Housing benefit fraud

Housing benefit fraud has increased after years of falling according to an Audit Commission Report released in September 2009. In particular the study reveals that abuse of the Single Person Discount (SPD) costs councils £90million each year.

The SPD can be claimed by householders where there are no other residents aged 18 or over living at an address but the benefit is subject to abuse. Councils consider that this type of fraud restricts the capacity of social housing providers especially as waiting lists have doubled in the last six years. Illegal sub-letting of council properties is also a type of housing fraud that is impacting on the public purse. Councils attribute the increase to a two fold problem created by the recession. During tough economic times not only is there a greater propensity to commit fraud but councils also struggle to allocate sufficient resources to prevent and detect it.

The report suggests that whilst councils have already made good progress in preventing and detecting these types of frauds more will still need to be done in the future. Training and recruiting specialist staff to investigate such frauds is a cost effective strategy for councils to follow. A partial examination of high risk tenancies by three London boroughs resulted in 274 properties being returned to social use.

The audit commission also looked into other types of fraud affecting the public sector. It found that vetting temporary and permanent staff particularly for criminal convictions would lead to a reduction in those who use their jobs to perpetrate further frauds. Procurement frauds, particularly where private contractors operate cartels to drive up costs, are cited as a further burden to the taxpayer.

Source: Report entitled: Protecting the public purse – Local government fighting fraud dated September 2009.

If you have any questions regarding the issues raised in the article please contact Sarah Wallace on 0370 1500 100 or 020 7421 3883.