The Prevention of Social Housing Fraud Act 2013 Paul Downie Deputy Director Affordable Housing Management & Standards
Social Housing Fraud abuse of social housing not only deprives of a settled home those in genuine need who play by the rules, it also comes at a considerable cost to the taxpayer I am determined that social landlords should be able to make best use of their stock in a way which best meets the needs of their local area. Cutting down on fraud is a key part of ensuring this happens. Grant Shapps, January 2012 2
System under pressure Number of households on local authority waiting lists (England) 2.0 1.8 Households (millions) 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Years (as at 1st of April ) 3
Main Types of Social Housing Fraud Civil offences: Sub-letting Key-selling Unauthorised assignment Wrongly-claimed succession Criminal offences Right to Buy / Acquire fraud Obtaining a tenancy through false statement 4
Differences from the Fraud Act 2006 Dishonesty a requirement of the Fraud Act, not of the lesser offence in the PSHF Act. Under the Fraud Act 2006, the prosecutor is required to prove that: the tenant was under a legal obligation to disclose the fact that he had ceased to occupy the property; the tenant s subjective belief was that he had ceased to occupy the property; the tenant intended by his action to make a gain or cause a loss. Under the PSHF Act offences, the prosecutor would not be obliged to prove any of these 3 elements. 5
Social Housing Fraud At least 98,000 - or more than 150,000? Not just sub-letting; not just London & SE Not a case of LAs good / PRPs bad Social housing fraud is the largest category of fraud loss across local government (Audit Commission) 6
Levels of LG Fraud m 1000 900 800 700 600 500 400 300 200 100 0 Tenancy Procurement Payroll & Recrt Council Tax Blue Badge Grant Pension 7
LA-owned homes recovered 10/11 250 200 150 100 50 0 East Midlands East of England North East North West South East South West West Midlands Yorkshire and Humber Council Homes recovered 09/10 Council Homes recovered 10/11 Council Homes recovered 11/12 8
LA-owned homes recovered 10/11 London 1600 1400 1200 1000 800 600 400 200 0 Council Homes recovered 09/10 Council Homes recovered 10/11 Council Homes recovered 11/12 9
January 2012 Consultation 11th January 4th April considered case for new criminal offence restitutionary payments mandatory data access just under 200 responses: very largely supportive summary of responses published July 2012 http://www.communities.gov.uk/publications/housing/socialhousingfraudresponses 10
Prevention of Social Housing Fraud Act 2013 Private Member s Bill, introduced by Richard Harrington MP Strong cross-party support Royal Assent 31 January 2013 11
New Criminal Offences Consultation Response: Strongly in favour (c90%) Need to distinguish on motivation financial gain a very clear message to anyone committing fraud of this type that they run a high risk of being severely punished (London Borough) 12
New Criminal Offences PSHF Act New offences of sub-letting & parting with possession 2 levels knowingly (maximum penalty level 5 fine - 5000) dishonestly (2 years + unlimited fine) Exemptions to knowing offence person who could have had tenancy transferred Threats or violence 13
Power to Prosecute Act: Allows LAs to prosecute cases for housing associations (in or out of their area) Allows LAs to prosecute cases for other LAs Consultation: Strong support (c88%) the power to prosecute should not be extended to housing associations but should be exercised by the local authority on behalf of social housing providers (Housing Association) 14
Restitutionary Payments Act: New, simple procedure for a Court to make an unlawful profit order awarding profits to the landlord To apply in both civil and criminal cases Would not depend on landlord making any loss Could sit alongside any other punishment, e.g. Proceeds of Crime, Compensation Order Consultation Strong support (c88%) an incentive to tackle the issue. It also ensures that the fraud does not pay for the individual committing it. (Housing Association) 15
Information Sharing Act amended at Bill Commons Committee stage: Enables Ministers to make regulations on powers to require information Intention to cover banks, building societies, utilities will have the power to add and remove bodies Consultation: Strong support (c88%) Other suggestions internet providers, letting agents, HMRC cases can become bogged down unless information can be gathered quickly (Unitary authority) 16
Assured Status Act: In cases where the tenant parts with possession or sub-lets the whole, assured status of tenant is lost and cannot be regained. Would bring assured tenancies into line with secure Consultation: Strong support (c90%) Some desire to look more broadly at differences between tenancies We are pleased with the decision to bring assured tenancies in line with secure tenancies (Housing Association) 17
What Next? Prevention of Social Housing Fraud Act Expect to commence provisions before summer (- some complex issues around transition) Further regulations needed to enable data access Meanwhile - CIH team raising awareness & spreading good practice 51 authorities received funding 2010/11-11/12; expect to announce shortly further funding 2012/13-14 tens of thousands of homes to recover 18