William Eichler 10 September 2019

Housing fraud costs councils £16m each year

Housing fraud costs councils £16m each year image

People who claim to live alone in order to get a council tax discount cost the local government sector nearly £16m a year, a new study has found.

The fraud prevention service Cifas, along with WPI Economics, found that in the 2017/18 financial year, detected Single Person Discount fraud – the third most prevalent fraud in UK – was valued at £15.8m.

They also learnt that one in seven people in London consider falsely claiming a Single Person Discount to be ‘reasonable’. Half this amount feel the same in the East Midlands, West Midlands, or South East.

In addition to Single Person Discount, unlawful subletting also remains a key issue for local authorities.

According to the CIPFA Fraud and Corruption Tracker Summary Report 2018, local authorities estimate that over £216m of housing fraud occurred in the 2017/18 financial year, and this includes fraud on right to buy and unlawful subletting.

‘Unlawful subletting and fraudulent housing claims put huge financial pressure on local authorities and, more importantly, it means that families are missing out on the opportunity of a much-needed home,’ said Mike Haley, chief executive officer of Cifas.

‘The consequences of this type of fraud are very serious indeed, and could result in a criminal conviction and a prison sentence.

‘I would urge anyone thinking of falsely claiming housing benefit to consider the real impact this can have on their future as well as that of the community at large.’

Cifas cites Harrow Council’s collaboration with Datatank as an example of how to tackle Single Person Discount fraud. The London council saved an estimated £3.6m in revenue.

Fern Silverio, head of service at collections & housing benefits for Harrow Council, said: ‘Like other councils, Harrow is under pressure to maximise its income, particularly in the face of recent funding cuts.

‘Our partnership with Databank has helped us maximise our returns, through eliminating the loss of revenue we would have experienced otherwise. It has helped us keep fraudsters on their toes, at the same as future-proofing our own validation techniques.’

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