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.

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.

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.

Council Tightens Rules on Right to Buy

Sandwell Council is tightening its rules on money laundering and the sale of council homes at a discount to combat possible fraud. Council officers have been responsible for the cancellation or withdrawal of seven Right to Buy applications with an estimated value of £321,750 following investigations. And they are checking 94 sales out of 481 which have raised concerns, according to a report to the council's deputy leader Councillor Steve Eling.  There was a surge in applications two years ago after the Government raised the maximum discount on a property's value to £75,000. The Audit Commission in 2012 warned there had been a 168 per cent increase in fraudulent applications across the country. Read more on the Sandwell Council website.

Councils Making Gains against Social Housing Fraud

Councils have been making significant gains in tackling social housing fraud, such as illegally sub-let homes, the Audit Commission revealed in its latest annual assessment of how well local authorities are doing in detecting and dealing with a whole range of fraudsters.  Last year, councils recovered 2,642 homes that had been illegally sub-let; worth around the equivalent of nearly £400 million if they’d had to build the same number of properties. All told, the Government estimates that social housing fraud costs the public purse in the region of £845 million per year, but this latest successes measured by the Audit Commission represents a 51% increase in the detection of social housing fraud since 2011/12.  Read more on the Housing Excellence website.

Council Takes £2m from HRA

The Audit Commission has accused Medway Council of ignoring the advice of its external auditors by shifting £2 million from a ‘ring-fenced’ housing budget to its general fund. The Kent authority’s chief executive employed ‘special urgency’ powers in September to raid its housing revenue account, council papers from last month reveal. Such powers allow senior officials to make urgent decisions which are approved later by councillors. The £2 million raid makes Medway the fifth council to sanction such controversial transfers on the advice of consultancy Capita. The CLG is probing the ‘appropriateness’ of the move. In total, £37.5 million is now known to have been taken from council housing budgets during September before the legal ‘loophole’ pinpointed by Capita was sealed by the government on 1 October. Read more on Inside Housing.

Council Given Funds to Tackle Social Housing Fraud

Harrow Council's housing fraud team is among a group of council investigators to be awarded additional funding to tackle social housing fraud. The Government funding will be used to bolster Harrow Council's corporate fraud team and Housing Management Team so the authority can take full advantage of the new law. Harrow Council is one of the leading authorities in the country when it comes to detecting housing tenancy fraud. In 'protecting the Public Purse' 2012, the Audit Commission highlights Harrow for its outstanding work, compared to local authorities outside of London, where more than half failed to recover a single property from unlawful tenants last year.  Read more on the Harrow Council website.

Right to Buy Changes Risk Increase in Fraud

Fraudsters are targeting the government’s revitalised right to buy programme, a report from the Audit Commission has revealed.  The number of right to buy fraud cases has risen by 52 per cent in the last three years and the commission warns that the newly extended discounts pose an increased risk of fraud.  The report Protecting the public purse 2012 said that right to buy fraud is a ‘new emerging fraud’ and that although the level is currently relatively low – in 2011/12 there were 38 cases with a value of £1.2 million – the increased discount would make the scheme ‘more attractive to fraudsters’.  Download a copy of the report from the Audit Commission website.

Data Disappears As Housing No Longer Compelled To Share Information

Prior to the abolition of the Tenant Services Authority (TSA) in March 2012, landlords in England submitted reams of data to the TSA and other government agencies. But, under the coalition government's system of light-touch regulation, they are no longer required to tell anyone but their tenants how effectively they carry out repairs or levels of overall satisfaction with their service. If they neglect to provide this information to tenants, it is unclear whether anyone would ever find out.  Roger Jarman, former head of housing at the Audit Commission, is concerned the absence of standardised data means tenants can no longer compare their landlord's performance with that of other providers. "Taking away the need for organisations to collect customer satisfaction statistics is retrograde," he says. "An excessive amount of data was collected [before], but getting rid of some performance data is not helpful for users."  Read more on the Guardian website.

Council Housing – Parliamentary Written Answer

Jack Dromey: To ask the Secretary of State for Communities and Local Government what estimate he has made of how many council tenants sub-let their council homes; and what statistical basis his Department uses to make such an estimate.

Grant Shapps: The Audit Commission estimated in 2009 there were at least 50,000 unlawfully occupied social homes in England; however, it has noted:

'the need for more research to get a clearer picture of the prevalence and cost of housing tenancy fraud, particularly for the three-quarters of social housing outside London'  More recent analysis carried out by consultancy Experian Public Services suggests the figure could be more than 150,000 in practice (“Experian press release”, 12 September 2011).  Further research by housing fraud specialists, HJK Associates, has suggested that 160,000 social housing tenants in London alone may be subletting their properties (cited in The Sunday Telegraph, 22 January 2012).  We have recently consulted on proposals that would strengthen legislation around social housing fraud. A summary of responses will be published in due course.

Watchdog Criticises Lack of Action on Subletting

The government’s spending watchdog has criticised housing associations for not using a data matching system to identify homes that have been sublet unlawfully.  In its recent National Report the Audit Commission said ‘only a handful’ of housing associations are using the National fraud initiative ‘despite clear evidence that it is a powerful tool for detecting fraudulent occupation of social housing’.  Audit Commission chair Michael O’Higgins has written to the chair of the National Housing Federation and the HCA chair about the issue. The report shows the gains made as a result of the NFI. It notes social landlords have recovered 235 properties that were unlawfully occupied since 2010 through data matching, but says this would have more than doubled to 487 properties if all social landlords had joined the scheme. The report also says the NFI has resulted in 321 people being removed from housing waiting lists for false applications, and 636 prosecutions for housing benefit fraud, among other gains.  Download a copy of the report from the Audit Commission website.

Tenancy Cheats 'Costing Councils £900m a Year'

Housing tenancy fraud is costing councils in England around £900 million a year, according to National Fraud Authority (NFA).  The fraud includes unlawful subletting, succession fraud and use of false information in a housing application to gain a tenancy.  In 2011, the Audit Commission estimated that at least 50,000 properties are subject to tenancy fraud in England, providing an average cost of £18,000 to house a family or individual in temporary housing per year.  Multiplying this average cost of temporary housing with the number of properties unlawfully occupied (which would otherwise be available for occupation) the NFA estimates that housing tenancy fraud costs local authorities in England around £900 million a year.  The NFA estimates the figure is unchanged from last year's annual fraud indicator. Read more on 24dash.

Social Rented Housing – Parliamentary Written Answer

Mr Betts: To ask the Secretary of State for Communities and Local Government what estimate he has made of the cost to the public purse of social rated housing which is illegally sub-let; and how that cost is calculated.
Grant Shapps: The National Fraud Authority estimates that housing tenancy fraud in England costs around £900 million a year. This figure is based on the Audit Commission's estimates that it costs an average of £18,000 per year to house a family or individual in temporary housing and that 50,000 properties are unlawfully occupied in England (which would otherwise be available for occupation). Recent research by housing fraud specialists HJK Investigations has suggested that the level of such fraud could be far greater. Replacing the social homes that are being unlawfully occupied—to house those who have effectively been displaced by tenancy fraudsters—would cost several billion pounds.

Social Housing Fraud Costing Councils Millions

Unlawful use of social housing remains the largest category of fraud across local government despite councils' increased efforts to tackle it, a report by the Audit Commission has revealed. According to the Protecting the Public Purse report, 1,800 homes were recovered from tenancy fraudsters by councils during 2010/11. But while the number of properties being used for fraud recovered by local authorities has risen by 75 per cent in the last three years, the 'vast majority' are in London and more than half of councils with housing stock outside the capital failed to recover a single property. Housing tenancy fraud is the use of social housing by someone not entitled to occupy it. At its worst, fraudsters sub-let for profit. According to Audit Commission figures it costs at least £900 million a year but there is also an impact on families waiting for a council home. Download a copy of the report from the Audit Commission website.

Loss of Commission Could Harm Empty Homes

The scrapping of the Audit Commission will lead to fewer councils tackling empty homes, a consultant has warned. David Gibbens, policy lead at the Empty Homes Network, told attendees at the Chartered Institute of Housing Other Housing Event that the commission’s power had previously pushed authorities into action. Mr Gibbens said: ‘The abolition of the Audit Commission is a bit of a problem for tackling empty homes because a lot of local authorities only did stuff with empty homes because the Audit Commission was quite strong on empty homes. That was frightening enough to make them do things, now it’s gone there is not really anything to replace it.’ Read more on Inside Housing.

ALMO Looks Set For Chop

England’s largest ALMO is set to be axed despite achieving the best inspection results in the country. Councillors are planning to scrap Sheffield Homes, which has managed Sheffield Council’s 42,000 homes since 2004. Cabinet members agreed at a meeting that the council’s ‘preferred option’ is to move housing management in-house. The authority will now conduct a non-binding ballot of tenants and make a final decision in March. The ALMO has been awarded the maximum three-star rating from the Audit Commission three times. But the report to cabinet said an inhouse service offers scope for significant savings without affecting frontline services, and would also bring back direct responsibility between members, staff and tenants. Read more on the Sheffield City Council website.

Social Housing Fraud Costs Taxpayer £2bn A Year

Social housing tenancy fraud costs the British taxpayer more than £2 billion a year, a study has shown. Consultancy Experian analysed 125,000 lettings by 10 social landlords and found potential tenancy fraud, such as illegal subletting, non-occupation, or submission of false information, applied to 3.1 per cent of social properties. If these figures are extrapolated across the UK there would be 157,077 social housing properties fraudulently occupied. This is three times the 50,000 figure estimated by the Audit Commission in 2009. If all these properties were fraudulently occupied and made available to people in temporary accommodation, the reduced cost to the taxpayer would be more than £2 billion a year, Experian estimated. Read more on Inside Housing.

Audit Commission to Outsource Audit Practice Next Year

The Audit Commission will outsource all its in-house local public audit work to the private sector in the next financial year, Communities Secretary Eric Pickles has announced. Ministers have determined this approach should offer the best value for money. This follows the decision to disband the Audit Commission last year which will refocus audit on helping local people hold their councils to account for local spending decisions. The Commission has already been asked to begin substantive preparations for outsourcing. The contracts, which start from 2012-13, are expected to run for three or five years giving local councils and other public bodies the time to plan for appointing their own auditors. A fair and competitive procurement process will be run that would give suitable private sector bidders the chance to compete for the Commission's audit work in a way that gives taxpayers best value for money. This option would also allow for the possibility of a bid on behalf of the staff of the Audit Commission which could then form the basis for an employee owned company. Read more on the CLG website.

TSA Sets Out Inspection Role

The Tenant Services Authority has rejected all of the Audit Commission’s suggestions on how social landlords should be policed. The commission urged the regulator in a consultation response to check a ‘core set of areas’ during inspections, publish all reports alongside recommendations, and involve tenants. The commission’s response brand-ed the TSA’s proposals for regulation as inadequate and unfeasible. But the TSA’s summary of responses reveals that 34 out of 39 written submissions were ‘broadly or strongly supportive’ of its approach. Read more on Inside Housing.

TSA: Inspection Fears

Concerns have been raised about the effectiveness of regulator the Tenant Services Authority (TSA) after it emerged the body has only requested 10 inspections of social landlords since it took on responsibility for overseeing housing in April 2010. The previous regulator, the Audit Commission, typically ordered 140 inspections every year. The TSA has been under increased financial pressure after it emerged the communities and local government department had cut its budget by 40% to £17million, ahead of its absorption into the Homes and Communities Agency early next year.