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Audit Commission doubles tenancy fraud estimates to nearly 100,000

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Audit Commission doubles tenancy fraud estimates to nearly 100,000

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Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

Audit Commission doubles tenancy fraud estimtates to nearly 100,000 Audit Commission doubles tenancy fraud estimtates to nearly 100,000

Up to 98,000 socially rented properties in England are being used fraudulently, according to the Audit Commission’s revised tenancy fraud figures – an increase of 48,000 from estimates made in 2009.

According to the commission’s Protecting the Public Purse ’report, tenancy fraud is now the largest area of loss in public sector fraud.

It said, however, councils were fighting back recovering 1,800 homes from tenancy fraudsters last year. Most fraud, it said, was detected in London (69%) - even though the capital only accounts for 27% of all council housing in England.

The Prevention of Social Housing Fraud Bill – currently going through Parliament – will make the subletting of social homes a criminal offence. It will also ensure profits made from the illegal activity are paid back to the landlord with those found guilty facing fines or even prison.

The Audit Commission said the department for Communities and Local Government (CLG) should consider “incentivising” social housing providers to tackle tenancy fraud and collect and publish information on properties recovered by housing associations from tenancy fraudsters.

It also recommends council partnerships with other registered providers and endorses the Chartered Institute of Housing ‘Making Best Use of Stock (MBUS)’ team, which offers advice and support in tackling tenancy fraud to providers without charge.

 David Clayton, head of the MBUS team, said: “We are pleased to see the Audit Commission has highlighted the problem of tenancy fraud. The original estimates did not reflect the true extent of the problem, which our team sees every day when talking to providers and local authorities.”

Across all areas of fraud, the commission said councils are targeting their investigative resources more efficiently and effectively, detecting more than 124,000 cases of fraud in 2011/12 totalling £179 million.

But it urges them not to drop their guard, as new frauds are emerging in areas such as Right to Buy housing discounts and schools.

Housing and council tax benefits frauds between them account for more than half of all the council fraud losses detected, valued at £117 million. Nearly £21 million of false claims for council tax discounts were detected last year.

The report also warns councils to be vigilant as they take over management of elements of the Social Fund from Jobcentre Plus in April. This Fund provides grants and loans through Local Welfare Assistance to help people facing immediate financial difficulty, and was worth £130.1 million last year – an attractive prospect for fraudsters.

Highlighting examples of fraud, it said a husband and wife used fake identities to receive a discount of £38,000 to help purchase a £125,000 property under Right to Buy legislation. They were found guilty of receiving property by deception and were given custodial sentences. The council recovered its losses and regained the property.

In another example, a fraudster claiming she was homeless - who used a false driving licence and immigration status - claimed eight years’ worth of housing benefit totalling £144,000, and received a 12 month suspended sentence for fraud. 

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