Government to spend £12m p a tackling housing benefit fraud

The government has announced extra cash to help local authorities crack down on housing benefit fraud and error, as part of the housing announcements in today’s Budget.

Council resources to tackle fraud and error associated with the benefit will be bolstered by an extra £12m a year.

But the Office for Budget Responsibility (OBR) said the policy is likely to see “diminishing returns”.

The OBR noted that housing benefit is being replaced by Universal Credit for working-age claimants but government is providing the same funding – £12m – each year, despite fewer people claiming housing benefit as a result of the switch.

The OBR said: “As a result it will target a diminishing caseload over time and [an] increasing proportion of which will be pensioners. This is likely to generate diminishing returns on compliance interventions because the remaining caseload is less likely to be in work or experience frequent changes in circumstances, so less likely to make errors in their claims.”

Overall the independent forecaster said this policy had a ‘high’ uncertainty rating.

Under current government plans, the housing benefit will be replaced by Universal Credit by 2023.

According to research in November by the Chartered Institute of Public Finance and Accountancy, housing fraud cases fell by 23% in 2018/19.

Cases of council housing fraud fell from 4,733 in 2017/18 to 3,632 in 2018/19, while Right to Buy fraud cases more than halved from 1,518 cases to 652.

Source