Prevention of Social Housing Fraud Bill

Caroline Nokes Excerpts

Friday 13th July 2012 Commons Chamber

[Caroline Nokes (Romsey and Southampton North) (Con)]

I, too, congratulate my hon. Friend the Member for Watford (Richard Harrington) on introducing what I believe will be a valuable piece of legislation that will ensure that those who need to have their accommodation provided for by housing associations or local authorities are given better access to the available housing stock. I say that because, without wishing to labour the points that other Members will no doubt make, the illegal sub-letting of social housing distorts the supply of limited and valuable housing stock, prevents those who most need social housing from securing it and, of course, rewards and motivates fraud. This Bill is about ensuring that the housing stock is used to best social effect. Given current pressures on the supply of, and demand for, housing, the Bill is also very timely.

There is, of course, genuine difficulty in assessing the sheer scale of the fraud. The National Audit Office offers a figure in the region of £900 million a year, but this counts only fraud committed against local authorities and misses many of the sums lost to housing associations, which regrettably do not collect as many data. The true scale of the problem is therefore unknown. I would like to pay tribute to the largest housing association serving my constituency. Aster Communities is fortunate to suffer from relatively low levels of tenancy fraud, but that in no way makes it complacent. In fact, it is probably its vigilance and checks—these include collection and use of photos at sign-up, effective sharing of information protocols, and acting swiftly and rigorously on reported problems—that account for Aster Communities suffering from low levels of fraud locally.

Our experience from our constituency surgeries often gives us the opportunity to help housing associations to identify where there might be fraud. We are often the people who hear about it first from our constituents who, in many cases, are desperately seeking either accommodation in the first place or larger accommodation, but have not been able to access it. I have found from my constituency that residents are quick to tell me where they believe there is illegal sub-letting. In 2010—the year I was elected—only five three-bedroom family homes came forward for occupation via the local authority and housing associations in the Test valley part of my constituency, which means that families looking to move to larger accommodation often find themselves blocked by illegal sub-letting.

I vividly remember one such case, involving a gentleman in desperate housing need. He was a single father with three children, and they were living in significantly overcrowded accommodation. He used to update me regularly on the situation in the village that he wished to move to because of family connections—he was seeking assistance from his parents to look after the children. He e-mailed me daily with information on the road that he wanted to move to, telling me about a number of houses that he believed were being illegally sub-let. I duly reported all that to the housing association, but I was surprised to learn that my constituent was not deemed to be a priority because he was already the tenant of another housing association property in a different part of the region, which he had let out. That just proves that what goes around can also come around.

There is a need to get this Bill right, and with the intention of assisting in that aim, I wish briefly to mention an issue that I am sure the Minister will have anticipated. It has been difficult to obtain the submissions given to the consultation, yet the Bill Committee would certainly benefit from having access to that material. I understand that the Government have yet to publish all the submissions received, but I trust that that will not affect the efficacy of the final legislation, and that the Minister will ensure that all the submissions will be made available for consideration.

The Bill provides for many genuinely positive outcomes. The creation of a new criminal offence of illegal sub-letting will certainly be the biggest benefit. Local authorities will also have the power to prosecute those who illegally sub-let, and the Bill will ensure that the courts can recover fraudulently obtained funds. I believe that making illegal sub-letting a criminal rather than a civil offence will demonstrate the seriousness of abusing social housing in this manner, deter it as a practice, punish those who engage in it and protect housing stocks for those who are genuinely entitled to them.

Those who work in this field in my constituency—whether as lawyers servicing housing associations, or representatives of the associations themselves—have made a number of interesting points to me. In the course of our discussions, I was informed of a case in which a lady who was renting a social housing property had sub-let it and, subsequently, under a different name, obtained a second property for herself. This came to light when she moved into a property that she was able to own, having accrued thousands of pounds of illegal income over several years. There was no ability to recover those moneys, and the woman simply moved the illegal tenants out of the first property. The Bill will remedy such situations and make it far simpler for housing associations to deal with that kind of troublesome tenant. In the light of such blatant abuses, it is no wonder that associations such as the Guinness Trust are now piloting schemes in which officers are employed specifically to deal with tenancy fraud. That illustrates that the problem is growing, and that the Bill is therefore timely.

An important aspect of the Bill is the removal of the anomaly in the way that the law treats assured tenants and secure tenants. I commend my hon. Friend’s efforts to close that loophole. Social landlords with assured tenants are often disadvantaged owing to the loopholes that the Bill intends to close. I return to the case of my constituent to illustrate this point. The Bill will close the loophole and prevent assured tenants who have committed fraud from regaining their security of tenure, thus creating a level playing field between the two types of social tenant, and empowering housing associations to ensure that their properties are being put to best use.

There are of course some problems that the Bill cannot resolve, such as the difficulty of proving a tenant’s real intention—or otherwise—to return to a property. This is one of the defences regularly employed to prevent eviction, as intent is hard to prove in law. The Bill will be of enormous help to housing associations in that regard, because if they can prove that sub-letting is taking place, they will be much more likely to get a mandatory order for possession. That might encourage housing associations to seek possession.

I shall end as I began, by congratulating my hon. Friend and the Minister on bringing forward the Bill. It has cross-party support, and it is clearly welcome, timely and much needed.