Tuesday, 07 July 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.’

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