Are housing association and council landlords guilty of a hundreds of million of pounds benefit fraud each year? And YES I am being serious and seeking any serious legal answers to that question as there is huge validity in social landlords contrivance (ie. fraud) in taking advantage of the HB system with the so-called conversions.
Official figures reveal that by the end of the last financial year and 31st March 2017 housing associations had “developed” a total of 192,748 properties that are rented out at the 44% higher affordable rent level, and of these, 102,004 were previously rented out at the social rent level – they were ‘converted’ as the official figures in the Table below reveal.
Council landlords have also “developed” these conversions to the affordable rent level too and there is a strong argument that this is fraud, and specifically in HB regulatory terms a fraud called contrivance in these landlords contriving to take advantage of HB regulations.
In simple lay terms the 102,004 HA properties were let at an average rent of £144 per week – the so-called affordable rent level – when the previous week the former tenant was paying £100 in rent and thus the conversion issue is claiming 44% more in rent on the following Monday than that rent which was charged on the day before in the Sunday.
It is exactly the same property and the only change is the name – the social rent property has become an affordable rent property (and leaving aside any moral issue even that social landlords operating the affordable rent regime has a huge financial interest in evicting the lower paying social rent level tenant!)
The question is Why is this not deemed to be contrivance (ie fraud) under the HB regulations and which were written to stop any landlord from any form of contrivance in order to take advantage of the HB system? These AR ‘conversions’ are a classic case of contrivance.
The council landlord issue is the social rent tenant was paying £89 or so per week – the council social rent level – and was replaced by an affordable rent paying tenant the next week pay £144 and an increase of 61% on average and thus even more than the 44% overnight rent increase for the HA tenant – and in both cases the HB department of the local council pays these overnight 44% and 61% increases in Housing Benefit!
Imagine if a private landlord got rid of a tenant and the following week charged the replacement tenant 44% or 61% more and expected the same local council to pay this increase in housing benefit! The council would deny this without question yet they do pay these 44% and 61% increases in Housing Benefit to council and housing association landlords on properties that have been contrived to take advantage.
How can a HB decision maker say that the exact same property is worth and is paid 44% or 61% more in Housing Benefit terms on a Monday than what what paid out in social security benefit (HB) the previous day?
Housing benefit has a long history of individual HB officers at local councils making a stand on points of regulatory argument. For example the supported and sheltered housing world in 1996 was thrown into chaos as one HB officer in Oxford said HB was only meant to pay for bricks and mortar and not for support that caused the Supporting People issue. More recently a (jobsworth?) HB officer in Anglesey said a night shelter was not eligible for HB because it did not have any lockers for the rough sleepers there (and was unfortunately successful too!)
So where is the HB officer that takes a stand here and refuses to pay the 44% or 61% increases in HB from one day to the next simply because a social (sic) landlord chooses to relabel a property?
The scale of this alleged benefit fraud is monstrous. The average increase in English housing associations from the social to affordable rent level is £2340 per year and that is 32340 per year more paid out in HB in each case where HB is claimed. Statistically 74% of all social housing tenants receive HB and so the amount of additional social security benefit paid out extrapolates to 74% of 102,004 conversion cases which is 75,483 lots of £2,340 per year for 2016/17 – and additional HB pay out of £176.63 million – and thats just for additional HB paid to Ha ‘conversion’ tenants in England.
The full amount needs to add on LA conversion tenants in England and both conversion tenants for Wales and Scotland and Northern Ireland. We are thus looking a potential quarter of a billion pounds per year if not more paid out to these very much contrived conversion properties of social (ahem) landlords and a benefit fraud case like no other that has ever gone before!
Thoughts anyone? Anyone know a HB officer who is a member of the Tax Payers Alliance? Yes that is also a serious question. Or, maybe, we could see a political opposite in a council, even a council leader who instructs a HB officer to refuse to pay the higher 41% in HB claimed by a housing association for a HA conversion?
The affordable (sic) rent policy is a joke and it shafts the tenant and the taxpayer at one and the same time and as far as I know there is no higher court decision on whether its most amoral form in conversions is contrivance and fraudulently takes advantage of the HB system. Given the scale of the benefit sums involved there needs to be a legal ruling on whether or not it is legally permissible and accords with HB regulations to claim 44% and/or 61% higher social security benefits on the same bricks and mortar when the clock strikes midnight of a sunday evening.