Councils in benefit probe – "Treasury oficials furious

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    Capital’s boroughs being quizzed over soaring temporary accommodation costs

    More than half of London’s councils have become embroiled in a large-scale probe by fraud investigators.

    The Benefit Fraud Inspectorate has visited 19 of London’s 33 councils after the Treasury became concerned about the soaring cost of temporary accommodation in the capital.

    The investigation centres on profits the boroughs have made from procuring temporary accommodation in the private sector for homeless people.

    Councils receive government subsidy for this but it is understood many have been inflating the amounts claimed to maximum housing benefit cap levels. This is legal but the BFI is understood to have asked the councils concerned to explain the gap. Treasury officials are privately known to be furious about the cost.

    Payments for temporary accommodation more than doubled in the UK between 2002/03 and 2005/06 to £539 million.

    Minutes of a 2006 Lewisham Council meeting, seen by Inside Housing, demonstrate how councils have benefited under the current system.

    ‘For example, Newham [Council] has been able to deliver a highly successful private sector leasing scheme with over 5,000 properties, generating over £16 million gross per annum from these properties,’ the report states.

    Frank Newton, benefit consultant for the Local Government Association, said the cost was ‘disproportionate in some of the London boroughs’.

    ‘The Department for Work and Pensions asked the BFI to go in and look not just at the London authorities but some outside London to help inform the debate about what might happen in the future,’ he said. ‘They are the inspection wing so the DWP were using them as a research tool.’

    The DWP is due to meet local authorities to discuss its plans next week. Councils are worried that it might lower the current subsidy cap.

    A spokesperson for the DWP confirmed that the BFI had carried out an investigation. ‘The results of these inquiries will be used to inform discussion between DWP and local authority associations when setting future subsidy levels,’ he said.

    ‘The involvement of the authorities was voluntary and on the basis of anonymity, therefore we cannot provide the names of the authorities.’

    Robert Latham, a barrister from Doughty Street Chambers, said the real worry was what would happen to the families who had been placed in temporary accommodation. ‘What happens when the Treasury says “no”?’ he said. ‘They will discover they have got all these families in private sector leasing that the Treasury is no longer prepared to subsidise.’

    source Inside Housing, 3 August 2007


    [quote:373d9c6dd7]’What happens when the Treasury says “no”?'[/quote:373d9c6dd7]

    We get a 2% pay rise… 🙁


    [quote:e6a7090b49=”Mikeb2″][quote:e6a7090b49]’What happens when the Treasury says “no”?'[/quote:e6a7090b49]

    We get a 2% pay rise… :([/quote:e6a7090b49]

    That is when the Treasury says yes.

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