Housing Benefit Fraud (Hansard, 10 April 2001)

§ The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)
My Lords, the administration of housing benefit is the responsibility of individual local authorities. We are working with them to ensure that housing benefit is administered securely and to drive out fraud and error.

Lord Campbell of Croy
My Lords, I thank the noble Baroness for that reply. As a simple way of reducing this kind of fraud has been used effectively by some local authorities, involving unidentifiable envelopes—a move recently discussed in this House—are the Government encouraging other local authorities to adopt it? Furthermore, can the noble Baroness confirm that housing benefit fraud is still costing this country a huge amount of money?

§ Baroness Hollis of Heigham
My Lords, I shall respond first to the noble Lord's second point. We estimate that housing fraud and error—incorrect 1058 payments—are running at around £840 million. That is detected fraud, but of course there may well be other fraudulent claims that we are not yet catching. This year we are introducing for the first time a housing benefit accuracy review, as a result of which we hope to have more reliable figures.
As regards the noble Lord's question about unidentifiable envelopes—a matter which he has pursued in the past, most helpfully—I am happy to tell the House that something in the order of 350 out of 409 local authorities now take part in the "do not redirect" scheme for envelopes. As a result, those giros being paid direct to landlords on behalf of their tenants are no longer sent to landlords once their tenants have moved on. That was one of the main sources of fraud.

§ Lord Astor of Hever
My Lords, following the pilot projects testing different housing benefit application forms, can the Minister tell the House whether this has led to a common, baseline form, which should help to reduce the incidence of fraud?

§ Baroness Hollis of Heigham
No, my Lords, at present local authorities are still using different types of form even though this is a nationally administered benefit. However, we are introducing an important development by ensuring that local authorities have access to more information. Around 400 local authorities now have access to essential DSS benefit information and, following the passing into law of the Social Security Fraud Bill, they will, where authorised, have access to information from banks and so forth. On that basis, we shall be in a position to look again at the forms to see whether more common literature can be produced.

§ Earl Russell
My Lords, does the Minister agree that the accuracy of housing benefit administration could be improved if information given to the local authority could be passed on direct to the Benefits Agency and vice versa? Would this help in the effort to decrease the incidence both of fraud and error?

§ Baroness Hollis of Heigham
My Lords, the noble Earl is absolutely right and I am sure that it would help in the fight against fraud and error. The difficulty with housing benefit is that it is a very high value benefit. In London in particular, housing benefit can be worth three times as much as, say, income support. Thus we have an extremely complicated benefit to administer as well as one that is attractive to defraud. In London, the benefit is administered by staff with a high turnover, matched by tenants who are highly mobile. That provides a recipe—if I may put it in those terms—for complex administration and an attractive capacity to defraud. However, the entire thrust of our reforms. including the measures contained in the Social Security Fraud Bill, is to provide a single, secure base providing common information. As a result, we shall ensure that people are neither paid inaccurately nor can they claim fraudulently.