Housing Fraud: The Hidden Scandal Spotlight

'Tonight, we investigate the housing scams

'that are denying the homeless a place to live

'and costing us millions of pounds.'

How much benefit were you being paid for this empty house?

It was about £300 a month.

'We reveal that thousands of houses lie empty across Northern Ireland

'as families struggle to get a roof over their head.'

I just can't cope any more -

the amount of stress that we're under as a family...

'It's a fraud that's been around for decades

'but officially didn't exist.'

Might it be that the Housing Executive

hasn't addressed this in the past

because they might not have liked what they found?

I don't accept that.

'But we've found an insider who says if the fraud was tackled,

'it would go a long way to solving the housing shortage.'

I don't think there's a housing crisis.

If the Housing Executive would follow up their empty homes,

people that aren't living in them, and on housing benefit fraud,

I think the housing crisis would go.

Experts are claiming that we are in a housing crisis,

that there are not enough social houses for families.

We currently have about 40,000 people on our waiting lists.

-REPORTER:

-Longer waiting lists and more homeless.

A housing crisis in the making.

So we do have a housing crisis.

It's accumulated over a number of years

and it will take a number of years to fix it.

'They're trying to fix it by building new houses.

'Last year, £200 million of public money

'was spent building estates like this one in Londonderry.'

So, what, this is a three-bedroom house?

This is a typical three-bedroom house.

'The demand for homes like these is huge,

'but we're told we're only building half of what we need every year

'simply to keep the waiting list as it is.'

'But is the only solution to build more and more houses?'

We've discovered that there could be enough homes out there already

to house thousands of families.

But they can't get them

because they're being occupied by fraudsters.

Tenancy fraud is the biggest council scam in England and Wales,

costing £1.8 billion every year.

But yet nobody in Northern Ireland has even looked for it...until now.

Tenancy fraud wasn't coming up on the agendas of board meetings

at the Housing Executive or in housing associations.

No cases were being reported to me,

yet we knew from England and Wales that there was a huge problem.

It's the Auditor General's job

to make sure the taxpayer isn't taken for a ride.

'He was convinced the fraud was happening here, too.

'So he took the figures for England and Wales

'and came up with some startling conclusions

'about the scale of the fraud here.'

2,500 properties locally are illegally occupied.

That's equivalent to £200 million of housing stock.

The Auditor General says his estimate

of illegally occupied properties is conservative,

so the figure for the money being wasted

could climb to over 200 million.

For over a decade, Darran Keenan,

his partner, Sharon, and their three children

have been battling for a place to call home.

They are one of 40,000 households queuing up for a permanent home.

-We've moved 13 times in...

-The last 12 years.

-Yeah.

Families in the private rented sector

frequently have to take short-term lets.

In fact, a third of them move on in less than a year.

We moved into properties

and I've literally just finished decorating.

The wallpaper wasn't even dry and we've had to move out.

It is so stressful. You can't even...

I just feel physically sick whenever I have to move again.

There's a bungalow in Portstewart for...550.

And they'll soon be moving for a 14th time

as the landlord told them three months ago

they'll have to move out of their rented home in Castlerock.

We've been looking for a house since we were told at Christmas,

but there's just nothing, nothing the size we need.

Sharon developed fibromyalgia,

a condition that causes pain all over her body

and means that she is unable to work.

The couple have two boys - Ethan, aged 12 and Keith, eight -

and one girl, Kayleigh, aged six.

What's the worst thing about moving you hate?

Moving schools and not having any friends

because I can't have any friends because I make friends

and then I just end up leaving them and going away.

I've been in begging.

I've been round farmhouses,

begging farmers to let me live in their old abandoned houses,

just to have a home for my family.

I never thought this is where we'd end up 12 years ago,

still in the same position, still private renting

and moving from house to house.

Families who play by the rules

are being denied a home by those who cheat the system.

The biggest scandal

is when the fraudsters don't even use the homes they steal.

Dole drops are the classic example.

They use the address to access and cheat the benefit system.

This fraud has been around for decades,

but yet it has never been recorded by the Housing Executive

and they do have a duty to report all fraud to the auditor.

When I was going through my inbox last year,

I didn't have a single case of tenancy fraud reported to me.

So as far as the official figures went, tenancy fraud didn't exist?

Yes.

-That's astonishing, isn't it?

-It is quite astonishing.

So, with no proper records, how can we begin to uncover

the true scale of what has been going on?

We needed to talk to someone who has front-line experience

of dealing with housing scams.

In Derry, we found a man who used to have reports of suspected fraud

in his inbox nearly every day.

In the district I worked in, I managed 3,000 properties.

The maintenance officers used to come back to me

and they used to say, "Kevin...

"..there's nobody in these houses. What will we do?"

'Kevin Barrett spent 30 years

'working as a maintenance manager for the Housing Executive.

'He was unfairly dismissed

'as a result of matters not related to this issue

'and received a substantial settlement.

'This is the first time he has spoken on camera

'about the scale of the fraud he witnessed.'

You could see the properties that were not being properly lived in.

You know, you could see that the windows weren't...

There was condensation on the windows.

There were net curtains that were never opened,

post in the letter box, gardens that weren't kept.

While the social sector has been losing homes because of fraud,

private landlords have been cashing in on the housing shortage.

They've been busy filling up their homes

with those families on the waiting list,

and all at a massive cost to the taxpayer.

The rent is paid from the public purse

through housing benefit.

In England, 25% of private rented homes

are paid for by the taxpayer.

But in Northern Ireland, that figure is more than double.

Here, 60% of all private rented properties

is paid for with housing benefit.

It has fuelled the private rented sector

and it's certainly fuelled it in the last 10-15 years.

Paddy Gray is a professor of housing at the University of Ulster.

He says many private landlords

couldn't survive without housing benefit.

Many landlords would've said they relied

on housing benefit payments because, at the end of the day,

housing benefit is paid directly to the landlord

as guaranteed income, and it's steady income.

So what does propping up 60% of the private rental sector cost us?

Spotlight has discovered £250 million of public money

is going into the pockets of private landlords every year.

What are we getting for that £250 million?

The vast majority of private rented accommodation is fit for purpose,

but some tenants are ashamed of where they live.

Hello, how are you?

'Jean Kennedy and her partner and six children

'have been renting this house in Belfast for the last four years.'

-A bit of an accident here?

-No - that was like that when we moved in.

'As the four-bedroom house is in an expensive area,

'the landlord is getting £600 a month in housing benefit.

'While her partner took the kids to school,

'Jean showed me what they were getting for the money.'

What is happening up here?

When the weather gets really bad outside

and we get the really heavy rain,

that all drips down and it all comes down here

and goes into this bucket.

When is the last time you emptied that?

Probably just two days ago.

Have you told the landlord? Has he seen this for himself?

Yes, he's seen this.

He said he'd come out and fix it, but, as of yet, nothing.

He doesn't seem bothered by it,

to my knowledge.

He doesn't seem to do anything about it.

He'll say he'll come out and fix it, but nothing ever seems to happen.

'There's been steady progress

'on improving housing conditions here.

'But despite that, the last Housing Executive Survey

'found that, for the first time in over 40 years,

'there's been a rise in unfit dwellings

'in both the public and private sector.'

I don't think I've ever seen damp quite like this.

-It really is a serious problem, and in such a small room.

-Yes.

I try and clean it, but it just comes back again

so it's pointless.

Have you reported this, too?

This is something the owners are aware of?

Yes, uh-huh. They've seen the state of it.

And they're happy for their tenants to survive like this?

They must be, because they haven't bothered to fix it.

'The damp's partly because the boiler's broken

'and the family say they've been without heat for years.'

'Two of Jean's daughters share this single bed in the front room

'and the three boys sleep on a sofa and two mattresses next door.'

-Is there a draft coming through there?

-Yes, it is very cold.

I also think the mice come through there.

Well, you can see the holes.

The holes are big enough for mice to come through.

If you look behind...

Look at the stuff that's lying behind it.

You have bits of wall that's fallen off.

Is that a bit of masonry off the wall?

It really is a bit of a nightmare.

-It is. Are your boys happy to sleep in a room like this?

-No.

They ask me all the time can they bring friends back

and I say, "No, you can't."

Because of the shame of it all?

SHE SOBS

That's OK. Take a minute.

This is costing £600 every month

for the privilege of you and your family living in these conditions.

Uh-huh.

-£600 for this?

-Yeah - it's not worth it.

We spend £250 million housing people like Jean and her family

in private accommodation because the authorities say

they can't find a permanent home for them.

But is that really the case?

There are lots of empty Housing Executive properties

which could become homes.

And one reason we know that

is that we've spent an afternoon with this man.

His job is to travel around Northern Ireland

checking if houses are occupied.

He works for the electricity company, Budget Energy.

Empty homes on their patch cost them money.

It takes the same amount of resources to administrate

a house spending £5 a month

as opposed to a house using normal usage.

So it's a very expensive prospect for us

to have a lot of houses that are empty

as part of our customer base.

Today, he's working in Belfast.

Because he does a sensitive job, he asked us to protect his identity.

And within an hour we came across our first empty property.

It wasn't long before we found another one.

And, like the other property,

there's been little or no electricity used.

'We came across three empty Housing Executive properties

'in the space of a few hours.

'We don't know why they were empty,

'but two of them were registered as having tenants.

'So why couldn't they be used

'to house families on the waiting list?

'And how many more could there be out there?'

You've been doing this job for about three weeks.

How many vacant, empty properties have you come across?

About 170 - 160, 170.

-In the space of three weeks?

-Yeah.

I was actually quite shocked.

He discovered 170 empty homes

which looks like it's the tip of the iceberg.

While electricity companies have this information,

what's extraordinary is the Housing Executive don't.

What's more amazing is that they're not even allowed

to ask the electricity companies for these details.

Utility providers are now private companies.

So our ability to formally exchange

data-sharing provisions has changed.

Is it not as simple as picking up the telephone

and contacting them, saying, "Give us the list"?

Legally, it's not that simple.

What you're looking to do is share private information

about one individual with another.

So, that list of 170 empty properties

will remain beyond the reach of the Housing Executive

and all the while the real victims of tenancy fraud,

those families on the waiting list, are left in limbo.

Jean desperately wants to be rehoused.

She feels like she's slipped through the system as, officially,

her family aren't even on the waiting list.

An environmental officer inspected her home last year

due to concerns over rubbish and mice infestation.

We wanted to get an expert opinion on the damp and mould,

so we brought in our own environmental officer.

There's a lot of blackness in here, a lot of damp in here.

What's caused that?

Those, to me, are indicative of a condensation problem

and potential microbial growth - moulds, fungi -

growing as a result of damp conditions on those surfaces.

But it's the children's room that is the most concerning.

If it were me, I would be worried if I had children sleeping in here.

There are World Health Organisation guidelines

which highlight microbial pollution -

microbial pollution simply means indoor air

that's polluted with bacteria, fungi or moulds -

can be detrimental to people's health.

And we see evidence of that here?

There certainly, at a stage, has been microbial pollution in here.

'We did ask Jean's acting landlord about the state of the house.

'He says the family never asked to get the heating fixed

'and, now that he knows, he will sort the boiler out.

'He also claims that many of the problems in the house

'were caused by the family and their lifestyle.'

For Darran and his family in Castlerock,

the thought of having to move a 14th time is too much.

We're crying out for a home.

We desperately want a home for us and our kids,

to grow up in and be happy in.

The family are facing homelessness.

As another departure deadline looms, the strain is starting to show.

-TEARFULLY:

-I just can't cope any more.

The amount of stress that we're under as a family,

deep down, I'm hurting inside.

-SOBBING:

-Sorry.

It's just going to take one more thing

to finally put me over the edge

because it is getting like that.

It's just...where the system doesn't pick up,

then somebody picks up, you know?

And it's left to...

I have to try to smooth things over and make things right, and I can't.

Despite what you might think, when it comes to getting a house,

the homeless are not always top of the list.

Houses here are allocated on a points system.

The amount of points you get depends on your circumstances.

If you have to share a bath or a shower,

well, that's worth five points.

And if the house you're in is showing serious signs of disrepair,

like this, for example...

Well, that only gets you ten points.

And if you really want to rack up the points,

you need to be like our family in Castlerock.

They're about to be made homeless

and for that, they get an extra 70 points.

But even that won't guarantee them a home.

But the biggest mover in the points system,

the one thing which can catapult you right to the top of the queue,

leapfrogging even the homeless,

is intimidation.

That gets you 200 points

and we found several examples of that here in Derry.

When alleged threats are made,

the Housing Executive try to make sure they are not being conned.

But the stakes are so high,

they can't afford to make the wrong call.

When you get into a situation

where someone presents as being intimidated -

they've had a bullet through the post

or graffiti sprayed on the walls -

to them, the threat is real and it's live.

You've got to balance the risk with that family

about doing nothing and then suffer the consequences.

So we are on the cautious side.

Almost 1,800 people have been given a new home here

over the past five years because of intimidation.

It's on the increase, and last year alone

some 411 people were rehoused.

And we know that many of those threats

have been made by dissident republican paramilitaries.

But we've found out that two dissidents in Derry

have been given brand-new homes

after claiming they themselves were intimidated.

Normally, those under threat go to the police.

But not in these cases.

Instead, Rosemount Resource Centre helped verify the threats.

It's run by this man, Thomas McCourt.

The individual concerned

had been stabbed in his own bed, had been shot

by an individual with a pellet gun.

The other individual had been accused of being involved

in a particular incident locally.

We did our best to find out was there a serious paramilitary threat

and we couldn't ascertain that there was,

but there certainly was...

He was certainly in a considerable amount trouble.

Who's making these threats against dissident republicans?

Because the only paramilitaries operating in this city

ARE dissident republicans.

We can't ascertain the threats.

I have yet to find a threat to a dissident republican

which has been authenticated from a dissident republican organisation.

Some of those who say they're under threat,

they haven't moved that far away - they haven't left the city,

they've gone to neighbouring estates.

Surely if they feel under threat, they would move much further.

It's not up to me to dictate where people move or don't move.

But some believe this system is wide open to abuse.

You can imagine law-abiding, hard-pressed,

top-of-the-waiting-list applicants saying,

"Why should I go through all the normal protocols

"that are open to everyone else

"and a small number of people can bypass all this?"

"And if they fabricate an intimidation case,

"they can be allocated a property I should have."

I can understand the outrage and anger

that would exist among people like that.

What should we do? Go back to 1969, where you start saying

that we will assess people's politics before we help them?

Some people might say this is a handy scam to get a house.

Somebody knows you, comes to you, says they're being threatened.

-Lo and behold, they get a house.

-No. It's not a scam.

I'm not saying there mightn't be people out there

who may think, "This is a good idea, it might get me a house."

Look, you know, we're not naive enough

to believe nobody would do a thing like that.

But if you're asking is it some sort of scam,

as in an organised process which is recognisable,

which is used to get people housing, it's not.

Who does and doesn't get houses will always be an emotive issue,

especially when we're told there is such a shortage.

But there are those who see houses

simply as a way of conning the system

and making huge sums of money.

We've come across a scam

where loyalist paramilitaries are conspiring with rogue landlords

to cash in on the benefits system.

It's a guaranteed monthly income

with little chance of getting caught.

We found one landlord who told us how easy it is to scam the system.

He's concerned for his safety and so he asked us to protect his identity.

He bought a buy-to-let investment property

in the Village area of Belfast.

He was immediately on the radar of the paramilitaries

who controlled that patch.

Shortly after I was renting it out,

I was approached by someone I knew locally.

They told me that once a month, it would be better

if I would drop some money into a local pub, which I did.

-How much are we talking about?

-£40 a month.

What was that money for?

It was never really clearly stated by them,

but I think it was quite obvious by the approach that was made

that, if I didn't pay it, I wouldn't have felt that

the property would've been secure, or the people in it.

As a former police fraud investigator,

Alan McQuillan knows all too well our man had little choice.

In all these communities, you have people who will come along

and sidle up and demand that people do things.

And people get very frightened of that.

The landlord rented his property out to a housing benefit claimant.

But, even though the rent was being paid,

there didn't seem to be any sign of anyone living in his house.

I ask some questions, locally, as to what was going on.

It became clear this gentleman

was actually residing with his partner and child.

I was made aware that she was claiming single parent benefit

and housing benefit, as well.

To that extent, my property sat - in my mind, anyway -

for two years with no-one living in it,

but the state was paying me.

How much are we talking about?

How much benefit were you being paid for this empty house?

Em...it was about £300 a month. In and around that number.

But it was certainly enough to cover the mortgage.

'We've worked out that the landlord was paid £7,000

'from the public purse in housing benefit for an empty house.

'The landlord was getting his money.

'The paramilitaries were getting their money.'

'The only problem was it was all illegal.'

So, you, essentially, were cheating the system.

Did you not feel guilty about it?

Did you ever think, "This is wrong, I shouldn't be doing it"?

Try owning a house in the Village area and rent it

and not pay these guys - that would be a challenge.

The £40 a month the landlord was paying

may not seem significant.

But if a paramilitary organisation can get enough landlords to pay,

then, suddenly, it's worthwhile.

Stealing benefits in those areas, there is a large volume of it.

It's relatively easy to do, it's relatively low-risk,

and if you are caught

the amount of penalty you'll get from the courts

for an organised benefit fraud

is probably significantly less than you will,

for example, people trafficking, prostitution or robbery.

So, on all fronts, it is seen as a low-risk crime.

But the situation for our landlord was about to dramatically change.

When his fake tenant moved out,

the paramilitaries came round with a new proposal.

I was approached by people

that I believe I was paying the protection money to.

They told be the person I would be renting the house to

wouldn't be living in it and that they would be subletting it.

And was I happy with that?

The paramilitaries were now after more than just protection money.

The landlord's rent would still be paid

through the housing benefit scam.

But now the paramilitaries

wanted to sub-let his home for cash and take the money.

I became very nervous and said I wasn't willing to do that.

The problem is I felt I was being sucked into something

I really didn't want to be sucked into.

I therefore made a decision to sell the property.

'This is the first time he's come clean

'about his dealings with paramilitaries.'

To some extent, I want to report this.

Who do I report it to?

Reporting fraud presents huge challenges

in Northern Ireland.

But it is still incredible

that there has never been one reported case

of tenancy fraud here.

It just was completely under the radar.

There was no proper strategy

for actually dealing with tenancy fraud.

One of the recommendations in our report

will require housing associations and the Housing Executive

to prepare dedicated counter-fraud strategies for tenancy fraud.

After 40 years in existence,

the Housing Executive has only now published

its first ever dedicated tenancy fraud strategy.

-Tenancy fraud.

-Yes.

-Is it really a priority for the Housing Executive?

-Absolutely.

We place huge store in our approaches in terms of

making sure that people who are living in our properties

are the people who are supposed to be living in them.

That's all very well but, looking at the recent Auditor's report

into tenancy fraud in Northern Ireland,

it is pretty clear to him that the Executive

isn't really treating this as seriously as it should.

For instance, the strategy you're devising now

is only a recent thing.

Given that this is the biggest fraud across the water in social housing,

it seems that you are only now sitting up and taking notice.

We were producing our own strategy at the time of that report.

That's not to say there aren't things we should do.

As a result of both the Audit Office report

and our own investigations into best practice,

we're introducing things like photographic evidence.

We'll do random visits in the first year of tenancy

to determine those people are there that should be there.

The housing associations,

who are the other big landlords in the social sector,

have also put plans in place to deal with fraudsters.

The sorts of things members are doing include tenancy audits,

making sure that the people occupying properties

are the rightful tenants,

also doing follow-up visits perhaps four or six weeks into the tenancy

to ensure that the tenant is actually occupying

and using the property as they should.

The Housing Executive has had some success in reclaiming empty homes.

This Housing Officer is about to serve notice

on one of the 800 homes that's been recovered in the last five years.

But if they found 800 houses without actively looking for them,

how many more empty homes could be out there?

The Auditor General believes at least 2,500 homes

are being taken up by fraudsters.

That's around 2% of the total social housing stock.

But, according to the former maintenance manager, Kevin Barrett,

who spent most of his life working for the Housing Executive,

that's just the tip of the iceberg.

I would have thought at least 15%-20% of the properties

were either dole drops

or weren't being properly lived in as a family home.

That's pretty shocking.

It is, but I mean,

you become immune to it when you live with it.

It becomes normal.

So, if Kevin Barrett's figures were to be correct,

then as many as 18,000 homes could be occupied by fraudsters.

That would be enough to drastically cut the waiting list.

I don't think there's a housing crisis.

If the Housing Executive would follow up empty homes,

people that aren't living in them and housing benefit fraud,

I think the housing crisis would go.

This is the view of one former Housing Executive manager.

But a current manager has told us

that tenancy fraud is a major problem.

But the Housing Executive completely disputes these figures.

They say...

But the fact is there is no evidence of tenancy fraud

anywhere in Northern Ireland

because the Housing Executive didn't record it.

We don't know if Kevin Barrett's figures are accurate,

but he did spend almost 30 years on the ground

working for the Housing Executive, inspecting thousands of properties.

One thing we do know is that we came across a man

who found 170 empty houses, including Housing Executive homes,

in the space of just three weeks.

Might it be the Housing Executive

hasn't properly addressed this in the past

because they might not have liked what they found?

Don't accept that. I wouldn't accept that at all.

The Housing Executive has never shirked its responsibility.

We've always been at the forefront of trying to do the right thing.

But why didn't you do it ten years ago?

When looking in hindsight, with 20/20 vision,

you know you should do things earlier.

The point I'd make is, yes,

we should've done things sharper ten years ago.

We're doing it now.

That's empty - somebody used it all.

There's some in that.

I would love to see myself in a nice house with heating,

for the kids to be running about, happy,

and have somewhere to play and do things

and not having to live in these conditions.

Jean and her family

are now considering returning to Scotland.

Last week, Darran was informed by the Housing Executive

that, as he failed to tell them in time

he still wanted one of their homes,

he and his family have been removed from the waiting list.

If we have to move out of this area, they'll have to move school

and everything will be up in the air again.

As the families face an uncertain future,

the housing authorities prepare

to implement their new anti-tenancy fraud strategies.

But putting down a good plan on paper is one thing.

Actually knocking on doors

and asking the difficult questions is another.