Derby City Council write of £50,000 debt owed by benefit fraudsters

Ranjit Banwait, leader of Derby City Council.

Almost £50,000 of debt owed by individuals who fraudulently claimed housing benefits is set to be written off by Derby City Council.

A report on the matter drawn up for the authority’s leadership states:Recovery efforts through our rigorous bad debt recovery procedures have now been exhausted. That included unsuccessful referral to debt collectors and the identification of no ongoing benefits from which to make recovery.”

The three debts date back to 2009, 2012 and 2013. Asked for more information, a council spokeswoman said: “We cannot comment on individual cases. Lessons have been learned and we have increased checks to minimise future issues and overpayments.”

The authority is set to write off just over £70,000 in debt owed by five people – including the three involving fraud.

A fourth case, dating from 2013, involves £10,686 being written off because the report says it is “irrecoverable debt due to council error”. It states: “We do not feel it is reasonable for the claimant to have realised they have been overpaid.”

The fifth, for £11,748, is one in which the council cannot trace the debtor, but it has said it will go after the cash again if they are found.

Ranjit Banwait, leader of Derby City Council.
Ranjit Banwait, leader of Derby City Council.

Council leader Ranjit Banwait said overpayments needed to be recovered in a “fair and responsible way, taking into account individual circumstances”.

The Derby Telegraph reported in December last year that, between April 2012 and that date, errors and fraud meant more than £8 million had been wrongly paid to city residents.

The new report states that, in the eight years from April 2005, there were overpayments worth about £5 million for the same reasons.

The figure of more than £8 million included £5.8 million in claimant error, £1.3 million due to fraud, and £1.2 million due to errors or administrative delays at the council.

The council spokeswoman said: “Derby’s overpayments rate is much lower than nationally and our overpayment recovery rate is significantly higher. The sums look large but the amount we pay in housing benefit is huge, so the amount we overpay is relatively very small.”

Mr Banwait said: “We always try to be as efficient as possible but, if put into context of the volume of [housing benefit] applications that local authorities deal with, the overpayments are relatively small in comparison.”

The council administers housing benefits on behalf of the Department for Work and Pensions, which reimburses it using public money. But the authority says the amount does not cover the total cost.

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