Council house fraud boom
A FIFTH of all council house tenancies may be fraudulent, according to investigators who have conducted the first largescale examination of the problem.
As many as 160,000 social housing tenants in London may be subletting their properties, making hundreds of millions in profit at the taxpayer’s expense and denying homes to people in real need.
The cheats include a councillor and a police officer.
Fraud investigators matched 27,000 tenants – the entire tenant roll of two councils and four housing associations – against mortgage and credit databases.
They found “indications of fraud” – such as the tenants having mortgages, utility bills or active credit at other addresses – in 5,300 cases.
The disclosure comes after the Government announced plans to make council tenancy cheating a criminal offence punishable by up to two years in prison.
However, ministers appeared taken aback by the potential scale of the fraud. The Government’s official estimate is that less than one per cent of tenancies, 50,000 properties in the whole country, are fraudulent.
Grant Shapps, the housing minister, said: “Surveys like this one demonstrate that the scale of tenancy fraud may be even larger than many had expected. It is completely unacceptable for housing cheats to get a home they don’t need at massively subsidised rates, only to rent it out at market rates and pocket the difference.”
There are eight million council or housing association homes in England and 1.8 million households on the waiting list.
Mr Shapps said: “Social housing fraud has become big business, ignored for far too long.”
Howard Kleinberg, of HJK Investigations, the housing fraud specialist that carried out the research, said: “If this problem was taken more seriously, it could make a significant dent in the council house waiting list. But it will never happen, because of bureaucracy and the way money is lost in the chain of officialdom.”
HJK, which works for coun- cils and housing associations, performed the “data-matching” exercise with the 27,000 tenants using legal, publicly-held databases, such as credit reference agencies and the Land Registry.
In 2,120 cases, eight per cent of the total, HJK found “red” indicators of fraud, where the registered tenant had a mortgage, bank account, active credit or utility bills at another residential address.
In 3,180 cases, 12 per cent of the total, they found “amber” indicators of fraud, active credit, bank accounts, Sky TV or utility bill records held by a person with a different surname at the tenancy address, but no such activity there by the registered tenant.
The “amber” figure excludes, as far as possible, legitimate residents with different surnames, such as live-in partners and family members from previous relationships.
Mr Kleinberg said there was also a third category of properties where the tenant could never be contacted by the council or where neighbours or maintenance men reported suspicions.
If these were included, the figure of suspect tenancies could be nearer 25 per cent in areas.
Last week, Shelina Akhtar, a councillor in the London bor- ough of Tower Hamlets, admitted subletting her housing association property as she was convicted of £1,100 in housing benefit fraud. She will be sentenced next month.
She paid a subsidised “social rent” of £400 a month, but lived in private accommodation elsewhere and charged her tenant £1,000 a month.
Miss Akhtar has refused to resign as a councillor even though her conviction was her second fraud offence.
Swan Housing, her landlord, refused to say whether it would evict her, because of “tenant confidentiality”. Miss Akhtar refused to comment.
Another cheat is a serving Metropolitan Police officer who sublet his taxpayerfunded “key-worker” flat in north London and lived with his girlfriend nearby.
Sub-letting is a civil, not a criminal offence. The only sanction is to require tenants to hand back the keys.
Around 1,800 fraudulently sublet council houses were recovered last year, though this does not include voluntary surrenders.
One investigator at a London council said: “There is a feeling in some quarters that ‘going after’ council house fraud is somehow victimising the poor, when it is actually the fraudsters who are victimising the poor.”