The importance of social housing fraud

The Audit Commission reports that councils recovered nearly 1,800 homes from tenancy fraudsters in 2010-11, with a total replacement value of over £266 million.

Housing tenancy fraud could cost the public purse £900 million a year, they say. There are nearly 4m social housing properties in England, with an estimated asset value of more than £180 billion. In 2010, nearly two million families were waiting for a council house.

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 – a total of nearly £1 billion a year.

It costs around £150,000 to build one new unit of social housing, so 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.

Social housing providers may have lost control of the allocation of at least 50,000 social housing properties in England because of housing tenancy fraud. They can now take civil and criminal action.

Against this background, the Audit Commission highlights some success stories.

• Hull City Council recovered 21 properties in 2010/11 (against none reported in 2009/10)
• Bristol City Council recovered 22 properties in 2010/11 (against none)
• Wolverhampton City Council recovered 57 properties in 2010/11 (against 4)
• Basildon Borough Council recovered 12 properties in 2010/11 (against none)
• City of York Council recovered 6 properties in 2010/11 (against 1)
• Bolton Council recovered 19 properties in 2010/11 (against 3)
• Some district councils show what they can achieve even with modest resources. In 2010/11, Ashford Borough Council spent £10,000 on an initiative to tackle housing tenancy fraud. This included a whistleblowing campaign and investigation time. In the first six months of this initiative, residents referred 15 suspected cases of tenancy fraud to the Council. The Council recovered eight homes from tenancy fraud, uncovered two housing benefit frauds, one SPD fraud and one housing application fraud
• Some housing associations have also taken action. In 2010, Gallions Housing Association recovered 51 homes from fraudsters after employing a dedicated housing investigator. Before that, it typically recovered about four properties each year.

The Audit Commission suggests that

The scale of loss is such that the government and housing providers should consider what more they could do to quicken the pace of improvement, increase the number of properties recovered and make best use of the knowledge and skills of the [national specialist] MBUS team.

All social housing providers should recognise the problem of tenancy fraud and commit resources to tackling it.

So detecting social housing fraud is hugely important. Every detection gives a poor family in temporary accommodation a better life. Quite apart from that, the savings for taxpayers are huge. And finally, this criminality can now be punished.

Surely every local authority should be on the case.