky Walker, Middlesbrough Council’s Executive member for Finance, said: “This has been a long-running legal process, but we’re again pleased our position has been backed in court.

“It’s vitally important that the benefits system is used properly rather than abused. Vulnerable people shouldn’t find themselves at the centre of cases like this. They just deserve the proper support by companies acting in their best interests.

“By refusing these claims and defending the position robustly in the courts, the two councils have done right by the taxpayer and saved the public purse huge sums of money.”

My Space Housing Solutions has been approached for comment.

Adam Carey