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A survey by the Audit Commission on efforts by councils to tackle fraud suggests some progress is being made.

The report says:

In 2008/09, we reported that councils recovered nearly 1,000 properties from fraudsters. In 2009/10, almost 1,600 properties were recovered and in 2010/11, councils recovered about 1,800 properties. The vast majority of these properties were recovered by London councils.

The Audit Commission estimates that 50,000 social housing properties are illegally occupied about 1%. They could probably add a nought at the end. Experian estimate it is 160,000 but acknowledge that that is a conservative figure.

The report says:

Where councils do not have enough social housing, they place homeless families in temporary accommodation. Nationally, it costs councils on average £18,000 a year for each of the families they place in temporary accommodation. The total cost to the public purse of housing these families is nearly £1 billion each year. The NFA estimates that social housing fraud costs the public purse at least £900 million each year. This is the single largest category of fraud loss across local government.



In PPP 2010, we estimated that it costs around £150,000 to build just one new unit of social housing.

Social housing fraud is the largest category of fraud loss across local government

Tackling housing tenancy fraud is one of the most cost-effective means of making social housing properties available to match the demand from those in genuine need. It also reduces the significant
financial loss to the public purse caused by this fraud.

Recovering wrongfully occupied properties frees up homes for those in genuine need.

The case studies were interesting:

Case study 1

Housing tenancy fraud

Use of civil action to recover unlawful profit Housing officers discovered that a tenant was offering one of the council’s homes for rent through a local letting agency. The council was charging about £50 a week rent for the property. The officers visited the address and found the tenant was unlawfully subletting the property to a subtenant. He was charging the subtenant £300 a week rent. The council took civil action against the tenant. The court ordered him to pay £7,000 to the council. This included around £3,000 for unjust enrichment from the unlawful profit made by subletting the property.
 
Case study 2

Housing tenancy fraud

Use of the Fraud Act to prosecute tenancy fraud Acting on information received about a suspected housing benefit fraud, one London council also uncovered a case of housing tenancy fraud. The tenant claimed to be unemployed and living alone in a housing association property. She was actually employed at a school and lived in, and jointly owned, a separate property elsewhere. Interviewed under caution, the tenant admitted unlawfully subletting the housing association property for profit and committing several benefit-related frauds.

The tenant pleaded guilty in court to several benefit offences totalling £25,000. The tenant also pleaded guilty to the offence (under Section 3 Fraud Act) of failing to disclose information and subletting the housing association property. The court sentenced the tenant to three months imprisonment, suspended for two years, with a requirement to undertake 150 hours of work in the community. The court also placed a restraining order on the property jointly owned by the tenant. The council and police are pursuing confiscation proceedings.

The civil penalties in the first case study are pretty pathetic, aren't they? The culprit only needed to have been getting away with it for nine months to still be quids in – even though he was caught.

5 comments for: 1,800 Council homes recovered from fraudsters last year

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