Tuesday, 03 March 2015

Housing scams are largest frauds against councils

Social housing tenancy fraud could be costing councils at least £900 million a year while 1,800 homes have been taken back from cheats, a report shows.

The Audit Commission released findings from its annual survey of detected frauds against councils which showed that housing tenancy fraud was the largest category of fraud loss across all local government.

According to the report, the cost of housing homeless families in temporary accommodation was nearly £1 billion–a-year.

It said the NFA estimated the cost of social housing fraud to be £900 million.

Despite the large sums, the report showed that councils have increased the recovery of properties by 75 per cent in the last three years, but the vast majority of these were in London.

Over half of councils outside London with housing stock failed to recover a single property.

Data in the report – Protecting the Public Purse – also shows that there were more detected cases of housing benefit and council tax fraud than any other type.

The commission discovered that in 2010/11 there were 59,000 cases of housing or council tax fraud detected with a value of £110 million.

This was down on numbers but up on value from last year which had 63,000 cases with a value of £99 million.

Michael O’Higgins, chairman of the Audit Commission, said: ‘Councils are certainly acting on fraud, and it is now firmly on the government agenda. But our latest survey of detection rates shows that we may be seeing just the tip of a very large iceberg.’

‘Our research shows high rates of council tax discount fraud and widespread unlawful occupancy of council houses.’     

The commission called on councils, registered providers and the Communities and Local Government department to work together and do more to tackle housing fraud.

Mr O’Higgins said: ‘It is heartening to see councils making inroads, and improving detection rates in areas like council tax discounts. But they need to do more to tackle housing tenancy and procurement frauds.

‘Huge amounts of public money are still being diverted from the public purse into fraudsters’ pockets.’

Readers' comments (3)

  • F451

    Shouldn't that be down in numbers but up in value IH?

    What was the split between housing and council tax fraud - lumping the two together like that could suggest that a picture is trying to be presented that may not be accurate, and I'm sure IH would not wish to perpetuate falsehoods.

    It would also be interesting to learn how from the combined with council tax fuigure of £110Million a projected £900Million social housing fraud level is estimated.

    The real statistic in the bunch though, 1,800 homes recovered, must be applauded - yet where are the reports of what happended to those fraudsters - what was their background - how many were allowed to keep their ill-gotten gains in return for giving up the unlawfully gained tenancy - what action was taken against the officers who permitted such lettings.

    Mr O'Higgins appears to point to the detail that the large share of the fraud was not tenancy but vacant private homes.

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  • "Social housing tenancy fraud is costing the sector up to £900m a year." - I'm always very suspicious of these type of comments so I went to the source of this information - the Audit Commission and their report 'Protecting the Public Purse 2011'.

    So how did the Audit Commission come up with a figure of £900 million, here is what they said: "We assumed a 2.5 per cent level of tenancy fraud in London and 1 per cent in the rest of the country."

    So what did they base this assumption on. Apparently two things:
    1) Housing Professionals told them they thought unlawful subletting could be as high as 5 per cent of the social housing stock in London and other Metropolitan areas.
    2) Data they have collected on actual proven tenancy fraud.

    So one part of this analysis is based on guess work from Housing Professionals! The second part is on actual data - oh good we have something to go on then. Now what does this actual data show, London has the highest level of proven tenancy fraud and this is 0.306 per cent. The overall average is 0.1 per cent. Hmm so how on earth did we get to 2.5 per cent for London and 1 per cent for other major cities. Frankly I have no idea, as far as I can see its pure guesswork.

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  • Oh I forgot to add, Michael O'Higgins states that their research: "shows widespread unlawful occupancy of council houses." Well if 0.1 per cent average is widespread then I now realise why the Audit Commission is being abolished.

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