Leicester Council despairs of £9.5m housing benefit debt

Most of this is said to be due to error rather than fraud. (h/t David)

City council bosses have written off nearly £3 million of debt resulting from people in Leicester being paid too much in housing benefits this year.

Officials say they will not be able to recover the overpayments from benefits recipients in low-income households.

The overpayments are largely down to errors, where claimants should have told the council about changes to their circumstances that affect their entitlement to payments, rather than fraud. They can tell the difference? The authority's finance director Alison Greenhill has told councillors £2.8 million has been written off this year and the council still has on overall £9.5 million of overpaid housing benefits due which has built up "over many years".

Ms Greenhill told members of the city council's overview scrutiny committee:

It's a big issue and the majority of this is claimant error. Some of it is local authority error. It's a very difficult one. It is the most difficult one to collect because – when we are aware of an overpayment – the benefits recipients are on low income. We can't go in and say to them, 'We have given you £300 you shouldn't have had so we are not going to pay your housing benefits for the next three weeks'. We can't do that.

Ms Greenhill said most of the overpayments were down to residents not telling the council of changes to their circumstances that affect their entitlement to housing benefits. Not fraud, then.

She said the key was to make it easier for claimants to inform the council of matters that alter their entitlement.

She said it was unlikely the total £9.5 million outstanding would ever be fully repaid, but added:

Don't assume £9.5 million is something we are doing nothing about. What we have got in place for a lot of that are attachments to benefits or attachments to earnings, so where people have previously received benefits they were not entitled to they repay at relatively small amounts each week.

Ms Greenhill told the Mercury the written off £2.8 million was a small proportion of the £135 million the council pays out to housing benefits claimants each year. She also stressed it was a sum "not untypical for similar-sized councils in large cities across the country". She is saying most councils have this sludge of old, uncollectable debt?

Housing benefit is largely Government money administered by the council. No. The government doesn't have any money. It was taxpayers' money, yours and mine.

Councillor Baljit Singh, chairman of the council's scrutiny finance task group, said:

The issue of concern is overpaid housing benefits. It appears, in 2014 we have overpaid to the tune of £2.98 million. That is a significant, although it is perhaps two per cent of the collection of debt. When you come to write off debt, it's this area that impacts the most. It is a very difficult one.

"Two per cent of the collection of debt"? What's been happening at Leicester, then? What has the council's scrutiny finance task group been up to all this time?