Social housing providers need to target tenancy fraud if they want to save money, a recent study has found. The study, by University of Portsmouth master’s student and Head of Counter Fraud at the Audit Commission, Alan Bryce, is the first to identify the true scale of the problem, and to suggest ways to combat it. He spoke at the university’s counter-fraud and forensic accounting conference on June 4.
Figures released this month show that in 2013 the National Fraud Authority identified housing tenancy fraud as the second largest single drain on local government coffers caused by fraud in England, with an annual cost of £845m. In addition there is a further £919 million annual loss to the public purse as a result of tenancy fraud committed against housing associations.
This combined annual loss to housing tenancy fraud of £1,764m dwarfs housing benefit fraud, which is estimated to cost the UK taxpayer £350m a year.
Housing tenancy fraud occurs when a tenant unlawfully sublets a council or housing association-owned property to someone else, when a family abandons a house or does not occupy that property as their principal home.
Almost 100,000 people in England are committing tenancy fraud, equivalent to a community the size of Woking, Rugby or Eastbourne.
Councils reclaimed nearly 1,800 homes from housing tenancy fraudsters last year. To build an equivalent number of homes from scratch would have cost the public purse over £265 million.
Social housing providers are getting better at detecting tenancy fraud, as long as they look in the correct way, says Alan.
Londoners are less likely to get away with committing tenancy fraud, as councils in London have been addressing the issue for longer and many already employ specialised fraud detection investigators.
Housing associations also have an important role to play. They now account for over half of the total social housing stock in England. Unlike councils, there is no national information on the numbers of housing association properties recovered from tenancy fraudsters.
“These figures are only starting to make a dent in the problem,” says Alan.
Over half of all non-London councils with housing stock did not detect even a single housing tenancy fraud in 2012. Although non-London councils are increasingly taking action against tenancy fraudsters, there is still considerable scope to do more to save some of the millions lost to fraud.
Dr Graham Brooks, of the Institute of Criminal Justice Studies at the University, said: “This is a very timely study, we are hoping social housing providers will take heed of the advice given in the report.”
The study makes several suggestions, including hiring specialist fraud investigators to track down tenancy fraud.
In addition, social housing providers are encouraged to work with each other to unmask the tenancy fraudsters.
Alan says: “There is a lot of good practice happening in non-London social housing providers, what these people need to do is share their knowledge with each other.”
The study highlights the role members of the public play in tackling such fraud, and encourages people to raise their concerns with the council or housing associations when they suspect tenancy fraud is occurring within their neighbourhood.
The findings are published in ‘Protecting the Public Purse 2012′, an annual national publication produced by the Audit Commission .
