Prevention of Social Housing Fraud (Power to Require Information) (England) Regulations 2014

Lord McKenzie of Luton Excerpts

Monday 24th March 2014 Grand Committee

[Lord McKenzie of Luton (Lab)]

My Lords, I again thank the Minister for introducing these regulations, which, as we have heard, are focused on facilitating investigation into social housing fraud. We support that focus and support these regulations. The Prevention of Social Housing Fraud Act 2013 introduced deterrents, additional to the right to terminate a tenancy, relating to unlawful subletting and recovery of profits. As we have heard, it was a Private Member’s Bill and was very ably steered through your Lordships’ House by the noble Baroness, Lady Eaton—we should again congratulate her on that effort.

We have common cause in tackling social housing fraud. Cheating on the system and denying those whose housing needs are thereby frustrated can in no way be condoned. This would be the same in any era, let alone that which faces us currently, with a housing crisis with, simply, too few new homes—private and social—being delivered; and notwithstanding also that those to whom social housing is unlawfully let may themselves be faced with appalling housing situations. We have heard the Audit Commission estimate that some 98,000 of the 4 million social homes are unlawfully occupied—4% of the stock in London and 2% elsewhere. Other estimates put it even higher. Whatever the actual numbers, we know that unlawful occupation prevents tens of thousands of social homes being allocated to the people who need them most. For many who let unlawfully, there are profits to be had: the difference between private sector rents and social rents. The inexorable rise of private sector rents make such letting potentially very lucrative. There is also the cost to the public purse of families being displaced into the private rented sector, with increased housing benefit bills.

As the privacy impact assessment makes clear, and in tune with what the noble Baroness, Lady Eaton, has just said, compelling certain private sector organisations to provide data to local authorities for social housing fraud investigation purposes raises important issues around privacy and data protection. It is asserted that although the key task of the social housing fraud investigation is to link the tenant to another property, through evidence of the receipt of rental income from a sublet or mortgage payments suggesting ownership of another property, the information reasonably requested should not include sensitive personal data. That analysis is one that we agree with. We accept that the powers sought in these regulations are based on the well established procedures for social security fraud and, indeed, are not as extensive in that levels of income, for example, are not needed. We understand that the fact that subletting is now a criminal offence itself enables organisations to lawfully disclose certain information but does not compel them—hence the need for new powers.

There are express safeguards surrounding these powers, which the noble Baroness, Lady Stowell, spelt out. I will not repeat them now. There are obviously, at least theoretically, robust safeguards but the issue is how they are being monitored in practice. The expectation is that local authorities will publish information through their Freedom of Information Act publication scheme—for example how often they use the gateway. There is also the expectation that they will comply with data protection principles around processing and handling the relevant data et cetera. Perhaps the Minister can just say a little more about what is expected in this regard and what local authorities’ records have been in relation to their powers in this regard to date. We will expect the Government to keep Parliament updated on how effectively the regulations are working in ensuring that social homes are reallocated, and on whether the anticipated savings are materialising, before the official departmental review in 2018. We are pleased to support these regulations.

[Baroness Stowell of Beeston]

I am very grateful to the noble Lord, Lord McKenzie, for his warm support for these regulations. I am also grateful to him for describing in some detail how the impact assessment on privacy has been carried out and what it contains. He is right—as, indeed, is my noble friend Lady Eaton—that we have to be careful that the relevant privacy issues are properly taken account of.

On that particular point, the noble Lord asked whether there was any evidence of misuse of these new powers. We certainly expect local authorities to have strong systems in place to prevent misuse. We would expect disciplinary action to be taken against an authorised officer who misused the power to require information because it is an offence to obtain unlawfully or disclose personal data. The Information Commissioner will be able to investigate complaints about the use of data by a local authority, and it will be for the Information Commissioner’s Office to investigate such claims. Should it find any failings in this area, it can, and will, give out fines for the misuse of data.

On the noble Lord’s questions about publication of the use of this power, that issue will be coming through to me and I will respond before I sit down. More generally, as I have already said and as we have acknowledged, social housing is an extremely valuable asset. While the vast majority of social tenants play by the rules, it is vital that social landlords have the tools they need to root out those who do not. Along with the other measures in the Prevention of Social Housing Fraud Act, the new power introduced by these regulations will help free up much needed homes for many of those on the waiting list who are in genuine need.

We talk a lot about the need to build more new homes but we are mindful also of the need to ensure that the existing social housing stock is being used as intended. Reducing fraud will mean that more households in genuine need will enjoy the security and stability that a decent home provides. Cracking down on that fraud will reduce the benefits bill by moving households on the waiting list from expensive temporary accommodation into the newly freed up social homes.

It is worth saying that about 90% of responses to the government consultation were in favour of the new data access power. Councils already have similar data access powers for social security and council tax fraud reduction schemes. As well as tackling fraud that is already in the system, these regulations will help to prevent fraud by stopping cheats getting into the system in the first place. The Government want social landlords to tackle fraud in their housing stock and we must give them the tools that they need to do that. I am very pleased that this power will enable them to do so.

Sadly, it does not look as though I am going to be able to provide the noble Lord with any more information at this time about how we will ensure that local authorities place their use of these powers in the public domain. However, I will ensure that I follow up that information in writing. I am slightly frustrated that I cannot find it in my brief because I know that I read something over the weekend about providing information of this kind to allow for proper accountability and scrutiny. However, I am confident that I will be able to send the noble Lord forthwith a comprehensive letter in reply.