18 Dec 2014

Derby reveals housing benefit shambles

More social housing shambles, this time from Derby.

Shock figures show that errors and fraud have led to housing benefit worth more than £8 million being wrongly paid to people in Derby since April 2012.

And the city council is struggling to get it all back from claimants, revealing there is more than £3 million outstanding.

A huge £1.2 million of the overpayments were forked out as a result of errors from council staff or administrative delays, with the rest down to fraud and claimant mistakes.

Housing benefit fraud and error is a national problem, with figures for overpayments standing at £1.4 billion in 2013-14, according to the National Audit Office.

The percentage of spending on this benefit which is being overpaid in Derby is lower than the national average.

The position in the city has been described as "totally unacceptable" by the council's Conservative opposition leader, Philip Hickson. He said: "Clearly, there is something going wrong if we've got that kind of error rate."

Councillor Baggy Shanker, spokesman for Derby's ruling Labour group, said: "We try to ensure people's claims are dealt with promptly because families are suffering. Where things have gone wrong, we will investigate and ensure things are put right and claims are dealt with promptly and accurately."

Dia Chakravarty, political director at the TaxPayers' Alliance, said the level of council error was "incredible". She said: "These payments are a tragedy as, not only do they leave hard-pressed taxpayers out of pocket, but they take away precious resources from those truly in need."

In Derby, the remainder of the £8 million-plus is made up of £1.3 million due to fraud and £5.8 million because of claimants making errors with their applications.

Just maybe some of the "errors" are fraud?

Council benefits chief John Massey said the council "strives to improve processes wherever we can". He added: "We make every effort to ensure claims and changes are processed as quickly as possible and awards to customers are correct."

Reasons for the council having been unable to get the £3 million-plus back include people struggling to repay, so they do so over several years, and claimants having their benefits suspended or cancelled.

Mr Massey said other reasons included people "absconding so money is irrecoverable", and refusing to pay. He said the council sometimes did not process a change, which reduced the amount of housing benefit someone was entitled to, as soon as it received the details.

Derby has seen the number of staff employed to process new claims drop from 36 full-time equivalent posts in April 2012 to 35.2 today.

A decision on whether or not a housing benefits claimant has made an honest mistake on their application form or committed fraud is only made after a full investigation.

The city council said the claimant would be interviewed and evidence gathered.

If someone is found to have committed fraud, any weekly deduction of benefits to make up the overpayment would be higher. The council will only turn to “collection agents” to get back money as a last resort.

The council administers housing benefits on behalf of the Department for Work and Pensions, which reimburses it using public money. But the authority says that amount does not cover the total cost of housing benefit in the city.

A DWP spokesman said: "Money lost through fraud and error is falling overall. Last month, we brought in a new system that will check all housing benefit claims against up-to-the-minute information on earnings and pension income."

He said the introduction of Universal Credit, which means people will get one instead of multiple payments for different benefits, would massively reduce opportunities for fraud and error.


Illegal sub-letting of social housing is a wicked crime. It's not just the (considerable amount of) money - people and families who need a home are being deprived of it.

This cheat didn't prosper

A Kensington doctor, who pleaded guilty to charges under the Fraud Act 2006 after he sublet his council home for profit, has been given a community order of 135 hours unpaid work and ordered to pay full costs of £7,613.75 at £650 a month at Isleworth Crown Court.

At an earlier hearing on 11 November, at the same court, Dr Babiker Babiker, 40, formerly of Bramley House, Kensington, W10, admitted to making a monetary gain by subletting the property.

Dr Babiker had applied to buy his council flat under the Right to Buy scheme which would have given him up to a £75,000 discount off its market value. However, during the valuation process concerns were raised that Dr Babiker and his family were not using the property as their main and principal home. These concerns were relayed to the Council’s Fraud Investigation Team which then carried out a thorough investigation which established that Dr Babiker had in fact sublet the flat to another family while he and his family were living in North Wales.

At the original hearing His Honour Judge Dugdale commented that council homes were a limited resource let at a reduced rate.

During the sentencing hearing on 15 December Dr Babiker said he was trying to help the sub-tenant, who needed somewhere to live. Judge Reid, sentencing, said that Babiker had shown no remorse and described his actions as a “piece of thoroughly dishonest behaviour.”

Speaking after sentence was passed Councillor Rock Feilding-Mellen, Deputy Leader of the Royal Borough of Kensington and Chelsea and Cabinet Member for Housing, said:
The pressure on social housing in London is acute. It is totally wrong therefore that a Council tenant, who receives such a scarce resource, should then seek to profit by renting it to another family while living elsewhere. I am very pleased that the court has taken such a dim view of Dr Babiker’s actions. I want to thank the Council officers who, when alerted to possible wrong doing, investigated this case. We will always be vigilant to possible housing fraud and take all steps to ensure it is punished.
The Tenant Management Organisation for the Royal Borough of Kensington and Chelsea has now repossessed the property.

17 Dec 2014

Huge amounts of social housing fraud in Redbridge

A series of investigations into housing fraud have culminated in a number of properties being recovered by Redbridge council.

The crackdown has saved it £702,000 in the last 12 months, according to the authority.

To date, fraud estimated to cost in excess of £1.3m has been prevented and 850 housing cases have been referred for review.

The council has recovered thirty nine properties, with Roding ward seeing the highest number of tenancy agreements being breached, after they were found to be illegally sub-let.

Seven homes under the Right to Buy scheme have been taken off the market after it was found the tenants were not living there and were sub-letting them.

The investigations have also led to the discovery of almost £90,000 in benefit fraud and council tax evasion.


Is the scale of this a London problem?

Social housing fraud is the most wicked form of welfare fraud. The sums that can be saved are huge, but it's so much more than the money - needy families are being deprived of the chance to have a settled home that suits their needs.

Wolverhampton reports benefit fraud totals

Convicted benefits cheats illegally claimed more than £300,000 in Wolverhampton in the past year. (h/t Dave)

Wolverhampton City Council made a total of 77 benefit fraud sanctions between April 1, 2013 and March 31, 2014, resulting in a total of 53 prosecutions.

The most common sentence was unpaid work in the community, totalling 1,350 hours. There were also seven curfew orders, which restrict people to their home during the evening and night time. One person was sentenced to prison for 18 months and a further 11 people with prison sentences of three weeks to 12 months suspended for between 12 and 24 months.

Councillor Andrew Johnson, the authority's finance boss, said: "Appropriate action is taken to recover these overpayments wherever possible. A significant proportion of the 77 sanctions last year resulted in a prosecution. This was mainly due to the high value of the overpayments. Large overpayments also usually reflect longer periods of fraud, which can demonstrate a determined failure to apply for benefit truthfully, or to report changes in circumstances promptly."

There are three sanction types considered for benefit fraud offences in addition to the action taken to recover any overpaid benefit.

Cautions by the council are offered to people as an alternative to prosecution. If a caution is refused, prosecution is then considered. This sanction is typically given for smaller offences committed by first-time offenders who have cooperated in the investigation.

Administrative penalties are also offered. Cheats are asked to pay a fine of 30% or 50% of the overpayment on top of the recovery and they have 14 or 28 days to consider the offer before prosecution is sought.

Note - prosecutions can often produce lower penalties than this.

A criminal prosecution is the strongest sanction. This sanction typically applies to larger offences or a very small number committed by repeat offenders. This deterrent includes a criminal record for those found guilty.

On a national level, it is estimated that £2 billion is lost every year through benefit fraud. This equates to £70 a year for every taxpayer.

Joint investigations are carried out with the DWP and neighbouring councils and can often involve the police, immigration service, customs and excise and the Inland Revenue.

There are also Data Matching Exercises, which are conducted by the Housing Benefit Matching Service (HBMS) and the Audit Commission’s National Fraud Initiative (NFI), who cross-reference information held by public authorities and a number of private companies. Any conflicting data is then referred to the relevant authority to investigate.


16 Dec 2014

Cornwall starts to catch up with illegal sub-letting

Only last month we wrote that news of keys amnesties had filtered through to Cornwall. Now someone there has admitted illegal sub-letting. In the tradition of Cornwall, though, she was given a conditional discharge.

In a first for Cornwall, a woman has been convicted of tenancy fraud for illegally moving out of and then subletting a council house.

Wendy Snowdon (42) formerly of Kinsman Estate, Bodmin pleaded guilty to one count of tenancy fraud.

In a prosecution led by Cornwall Council on behalf of Cornwall Housing Ltd, Miss Snowden admitted that she moved out of the property and sublet it without the landlord’s (Cornwall Housing Limited) consent in breach of an express term of the tenancy, knowing that such conduct amounted to a breach of a term of the tenancy.

The action was taken under new 'Prevention of Social Housing Fraud Act legislation'.

Miss Snowdon was given 12 month conditional discharge and was ordered to pay Cornwall Council’s full investigation and legal costs of £1,322.90 and a £15 victim surcharge.

Cornwall Council’s corporate fraud team and Cornwall Housing Ltd have been working in partnership since August 2014 to tackle tenancy fraud and have recently announced that there will be key amnesty in January and February 2015 to give those who are abusing the system the opportunity to come clean and avoid possible prosecution.

Joyce Duffin, Cornwall Council cabinet member for housing and environment, said: “It costs on average £18,000 a year to house a family in temporary accommodation. There is huge pressure on the supply of social housing making it imperative that the housing we do have available goes to people in genuine need of help. It’s totally wrong for people not to be living in housing intended for them and to be potentially illegally profiting from it at the same time.”

Jane Barlow, Managing Director of Cornwall Housing said: “Cornwall Housing has been working in partnership with Cornwall Council’s experienced Corporate Fraud Team and three homes have already been identified that we believe have been illegally sub-let.

"This prosecution shows that this type of activity will not be tolerated by Cornwall Housing Ltd.

"We have announced that we will be running a key amnesty in January and February 2015 as we have seen evidence of how introducing a key amnesty has worked well in other parts of the country. By bringing the issue to the public’s attention, other authorities saw an increase in referrals to its tenancy fraud hotline and we hope to see the same results here as we know that the overwhelming majority of residents live in their homes legally and that they share our commitment to tackling tenancy fraud.

"I would also encourage anyone who suspects someone of committing tenancy fraud to get in touch.”


15 Dec 2014

Houseowner benefit thief sent money to Pakistan

A benefits cheat smuggled the stolen cash to his family overseas to help pay off ‘gambling debts’. (h/t A Reader)

Jhan Zaib fleeced £17,351 from the system by claiming he was an unemployed single dad on the breadline. In reality, the father-of-three was married and had a regular job at an Oldham tyre firm.

Investigators from the DWP learned that Zaib was sending the money abroad using electronic money transfer services. He claimed following his arrest that the money was used to pay his brother’s gambling debts after his parents came under pressure from gangsters in Pakistan.

Zaib, who owns his own home at Stafford Street, Oldham, was spared jail after a Manchester Crown Court judge said locking him away for a short period of time would not benefit the public.

The 37-year-old, who has no previous convictions, has so far paid back £1,600 of the money he took and would have been entitled to some benefits legitimately if he had come clean.

He "owns his own house", remember.

The court also heard Zaib’s claims for council tax, housing benefit and income support were genuine at the beginning.

When Zaib first started claiming in 2008, his marriage had broken down, he was out of work and looking after his daughter.

But he failed to tell the authorities when he remarried months later and got a job, going on to have two more children.

Our reader comments: "It's easy to forget a new wife, new job and new kids".

When his accounts were investigated by the DWP last year, they found he was getting wages from Hollinwood Tyre and Exhaust Centre and that he had been cheating the system for four and a half years.

He went on to admit failing to disclose a change in circumstances.

Had Zaib not pleaded guilty, he could have been given six months in jail. But with the significant discount for his guilty plea, the judge concluded it wasn’t worth locking him away. Ordering him to serve a four-month sentence, suspended for a year, with 200 hours of unpaid work.

Judge Martin Rudland said: “It doesn’t seem to me, having regard to your age, circumstances and previous good character, that the public interest is served by you immediately losing your liberty.”

Grainy picture

Tax credit thief mother escapes jail

A mother has been spared jail after she cheated the taxpayer out of more than £30,000 by lying about her income and personal circumstances.

Beautician Rebecca Eddishaw was given a chance after a court heard the likely effect of prison would be considerable on her five-year-old daughter.

Thirty-year-old Eddishaw, of Spring Court, Farnsfield, failed to tell HMRC that she had income from renting out two properties in Arnold when claiming tax credits.

Between 2009 and 2013, she collected a higher rate of tax credit and was overpaid by almost £16,941. In addition, she failed to declare any earnings from her properties, meaning she avoided paying more than £13,797 in tax.

Eddishaw was handed an 18-month prison sentence, suspended for 18 months, at Nottingham Crown Court after pleading guilty to three charges at an earlier hearing. She was also ordered to carry out 150 hours of unpaid work.

A proceeds of crime investigation will be mentioned at court on June 23 next year.

Sentencing, Judge Michael Stokes QC told Eddishaw, who was of positive previous good character, that it was sustained fraud over five years.

"The sole reason I am suspending this sentence is because you are the single carer of your five-year-old daughter."


11 Dec 2014

"We rely on anonymous referrals from the general public"

A benefits cheat who dishonestly siphoned off almost £12,000 from the public purse has been handed a suspended jail sentence and ordered to pay the money back. (h/t Dave)

Tracy Miller, of Pilsley, near Chatsworth, was overpaid £11,819 between May 2011 and October 14 2013 by Derbyshire Dales District Council after she dishonestly claimed housing and council tax benefit.

The 43–year–old pleaded guilty at Chesterfield magistrates’ court to eight charges of making false representations in two separate benefit claim forms and dishonestly failing to declare changes to her circumstances.

She declared in an initial claim form for housing and council tax benefit submitted in May 2011 that she was single with one dependent child and did not own or jointly own any property.

Miller submitted a change of address form in January 2012 and again declared she was single.

Following an anonymous tip–off that she was married, the district council carried out surveillance and discovered she had lived with a partner since the start of the claim and had married in September 2012.

In addition, Miller jointly owned a property with an ex–husband and had received almost £26,000 from the sale proceeds.

The authority also found that her latest job generated a significantly higher income than the one she had declared to them.

Miller was given a 16–week jail sentence, suspended for two years, and ordered to undertake 100 hours of unpaid community work. She was also ordered to repay the benefits money and £765 court costs. She is now paying the cash back to the authority at a rate of £75 a month.

Commenting after the sentencing, a Derbyshire Dales District Council spokesman said: “The district council adopts a zero tolerance policy to benefit fraud because it is not a victimless crime – benefit thieves take money intended for the most vulnerable in our society.

We rely on anonymous referrals from the general public to enable our staff to successfully investigate and bring those guilty of offences to justice.


Benefit thief keeps her primary teaching job

Only in Wales...?

A Llanelli teacher who helped her son fiddle £11,000 in benefits by pretending he was job hunting in Britain — while he was on an exotic 18-month tour of the Far East — will be allowed to continue teaching. (h/t Dave)

Sybil Lloyd filled in a benefits form — and sent them abroad for son Tom Clancey, aged 36, to sign on his extended holiday around the hotspots of Thailand, Vietnam and Cambodia.

She was convicted in Swansea Magistrates' Court in 2009, but the case was only heard by the General Teaching Council for Wales in Cardiff this week.

At the disciplinary hearing, the panel was told Ms Lloyd, who taught in a Gorseinon Primary School at the time, transferred the benefits cash abroad so her son could carry on holidaying at British taxpayers' expenses.

Clancey was paid £11,268 in housing benefit, council tax, disability allowance and income support during his 18-month Far East trip which took in taking tropical beaches and exotic rainforests.

He even got married while he was abroad.

Mother-of-three Lloyd, who at the time lived in Pentre Nicklaus Village in Llanelli, was convicted of three offences after pleading guilty to allowing or causing her son to fail to give prompt notification of a chance in circumstances and told to pay £840 in fines and court costs.

She received an official reprimand from the General Teaching Council for Wales on Monday but was not struck off after admitting her three convictions had an impact on her fitness to teach.

Presenting officer Huw Roberts said: "Teachers are role models to pupils and the public needs to have confidence in the teaching profession."

Ms Lloyd has repaid all the money in full.

She did not attend the hearing but in a written statement, Lloyd said: "I lost my good name and suffered extreme humiliation. I do my best for the children I teach."

The hearing in Cardiff was told she repaid "every penny that was over- claimed".

Lloyd had been teaching for 23 years. Hearing chair woman Sheila Drayton said: "Teachers are expected to adhere to the law. Ms Lloyd did not adhere to lawful standards of behaviour and did not conduct herself in a manner so as to uphold public trust and confidence in the teaching profession.

"She has expressed genuine regret and remorse and repaid the money in full.

"The offences took place outside school and there is no evidence that her behaviour has adversely affected pupils."

So it's fine for a burglar to teach your children, as long as it wasn't the school premises they burgled.

Clancey, of Loughor, Swansea, admitted failing to inform the authorities of a change in circumstance while he was out of the country. He was given a 12-month community order after he returned to Britain.


10 Dec 2014

Osborne accused of discouraging marriage

Following recent tax changes, a mother of one with a part-time job bringing in £5,000 a year would be £7,295 a year worse off if the child’s father lived with them, an increase of £70 in the notional penalty, according to the Marriage Foundation think-tank.

This is the problem with trying to help single people more than couples ... it creates an incentive for people not to live together ... or to say that they don't.

In reality, suggests the Foundation, around a quarter of a million couples simply pretend to live apart to avoid losing thousands of pounds in state support.

That's a lot of fraud - caused by the government's perverse incentives.

You can understand the state's wish to help the disadvantaged. But that creates an incentive for people to claim that they're disadvantaged in order to claim more money.

Maybe the margin of benefits between single people and couples has to be reduced.