Case Studies

London fraud effort

by Mark Rowe

What three London councils term a new phase in the fight against fraud sees a month-long fraud awareness campaign to target fraudsters in Hammersmith and Fulham, the Royal Borough of Kensington and Chelsea and Westminster.

A campaign will focus on all types of fraud affecting local authorities, including housing benefit fraud, blue badge fraud, council tax fraud and housing fraud.

Fraud investigators from the Royal Borough of Kensington and Chelsea and Westminster City Council will work with the Peabody Housing Association, which manages about 4500 properties in west London, to increase awareness of tenancy fraud which is reckoned to cost the taxpayer about £900m a year.

Peabody, like many other housing associations, does not have a dedicated fraud unit. Anti-fraud investigators from the Royal Borough and Westminster will share data and resources with Peabody to investigate suspected fraud. Any properties which are recovered as a result of successful investigations will be allocated to the councils to be re-let to people on housing waiting lists.

Launching the fraud awareness month with the support of the National Fraud Authority (NFA), the Department for Communities and Local Government and the Peabody Housing Association, the three councils announced an Action Fraud hotline 0300 123 2040 that will be linked to the National Fraud Agency’s reporting centre.
Fraud against one section of a council, such as tenancy fraud, is often linked to other types of fraud, so the three councils will pass on any leads to the National Fraud Intelligence Bureau (NFIB) which is overseen by the City of London Police.

This is the first time that local authorities will have used the Action Fraud hotline and the NFIB in this way.

Speaking at the launch, the Leader of the Royal Borough of Kensington and Chelsea, Cllr Sir Merrick Cockell, said: “Fraud is a crime that we are all increasingly exposed to. We in the public sector take the issue of fraud very seriously. Every penny stolen by fraudsters is a penny less that we can spend on front line services to protect the most vulnerable in our society. That is why I welcome the launch of this fraud awareness month to draw the public’s attention to these issues, raise awareness among our own staff and to collectively share vital intelligence and information to help us to better prevent and detect fraud.”

Deputy Leader of Hammersmith and Fulham Council and Cabinet Member for Residents’ Services Greg Smith said: “We are always looking at new and innovative ways of tackling housing tenancy fraud and catching benefit cheats, who steal millions of pounds every year, direct from decent taxpayers’ pockets. As this hotline links up the councils and the National Fraud Agency from the beginning of any investigation, we are sharing information more easily, being efficient and giving ourselves more opportunities to catch criminals and fraudsters than ever.”

And Parliamentary Under Secretary of State at the Department for Communities and Local Government, Baroness Hanham said: “I am pleased that the councils are piloting the approaches recommended in the Government’s Fighting Fraud Locally report, which sets out how to tackle the £2bn of local fraud through better detection and fraud recovery, as well as extending their help and experience in dealing with fraud, to social landlords. They cannot afford to have resources meant for vulnerable people being stolen by fraudsters. Fighting fraud will help local councils protect front line services as well as ensure Taxpayers’ hard-earned money is not wasted.”

The Royal Borough of Kensington and Chelsea says that it has been working with registered housing providers for some time and last year recovered more than 70 social housing properties, which amounts to ten per cent of the borough’s annual housing allocations.
Anti-fraud officers from the three councils have over the past two years, recovered more than 200 social housing properties, prosecuted 130 people for fraud, including the first for subletting a social tenancy, and uncovered benefit fraud worth more than £2 million.

Westminster City Council’s ‘anti-fraud tsar’, Lindsey Hall, said: “Whether the fraud relates to the illegal subletting of Social Housing or the abuse of Housing Benefit to fund tenancies in the private sector for subletting, fraudsters need to understand that the game is now up. Where in the past they have been able to exploit the gaps in the system between Local Authorities, Housing Associations and Benefits’ agencies; we are now closing ranks and talking to each other thanks to this new partnership and enhanced data sharing.”

The campaign will conclude with a workshop on tenancy fraud for housing associations in the three boroughs. The councils will be trialling toolkits produced by the NFA to raise awareness of the work to combat fraud based on the central Government fraud awareness campaign ‘Spot it, Stop it’ and ‘Spot the Cheater’, the toolkit will be eventually rolled out nationally.

Peabody Director of Neighbourhoods, Joe Joseph said: “This partnership strengthens the already existing relationships between Peabody and the councils. This project will no doubt increase the detection of those that commit tenancy fraud and I hope make them feel less comfortable with their dishonesty.”

In a recent court case a South Fulham man who did not tell the council that had savings of almost £70,000 has been handed a suspended sentence. The man had been in receipt of Housing Benefit and Council Tax Benefit since June 2004 on the basis that he was too ill to work and had no savings.
However, an investigation from Hammersmith & Fulham (H&F) Council’s corporate fraud service and the Department for Work and Pensions Fraud Team found that the man was actually sitting on a £69,168. The threshold for claiming housing and council tax benefit is £16,000. Under interview, the man claimed some of the money was given to him from his girlfriend. The man had been operating a business. When questioned about this, the man said he was ‘just helping people out’.

In total, he defrauded the council out of £4,126 of housing benefit, £770 of council tax benefit. He also illegally claimed £2,353 of Income Support. At Hammersmith Magistrates Court, on October 24, the man was given a 12 months suspended sentence and told to do 180 hours community work.

Greg Smith, council deputy leader said after the case: “Benefit fraud will not be tolerated in Hammersmith and Fulham and we will continue to bring those who cheat the system to justice. The council carefully scrutinises how every penny of tax-payers money is spent and will continue to clamp down hard on those who think that fraud is acceptable.”

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