Government closes the net on tenancy cheats
7 Apr 2014 03:26 PM
Over £35 million to improve
councils’ ability to identify and deal with social housing
fraud.
Housing Minister Kris Hopkins has warned tenancy
fraudsters that the net is closing in on those who con taxpayers out of money
and deny hard-working families the opportunity to live in a council
home.
Mr
Hopkins said that life was about to get much tougher for those who illegally
sublet or make false applications for social homes or for the Right to Buy,
giving councils more powers at their disposal to identify and root out tenancy
fraudsters.
The
new measures will enable councils to access information about people suspected
of tenancy fraud from banks, building societies, utility and telecommunication
companies, which could be essential in identifying and prosecuting cheats and
freeing up homes for the families that deserve them.
Across England it is estimated that 98,000 social homes
are being unlawfully occupied, with those tenancy cheats sub-letting living off
the profits elsewhere. In some inner London boroughs cases of social housing
fraud are as high 1 in 20 properties. This could be costing taxpayers as much
as £1.8 billion a year.
Fight against fraud
The
new powers are part of the wider government push to tackle fraud across local
government with over £35 million being invested to improve
councils’ ability to identify and tackle the problem.
As
part of the crackdown the government is investing £19 million to help
councils to fight against tenancy fraud. As a result councils have recovered
more than twice as many homes per year than in 2009. Today’s measures
will help them step up their efforts further.
Across the country, councils are catching more tenancy
cheats and freeing up homes:
- since 2010 166 homes in Wolverhampton have been
recovered and to people in genuine need of a home
- in
Greenwich over 200 homes have been freed up for families in 2
years
- in
Stoke 193 properties were recovered in 1 year
The
government is taking a tough stance on tenancy fraud, supporting thePrevention
of Social Housing Fraud Act, which ensures that anyone found guilty of
illegally sub-letting could face a fine and a custodial sentence of up to 2
years. Previously they faced little more than a slap on the wrist, simply
returning the keys to the property they were illegally
subletting.
Housing Minister Kris Hopkins said:
Anyone who is committing social housing fraud should
know that the net is closing in on them. These new powers will help expose the
cheats conning councils and ripping off taxpayers and free up more homes for
the families that really need them.
This government is taking the fight to fraudsters. We
have already given councils £19 million to root out tenancy fraud, more
than doubling the annual number of social homes recovered and we have made sure
that rather than getting a little rap on the knuckles these fraudsters could
face time in jail.
Local Government Minister Baroness Stowell said it was
unacceptable that local government fraud costs the country the equivalent of
the entire fire and rescue budget every year, and the money should be recovered
for front line services.
A
new £16.6 million fund is expected to fund an additional 270 government
investigators across England to help collect money that it is rightfully
owed.
Local Government Minister Baroness Stowell
said:
By
giving councils more power to identify tenancy fraudsters we are stepping up
the fight against fraud and ensuring that fairness is
restored.
We
are giving councils over £35 million in total and more powers to help
them tackle fraud because local government owes it to the decent people who are
paying up and losing out to go after those cheating the
system.
Further information
The
new power for councils came into force on 6 April and gives local authorities
the power to compel certain listed organisations to supply them, for social
housing fraud investigatory purposes, with data they hold. Very similar
arrangements are already in place for social security fraud and Council Tax
Reduction Scheme fraud.
Information may only be obtained about a person when
there are reasonable grounds for believing that this person (or a member of
their family) has committed, is committing or intends to commit and offence
listed at s7(7) of the Prevention of Social Housing Fraud Act. These offences
are illegal sub-letting, application fraud and Right to Buy/Acquire
fraud.
The
government is investing £19 million to help local authorities identify
and tackle tenancy fraud.
The
number of local authority-owned homes recovered in 2012 to 2013 was 2,642 - an
increase of 51% on the previous year and more than 2 and a half times the
number recovered in 2008 to 2009.
The Prevention
of Social Housing Fraud Act 2013 is designed to increase the deterrent
to social tenants to sub-let their homes and increase the incentive to
landlords to increase their efforts. The 3 main provisions in the
Act:
- create new criminal offences of unlawful
sub-letting
- create Unlawful Profit Orders – a mechanism
through which a court can award the social landlord the profit the tenant has
made from their unlawful sub-letting, regardless of whether or not the landlord
incurred a loss
- introduce a regulation-making power for the Secretary of
State that will enable local authorities, for social housing fraud
investigation purposes, to compel certain holders of data to supply them, on
request, with information
The
government has provided £16.6 million of funding over the next 2 years to
tackle fraud across local government. It is also initiating a project with
local government to ensure data is shared between the Single Fraud
Investigation Service and councils and ensure a joint ability to investigate
and prosecute fraudsters.