The key to fraud detection

Martin Blow had a hunch that improving security at hundreds of Newham Homes’ flats in east London would help to detect tenancy fraud. What the performance manager at the arm’s-length management organisation wasn’t prepared for was the scale of fraud the scheme would unearth.

Door entry systems for each block were managed locally, and Newham Homes had little control over who could access its buildings. But centralising the management of key fobs for 15,000 tenants and 5,500 leaseholders would mean spending tens of thousands of pounds on new IT systems and support. On the other hand, the Audit Commission estimates that at least 50,000 social homes are illegally sub-let and that each costs local councils an average of £75,000 over three years in temporary accommodation costs, housing benefit and the cost of building new homes.

Mr Blow hoped a pilot at tower block Henniker Point, which has ongoing problems with anti-social behaviour, prostitution and drugs, would reveal enough tenancy irregularity to make a persuasive case for the new IT system. But, Mr Blow says, it wasn’t possible to carry out the project in that block as it would have meant an unjustifiable investment for a pilot. Instead, the team had to settle for Queensland House.

‘We identified blocks we knew were bad so as to find as many dodgy things as possible,’ explains Mr Blow. ‘But in the end we couldn’t choose the block we wanted, or even one in the top five. Queensland House was just a random block in pretty good condition, so we didn’t know what we’d find.’

Unexpected results

What they found was a surprise. Out of the 59 social rented flats in the block, the occupants of 28 of them did not match Newham Homes’ records. Two flats were sub-let and in nine there was an additional adult, which could affect entitlement to council tax or housing benefit allowance. In 11 there were more children than expected and in seven, joint tenants had moved out.

At the 15 leasehold flats, there were irregularities at 10. Six had private tenants that Newham Homes was unaware of, two had leased the property back to the council, one had left the property empty in preparation to rent it out, and another had let it out but was claiming council tax discount for an empty property.

Ann-Marie Bramwell, tenancy audit manager at Newham Homes, leads a six-strong team which includes two officers whose full-time role is to knock on doors around the borough.and find out who is actually living in the ALMO’s properties. ‘We weren’t expecting to find any sub-lets,’ she says. ‘We had carried out an audit within the last year, and it was known as a pretty good block.’

Last November, a month before the key fob changeover, letters were delivered to all tenants and leaseholders and posters were displayed in the block and lifts, explaining exactly what residents needed to do. A reminder notice was then hand-delivered a week before. Ms Bramwell’s team held three drop-in sessions at the block, between 8am and 9pm during the week and again on Saturday morning. The following Monday, the door code was changed and old key fobs deactivated.

At each session, tenants were asked to provide proof of both their identity and their residency which was compared with records for each flat. ‘We went round with everything we knew about who we expected to be living there, and prepared questionnaires with names, dates of birth, relationships and ethnicity, as well as housing benefit and council tax records.

‘We took a photo if we didn’t have it on file. If everything was okay, it took 10 minutes. If there were irregularities, we would ask if we could come up to the flat and speak to them more privately.’ Tenants from all but five of the flats attended the sessions.

Tony Woods is a long-standing tenant of one of the blocks next to Queensland House, and was part of a group consulted on the next phase of the project. ‘The communication with tenants was absolutely brilliant. No one could have turned round and said “I didn’t know”, and tenants had a whole week to sort themselves out.’

Secondary benefits

The tenancy fraud initiative has also brought Newham closer to its tenants, with Ms Bramwell’s team becoming a very visible presence in the blocks.

At Queensland House, the team discovered a vulnerable woman who they helped seek assistance from social services and the NHS. Norma Weir, the tenant’s daughter, says that if it hadn’t been for the key fob initiative she doesn’t think she would have been able to persuade her mother to seek help for her alcohol dependency.

‘The follow-up to that has been brilliant. They have been so supportive, we couldn’t have coped with the situation without them,’ Ms Weir says.
Key fobs will now be managed centrally, which means residents who lose keys must report directly to Newham Homes’ offices. Although it is the council that will feel the most financial benefit of the scheme, improving security at the blocks should reduce anti-social behaviour and maintenance costs, and the discovery of two illegal sub-lets during the pilot helped to justify the IT spend of between £2,000 and £4,000 per block - the Audit Commission estimates that every property recovered from unlawful occupancy saves local authorities £75,000 over three years.

The cost of the key fob swap itself is negligible as the tenancy audit team would be carrying out this work anyway in a slightly different way. The only additional cost is staff overtime for out-of-hours sessions. Ms Bramwell’s team is now rolling out the programme for around 250 units a month, and speaking to other ALMOs about developing their own schemes. She estimates it will take between three to five years to cover all of Newham’s properties (including those blocks on the ALMO’s most blighted list) .

Although Ms Bramwell knows Newham’s tenancy fraud team is larger than most, having the resources to visit tenants doesn’t necessarily achieve the same results. ‘This is forcing people to come to you and it does bring some people out of the woodwork who we might not have discovered for some time. You might not get a response from knocking on doors, so this is a quicker way of identifying what’s going on.’

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