Social housing fraud revisited

Housing is in the news this week. Tony McNulty has been revealed claiming second home allowance for a house where his parents live. Yes, he is the minister who presides over benefit fraud of £2bn a year.

A BBC report shows how his government's control of social housing is in disarray. They whack out taxpayers' money without knowing how much of it is leaking away. Just as with blue badges, fraud is almost unchecked.

Jonathan Maitland on Sunday concentrated on social housing fraud, where cheap social housing is fraudulently sub-let, usually at a profit. In some inner city areas people can make more than £12,000 a year from subletting, he says - money rarely declared to the Inland Revenue.

He picks up the role of the National Fraud Initiative, which in 2006 and 2007 only led to 75 properties being recovered, all of them in England.

A Freedom Of Information request to London councils alone showed they had recovered more than 560 properties from illegal tenants in the last year.

The NFI - carried out by the Audit Commission and which also covers Wales and Scotland - cannot highlight cases where someone might be registered to only one council house but is actually living with a friend or relative while renting out the property to make a profit.

And only 49 of the several thousand housing associations in the UK took part in the exercise.

Experts say illegal subletting doesn't seem to be a problem in Wales or Scotland - but say there is evidence of this fraud, albeit it on a smaller scale, going on in south-west England, the Midlands and Northern Ireland.

He points out there are more than 70,000 people currently in desperate need of housing, more than two thirds of them in London. It is thought two million people could be on English housing waiting lists by 2011. The Audit Commission argues that every property recovered from unlawful occupancy saves a local authority or housing association £75,000.

Experts estimate that 5% of social housing properties in inner city areas could be being unlawfully sublet.

With a stock of more than 750,000 in the capital alone, a huge amount of money is at stake.

Southwark, he reports, has a dedicated team of housing investigators specially trained to interview suspected tenancy fraudsters and find evidence using various data. Between them they recover more than 100 properties per year, saving hundreds of thousands of pounds.

If London authorities can recover more than 560 homes each year, how much is social housing fraud in total?

And where are the prosecutions?