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 the Prevention 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 will be available to fund local authorities across England to help collect money that is rightfully owed and to prevent future fraud occurring.
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.
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.