£12m A Year On Tackling Housing Benefit Fraud

The government has announced extra cash to help local authorities crack down on housing benefit fraud and error, as part of the housing announcements in the Budget. Council resources to tackle fraud and error associated with the benefit will be bolstered by an extra £12m a year. But the Office for Budget Responsibility (OBR) said the policy is likely to see “diminishing returns”. The OBR noted that housing benefit is being replaced by Universal Credit for working-age claimants but government is providing the same funding – £12m – each year, despite fewer people claiming housing benefit as a result of the switch. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/government-to-spend-12m-a-year-on-tackling-housing-benefit-fraud-65394?utm_source=Housing60&utm_medium=email&utm_content=article_link&utm_campaign=H60

Regulator Downgrades HA Hit By Criminal Fraud Worth Nearly £1m

A housing association that fell victim to criminal fraud has been downgraded for governance by the Regulator of Social Housing (RSH) after suffering a “significant financial loss”.  Red Kite Community Housing has said that the loss, which it attributed to human error, is believed by current assessments to have totalled £932,691.48. It said “all indications” were that criminals had been able to launch the fraudulent attack in August because of “a breach of an external source’s computer systems”. In its regulatory judgement, published today, the RSH downgraded the provider to G2, from G1, citing a “basic failure in [Red Kite’s] system of internal controls”. Read more on the RSH website.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/861113/Red_Kite_Community_Housing_Limited_RJ_29.01.20.pdf

Drop In Social Housing Fraud Detection

The Cabinet Office has admitted it is disappointed with the decreasing amount of fraud related to social housing that its pan-public sector National Fraud Initiative has identified over the past two years. Its just-published report on outcomes from the initiative’s data matching exercises noted a 37% drop in the number of council and housing association homes taken back from tenants who had no right to live in them, compared with the 2012-14 period. The NFI draws on a variety of work, benefits and credit data to identify potential wrong payments with the aim of chipping away at some of the £20bn-£49bn estimated to be lost to the public sector each year. The latest data indicate that in 2014-16 just £6m in social-housing fraud was spotted, compared to £27m during 2012-14. Read more on the Civil Service World website.

Town Hall Halt Right To Buy Council Home Deals

Fourteen Right to Buy deals for Camden Council homes have been halted by fraud investigators amid suspicions they were set up by people looking to cheat the system. The cases were revealed in a new report circulated at the Town Hall, which also shows that the council has seen an increase in potential fraudulent applications over the last financial year. The rise matches a trend that has seen local authorities across the country report more fraud cases than ever before, and coincides with the increased discounts made available by the government to tenants looking to buy ownership of their council homes. Read more on the Camden New Journal website.

Government Review Into Letting Agent Fraud

The Government is to review whether renters’ and landlords’ money is adequately protected from letting agent fraud or bankruptcy. They are launching a consultation on whether the Client Money Protection scheme (CMP) should become mandatory. Currently, letting agents hold money on behalf of renters and landlords for a range of reasons, including deposits, rental payments, and money for repairs. But this money is not always protected by a CMP, meaning the client could lose large sums if the letting agent goes bankrupt or commits fraud. Industry estimates letting agents currently hold approximately £2.7 billion in client funds. Read more on 24dash.

Anti-Fraud Team Stop Right To Buy Cheats

Fraudulent claims made by people trying to buy council homes under Right To Buy legislation rose in Oxford from £385k to £2.7m last year, new figures show. The city council's fraud investigation team stopped 35 applications in 2015-16, which could have cost taxpayers as much as £77,900 each. In 2014-15 officers stopped fraudulent applications worth £385,000. The scheme allows people to buy council houses for a discount which was increased in 2014 from 60% to 70%. Read more on the BBC website.

Labour Calls For Answers Over RTB Fraud Claims

Labour has tabled urgent questions and threatened to call for a National Audit Office investigation over Inside Housing’s research into Right to Buy fraud. John Healey, shadow minister for housing and planning, wrote to communities secretary Greg Clark today with nine urgent questions on the level of Right to Buy fraud. It followed a joint investigation by BBC Radio 4 and Inside Housing which revealed 16% of homes sold by 10 councils were bought by tenants on housing benefit. This does not prove fraud, but is a “red flag”, as it demonstrates someone else is covering the cost of buying the home. Read more on Inside Housing.

16% Of RTB Purchasers 'On Housing Benefit'

Around 16% of council homes sold by 10 councils under the boosted Right to Buy have been to tenants on housing benefit, raising fears of fraud. Councils responding to a joint investigation by BBC Radio 4 and Inside Housing revealed 721 sales out of a total of 4,538 were to tenants in receipt of benefit when they applied. A sale to a tenant on housing benefit does not prove fraud, but has been described as a “red flag”. This is because to gain a mortgage, someone else would have to be providing the funds. The highest percentage was in Dudley, where 243 of 651 properties – 37.3% – were sold to tenants on housing benefit. Read more on Inside Housing.

Councils Thwart Attempted Frauds amid Surge in Right to Buy Scams

Councils in London thwarted attempted frauds worth £73 million last year, amid a “surge” in scams involving Right to Buy.  Figures from the London Boroughs’ Fraud Investigators’ Group (LBFIG) show the number of cases councils dealt with fell by around 10 per cent compared with the previous year - but the value of those cases increased dramatically, climbing by 46 per cent. The capital’s 33 councils recovered 1,618 properties from fraudsters in 2014-15 - half the total recovered across the entire country. Detected cases of fraud involving Right to Buy more than doubled to 300 and the value of cases leapt by 185 per cent to almost £26 million. Analysis by the LBFIG suggests that at least three per cent of all Right to Buy applications in London are fraudulent. Read more on the Housing Excellence website.

Government Housing Benefit Fraud Fund 'Oversubscribed'

A government fund aimed at reducing fraud and error in the benefit system was nearly three times oversubscribed by councils. The Fraud and Error Reduction Incentive Scheme (FERIS), announced by George Osborne in November, offers financial rewards to local authorities who reduce housing benefit fraud and error. Earlier in the year, the DWP paid £5.4m to 328 local authorities for an initial ‘start up’ round of funding. According to DWP bulletin, a second tranche of FERIS funding received more than £8m in applications against a fund of £3m. Under the scheme each local authority has to hit a percentage reduction in fraud and error and is set a baseline to measure their performance against. Read more on Inside Housing.

Exempt Rural Communities from Right to Buy

Exempting rural communities from right to buy and cracking down on fraud could help stop vital social housing being lost according to the CIH. The organisation said exempting council houses in areas with a population of less than 3,000 people from the policy would help protect the dwindling supply of affordable homes in rural communities, which is pricing many younger people and families out. The Audit Commission estimates that instances of fraud have increased nearly five-fold since 2009/10 and now cost £12.3m a year. CIH is recommending measures to tackle right to buy fraud, including extending the time local authorities have to process applications and putting mandatory affordability checks in place. Read more on the CIH website.

Losses Due To Housing Benefit Fraud and Errors Rising

Iain Duncan Smith’s department has failed to tackle escalating losses due to fraud and error in the housing benefit system, according to a report by parliament’s spending watchdog. The DWP overpaid claimants with £1.4bn of taxpayers’ money from 2013 to 2014, the public accounts committee has said. The MPs also found that civil servants had “done nothing” to tackle underpayment, which has put thousands of claimants into hardship, they said. Ministers and senior civil servants were pointedly criticised in the report’s conclusions for failing to come up with a strategy to tackle the problem. Read more on the Guardian website.

Right to Buy Is ‘Disaster for London’

A member of the London Assembly has slammed the controversial right to buy policy as a “disaster for London” on the eve of a BBC investigation into fraud surrounding the scheme. Green Party member Darren Johnson said: “Right to buy is a disaster for London. A lot of council homes sold today will be in the hands of private landlords tomorrow. Across London, almost five thousand council homes have been lost in the past two years, with fewer than one in six replacement homes started using the receipts.” An Audit Commission report revealed there has been a 400% increase in right to buy fraud in the capital. Read more on 24dash.

DWP 'Fails To Stop Billions Being Lost Through Housing Benefit'

A group of MPs has launched a scathing attack on the DWP branding its spend on preventing housing benefit fraud and error ‘completely nonsensical’. The Public Accounts Committee (PAC) ordered the department to report back within six months ‘with a clear plan to tackle the major sources of loss on housing benefit’. Margaret Hodge, chair of the PAC, said: ‘Billions of pounds have been lost to the taxpayer as a result of the DWP’s failure to tackle housing benefit fraud and error effectively.” Download the report from the Parliament website.

Damning Report into ALMO Fraud Allegations

Weaknesses leading to alleged fraud and corruption at a social landlord were allowed to ‘fester’ due to ‘ineffective leadership’, according to a damning report published by Hounslow Council. Staff at Hounslow Homes, an ALMO, used services and funds to undertake undeclared ‘extensive private work’ on at least five properties in 2011 and 2012 and found work for friends and family members, the report states. The independent report was commissioned by Hounslow Homes, following allegations of fraud by a whistleblower. Actions within the Direct Labour Organisation led to allegations that fraud was hidden through ‘intimidation’ and the ‘skilful elevation and deployment of a siege mentality’, says the report. Read more on Inside Housing.

Councils to Receive Cash Incentives for Cutting Housing Benefit Fraud

The government will reward councils that cut housing benefit fraud with cash incentives, it has announced. In the autumn statement, the Treasury announced a package of measures designed to tackle fraud, error and debt in the welfare system. The government will establish a new ‘housing benefit fraud and error local authority incentive scheme’, under which councils will be paid financial rewards ‘worth up to £35m over the next three years’ if they reduce the amount of money lost through housing benefit fraud and error. Read more on Inside Housing.

Tenants Facing Pre-Christmas Eviction

Hundreds of people, including many who are elderly and in poor health, face being kicked out of their homes in the run up to Christmas after losing a test case – despite the judge saying they may have been the innocent victims of fraud. All the tenants affected found themselves in this situation after being persuaded several years ago to sell their homes to companies that promised they could continue living in them. Many were in dire financial straits at the time and were told that in return for selling their houses at knockdown prices they would enjoy a discounted rent for life as well as other potential benefits. But a judge at the supreme court, which has just ruled on the case, said the former owners “may have been ... the victims of a fraud which tricked them out of their homes” and added that criminal charges were pending.  Read more on the Guardian website.

Right to Buy Dupery Up 400%

England's local authorities detected £188 million in fraud over 2013/14 and - between April 2012 and March 2014 - saw the number of cases in which people tried to cheat on right to buy rise by 400%. The figure - revealed in the Audit Commission's  'Protecting the Public Purse 2014: Fighting Fraud Against Local Government’ report - is the highest annual amount ever recorded since the Commission turned the spotlight on fraud in local government 25 years ago. In 2012 the government 'reinvigorated' the right to buy scheme, including offering a significantly increased discount, which is now in excess of £100,000 in London. Read more on 24dash.

IDS Goes After Benefit Fraudsters, But What About These 3 Bigger Costs To The Taxpayer?

Iain Duncan Smith's DWP has launched a new advertising campaign encouraging people to phone a hotline if they suspect somebody they know is fraudulently claiming benefits. The government estimates that £1.1 billion is lost a year due to benefit fraud. However, there are three other issues that, from the government's own figures, are bigger problems;

·         The tax gap, charting the estimated amount of taxes unpaid thanks to evasion, avoidance, error and criminality, soared to £34 billion

·         £1.4 billion in benefit overpayments, an increase of nearly 6%

·         Unclaimed tax credits, with childless families missing out on £2.3 billion worth.

Read more on the Huffington Post website.

Council Urged To Investigate Firm Using Right to Buy To ‘Amass Property’

Westminster City Council has been urged to begin an investigation after a newspaper report apparently exposed a company's scheme to profit from the controversial right to buy scheme. An undercover reporter for the Sunday Times recorded a director of a London property firm boasting that he hopes to make enough money from buying up heavily discounted council homes under right to buy that he will "never have to work again". Nicholas Carlino, of London Investment Property Group, gleefully told the reporter that he could make huge amounts of profit from right to buy because local authorities are "massively undervaluing" their homes. Carlino is then apparently free to snap them up on the cheap and resell them for much greater prices. Now Westminster's Labour councillors have said that the company's activities may be connected to the fact that almost 20% of the borough's right to buy sales since 2012 have been to tenants on housing benefit. Read more on 24dash.