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.

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