Fraudsters in London are increasingly targeting the right-to-buy scheme and funding for children of destitute families, new research has found.
A report by the London Boroughs Fraud Investigators Group reveals that the capital’s councils uncovered £73m of fraud in 2014-15, an increase of 46% on the previous year.
This is the highest value of fraud detected in the capital since data collection began 25 years ago and came despite a fall in overall incidents of fraud from 21,606 in 2013-14 to 19,513.
According to the Protecting the London Public Purse report, right-to-buy fraud cases more than doubled to 300 in 2014-15 as their value increased by more than 185% to almost £26m.
These increases were driven by spiralling property prices and the 2013 increase in the right-to-buy discount, it states.
Based on the survey results and Department for Communities & Local Government data, the report’s authors estimate that 3% of right-to-buy purchases in the capital were subject to fraud.
It highlighted cases where tenants had attempted to buy their properties, despite having illegally sublet them for years and not lived there themselves.
The survey of 93% of London councils also identified 432 fraudulent claims that had been made under “no recourse to public funds rules”.
These frauds had cost councils £7m, making it one of the largest categories of fraud.
The report authors warned that the number of incidents of this kind of fraud could be higher than recorded as claims were growing and many authorities did not look for fraud in this area.
It pointed to one council that saw 10% of claimants withdraw their applications when more stringent identity checks were introduced.
Councils are required to support children whose parents have no recourse to public funds due to their immigration status.
Many boroughs reported cases where claimants had presented with children who were not their own.
The survey also found an increase in corporate fraud and a decrease in housing benefit and council tax benefit fraud.
It said that this was in keeping with the transition to a central single fraud investigators service, bringing together council, HM Revenue & Customs and Department for Work & Pensions staff into a central function to focus on benefits fraud.
Kevin Campbell-Scott, chair of the group and Southwark LBC fraud manager, said: “The sterling work our fraud teams are doing is taking money and council houses back from fraudsters, so that they can benefit those in genuine need.
“However, we can’t be complacent. New risks are emerging all the time and we need to stay one step ahead of those who want to cheat the public purse.”
Picture by David Holt