Assessing your risk from tenancy fraud David Hughes Head of - - PowerPoint PPT Presentation

Assessing your risk from tenancy fraud

David Hughes Head of Internal Audit and Counter Fraud London Borough of Lambeth

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What the papers say ….

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What the government says…

“It’s time to get tough and take on the fraud cons. At a time when we need to cut the national deficit and government waste, cleaning up fraud could save the taxpayer over £2 billion in recovered cash currently being fraudulently stolen

• r lost to tax cheats.

Better prevention, detection and recovery of fraud will help reduce the financial pressure on councils and help protect frontline services. Today I am publishing the top ten plays for cracking down on council finance fraud.” (May 2011)

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The Pickles Plan:

Ten ways to tackle council fraud and recover £2bn a year

• 1. Measure exposure to fraud risk;
• 2. More aggressively pursue a preventative strategy;
• 3. Use data analytics and credit reference agency checks to prevent fraud;
• 4. Adopt tried and tested methods for tackling fraud in risk areas;
• 5. Follow best practice to drive down Housing Tenancy and SPD fraud;
• 6. Pay particular attention to high risk areas: e.g. procurement and grant

awards;

• 7. Partnership working to tackle organised fraud across local services;
• 8. Maintain specialist fraud investigative teams;
• 9. Vet staff to a high standard to stop organised criminals infiltrating key

roles;

• 10. Implement national counter fraud standards developed by the

Chartered Institute of Public Finance and Accountancy.

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The National Agenda

• DCLG: Funding made available to local authorities

to tackle tenancy fraud

• Subletting now a criminal offence (Prevention of

Social Housing Fraud Act 2013)

• Audit Commission: Protecting the Public Purse 2013
• National Fraud Authority: Fighting Fraud Locally
• HCA: Regulatory Framework for Social Housing in

England 2012

• CIH: How to Tackle Tenancy Fraud

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What the Audit Commission says …

• Over £2 billion of fraud every year against local

government

• 2,642 homes were recovered from tenancy

fraudsters in 2012/13 (up 51% on 2011/12)

• Estimated cost of tenancy fraud to Councils -

£845m (£1.8bn for all social housing – NFA)

• 4% of housing stock in London, 2% outside
• 98,000 social homes in England are subject to

some form of tenancy fraud

• Right to Buy fraud up 392% on 2011/12

(Protecting the Public Purse 2013)

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More PPP ….

• 51% more homes recovered by social housing

providers than previous year

• Councils finding tenancy fraud up to 107 (from

90 in 2011/12)

• 58% of all tenancy frauds detected in London

(0.35% of housing stock)

• Report highlights guidance issued by CIH

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Impact of tenancy fraud nationally

• At least 4% of social housing stock in London

(2% outside London) is typically subject to some form of tenancy fraud

• This means 98,000 social homes nationally
• NFA estimates national average loss to the

public purse of £18,000 per property

• Cost of building a social housing unit from new

is £150,000

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About Lambeth …

• One of the most densely populated inner

London boroughs - population c300,000

• 130,000 households
• 44,000 households on benefits
• 14th most deprived borough in England
• 40% of residents are graduates
• 38% of population are from ethnic minorities

(7th highest in London)

• Annual turnover around £1.2bn

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Social housing in Lambeth

• 130,000 households (2/3 in social/

private rented accommodation)

• Transient population – 10%+ turnover
• Local authority stock – 25,000 (managed

by ALMO and TMOs)

• Council leaseholders – 9,500
• Housing associations – 25,000
• Temp accommodation – 1,350 families
• Council waiting list – 20,000

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Fraud investigation at Lambeth

• Internal Audit and Counter Fraud Service
• Counter Fraud Team – 15 staff
• Team investigates tenancy, housing benefit

and internal fraud

• Funding from Housing Revenue Account,

General Fund, DWP and MoPAC

• Annual work plan and targets agreed with

Audit Committee

• Regular reporting on performance and
• utcomes to Members

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What Lambeth’s investigators have achieved since April 2011

• 650 investigations completed
• 190 properties recovered
• 90 recommendations to recover in progress
• 80%+ of recommendations are recovered
• Estimated total recoveries: 260 (over 1% of
• ur stock)
• 40% success rate on all referrals (highest

rate = proactive exercises)

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Lambeth’s fraud exposure …?

Cut the Queue Project (August 2011 to March 2013)

• 2,000 tenancies checked
• 48 properties recovered already
• 18 properties being recovered
• 12 still under investigation
• Estimated fraud rate = 3.9% (c1,000 Council

properties)

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Learn the benefits of assessing the risk

• f tenancy fraud to your organisation
• Understanding what you need to do to tackle

fraud and the extent of the problem

• Build the case for appropriate resources to

tackle tenancy fraud – specialist team and resources

• Work with housing management colleagues –

helping them to meet their objectives and

• utcomes

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Learn the benefits of assessing the risk

• f tenancy fraud to your organisation
• Policies, procedures and practices can be

improved to prevent fraud

• Fraudsters don’t operate in discreet

geographical areas and don’t just commit one type of fraud

• Moving from a reactive only service to tackle

reactive referrals and carry out proactive exercises

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Estimating the effects of tenancy fraud

• impact on local citizens e.g. waiting list, anti-

social behaviour

• temporary accommodation costs increase

(rise in B&B usage over past 2 years)

• impact of length of tenancy fraud – our early

research

• impact on “genuine” subtenants who believe

they are legitimate tenants (housing need, deposits lost, sudden eviction etc)

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Strengthening the response to tenancy fraud

• Senior management/elected member buy in
• Appropriate resources (reactive/proactive)
• Targeted effort – proactive exercises
• Data matching
• intelligence-led visiting and investigations
• Partnership working with ALMO and HAs
• Joint operations with enforcement teams
• Joined up approach to fraud investigation

(benefits and housing)

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Our approach

• Taking ownership of handling/receiving referrals
• Working closely with our ALMO –

training/awareness, regular reporting/liaison

• Local intelligence/experience of housing officers
• Targeted intel checks and visiting in blocks
• Training/awareness for housing maintenance

staff/contractors – spotting and reporting fraud

• Data matching – cross-referencing intelligence

with credit reference data

• Engaging support from Members and tenants in

identifying sublet properties

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What do we cover?

• Sub-letting
• Right to Buy (vetting applications)
• Housing Applications (Register and

Homelessness cases)

• Transfers, Assignments, Successions
• Non-occupation

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Working with partners

• ALMO and TMOs
• Legal team (prosecutions and civil action)
• Other Council enforcement and intervention

teams

• DCLG funding for two posts working with two HAs

with 5,000 Lambeth properties

• Providing investigations on a full cost recovery

basis to registered providers

• Met Police LAPO scheme

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Lessons learnt …

• Getting our data right
• Risk assessment is an art not a science?
• Listening to housing officers and tenants
• Be proactive
• Knocking doors gets results
• Joined up approach pays dividends
• Regular reporting on successes

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Any Questions?

David Hughes Head of Internal Audit and Counter Fraud Finance & Resources Lambeth Town Hall Brixton London SW2 1RL Phone: 0207 926 9892 Mail: dhughes@lambeth.gov.uk

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