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Councils given £9.5 million to crackdown on social housing fraud


Updated on 05 April 2013 | 7 Comments

Housing Minister wants to help councils weed out those that are cheating the social housing system.

Housing Minister Mark Prisk has announced a multi-million pound pot to support a council-led crackdown on social housing fraud.

The minister has reserved £9.5 million to help in the fight, which will be made available to 62 councils. You can see which councils will be getting a share and how much in this document (opens as a PDF).

Social tenants who live elsewhere and rent out their home to a third party for a profit are in the firing line. Prisk says they are denying homes to people genuinely in need and costing the taxpayer millions of pounds.

The scale of the problem

In 2012 the Audit Commission released a report called Protecting the Public Purse which revealed that around 100,000 social homes in England could be unlawfully occupied.

Currently there are about 1.8 million households that are waiting for a social house, while 250,000 existing social households are deemed to be overcrowded.

Fraudsters that live elsewhere and rent out their social home are thought to cost the taxpayer £900 million a year.

Criminal offence

At the moment social housing fraudsters risk losing little more than their tenancy if found out.

But the Government has backed a new Bill which makes sub-letting of social housing a criminal offence.

The Prevention of Social Housing fraud Act 2013 is due to come into force this summer.

The new law will mean social housing fraudsters could receive an unlimited fine and face up to two years' imprisonment, while councils will be able to take the proceeds made from sub-letting.

The law will also make it easier to detect social housing fraud, giving local authorities more powers to investigate with access to data from banks and utility companies.

Cracking down

The teams that currently hunt out the fraudsters recover more than 100 local homes a year. In some cases their work uncovers even worse cases of benefit fraud.

With the extra funding, the councils should be able to ramp up this number with better specialist investigation teams and advance data matching, bringing more housing back into the stock for people that need it.

More on housing:

The hidden costs of retirement housing

Self-build: is it getting easier to build your own home?

Bedroom tax: concessions for foster carers, the military and the disabled

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  • 07 April 2013

    The article states that the fraudsters cost the taxpayer£600m. That’s utter tosh. The taxpayers lost nothing. The rent was paid by the fraudsters - probably they are the most conscientious of payers!. But £600M represents the subsidy given to those social housing rentals compared to the market rent. Think what the total subsidy is and why it exists. The fact is that social housing is massively subsidised. Properties in London could command market rents 3-4 times the actual rent paid by the tenants. And the sole reason for them being given that subsidy is because at the time they first became a tenant they satisfied the criteria of the time. Do they satisfy the criteria now – Who knows as nobody checks!! Why are there 1.8M people on the housing waiting list (in England) – it is because the rents are ridiculously cheap compared to the market rents. Solution – Raise social housing rents to market levels. Those in need will qualify for housing benefit and have much if not all of their rent paid. Those with now good incomes will have to pay some or all of the higher rent, so the social housing operators will receive higher incomes. Those operators will then be able to go out and build more social housing. Win Win all around. And the waiting list for social housing is eradicated overnight. What any critics of this scheme should address is why there is a select group of people in social housing who deserve subsidised rents irrespective of their current circumstances (not those of years ago when the tenancy was first granted). Where I live 70% of property is owner occupied , 20% private rented and 10% social housing. What is the justification for those in social housing to pay lower rents than those in private rented accommodation. Think about what housing benefit is all about!

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  • 06 April 2013

    Margad. All tax on earnings is basically theft. It's just the same principle as when the Sheriff of Nottingham told the peasants what they must pay. He would tell them of the expenses he faced, and how they should appreciate the benefits he provided for them. Fast forward a few hundred years, and I suspect modern taxation takes much more than the 'good' Sheriff ever did. Breadwinners have a duty to their own families as well as their duty to the state and absolutely should avoid tax if they can. Tax avoidance is legaL Tax evasion is not. Tax evasion is fraud. Tax avoidance is not. Tax fraudsters should be pursued just like benefits fraudsters. In addition, your comment 'the perversion of self interest' is confusing. Self interest is normal, and not a perversion at all.

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  • 06 April 2013

    Margad should learn the difference betwen tax avoidance and tax fraud. Avoidance is making legitimate use of the tax laws in order to reduce a tax bill. (Tax) fraud is the same as any other fraud (benefit, housing, etc.) and is most common amongst those people who indulge in the latter by doing work for cash which is not declared in tax returns (if, in fact, they make them).

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