Prevention of Social Housing Fraud Bill

Lord Greaves Excerpts

Friday 30th November 2012 Lords Chamber

[Lord Greaves]

My Lords, I first congratulate my noble friend Lady Eaton on bringing the Bill to this House, her presentation of it, her clear explanation of its basic contents and the balanced way in which she put it forward. I join her in thanking Richard Harrington for introducing the Bill in the House of Commons and welcome the Government’s support. There is every likelihood that it will come into law.

In one sense, it is quite extraordinary that in so many cases councils and housing associations do not know who is living in their houses and that this clear misuse and abuse of the system of what we now call social housing in this country is so prevalent. It may well be that the true figure is around 100,000. Nobody knows exactly, but it is fairly clear that it takes place on a wide scale. I think back to the days when I started getting involved in local government and how the world has changed. Forty years ago, it would have been almost impossible for this kind of fraud to take place because the local authorities, who then owned almost all the social housing, simply knew who was living in their houses and what they were doing. Before local government reorganisation, when a council house became empty in one of our local authorities—a small urban district of which I was not a member—then its housing committee, consisting of all the authority’s members, would sit round the table at its next meeting and decide who would get the tenancy of that council house.

This is clearly a world away from the present circumstances in which local authorities and housing associations in particular are large-scale organisations run in what some people might think is a bureaucratic way. They are run much more like a business, rather than as the local community-based organisation that we looked to in the past, when everybody knew exactly what was going on. The world has changed. Now local authorities and housing associations do not generally employ rent collectors. In the days when the rent collector went round every week, it would be impossible for this kind of fraud to take place. It is often similar with repairs. When repairs are ordered now, they are either done by a large-scale organisation employed directly by the landlords or often by outside contractors. There is not the local knowledge there was when one or two tradesmen directly employed by the authority went round the estate or a local area doing the repairs. Again, these people would know who the tenants were. Councillors representing much smaller wards in those days would also be able to keep an eye on this kind of thing.

I come from an area where I do not think that this type of fraud takes place on any sort of scale. I was trying to think of an instance in my ward in either the main housing association in the area, which looks after the former council housing, or one of the other housing associations which have small numbers of properties in the area, but I do not think that this kind of fraud takes place on any scale at all in that kind of area. However, rents are generally low in both the private sector and the social housing sector in such areas and there is not the great gap in the level of rents described by the noble Baroness, Lady Eaton, that exists, for example, in many parts of London. However, it is clear that in many parts of the country this kind of fraud is rife, and the Bill is welcome as a means of dealing with it.

There is a hope that the Bill will not need an extended Committee stage; it is in a good form and could be passed into law fairly quickly. That is the hope around the House and I would like to ask the Minister, when she speaks from the Government’s point of view, what they will do if and when this Bill becomes law.

First, it is clear that a fundamental part of this legislation will be the need to inform and advise tenants about exactly what they can and cannot do and about the important distinction between their right to take in lodgers and their non-right—and the fact that it will be illegal—to sublet without permission following the passing of this Bill. It is very important that people occupying social housing legitimately understand the difference between those two positions because it might not be too obvious to people who do not go into the details of the different legislation. We do not want to discourage people in council and other social housing from taking in legitimate lodgers, which is a perfectly proper and reasonable way of using accommodation to its full and of providing accommodation for people who need it and who otherwise might not have it.

Secondly, what will happen in circumstances where people, whether or not they know about the rules, contravene the new legislation by not asking for permission to sublet but, if they had asked, it would have been granted? It would be wrong if they were to be arraigned before the courts. It is a typical situation in planning legislation and planning control that people often carry out development or changes of use without asking for permission, but when complaints are made and the enforcement process goes into operation it becomes clear that if they had asked for permission they would have got it. There is a parallel here and it would be wrong for people to be arraigned before the courts and action taken against them if they would have received permission. In other words, what advice will be given to local authorities for retrospective permission to be given when it would otherwise have been thought to be reasonable?

Thirdly, if and when this legislation is passed—which we hope will be soon—what is the Government’s intention on commencement? Is it that commencement orders will be made fairly quickly and advice given to local authorities and social landlords so that the new system can be brought into operation? Perhaps the Minister will give an assurance about that.

Some of the MPs who took part in the debate in the House of Commons were a little optimistic about the extent to which this legislation will release a great deal of new council and social housing for people on waiting lists. It will clearly have some effect there but the real effect will be that it will stop people abusing the system and bring this housing back into the use for which it is intended. On that basis, I am pleased to support the legislation.