|The oldest swindlers in town
They fought for king and country, raised families and worked hard for most of their adult lives. Now, many of them are swindling thousands of pounds in housing benefit. It is almost heresy to criticise pensioners. That is why they have such an advantage if they decide to cheat the system. After all, what local council is going to risk taking them to court? Accusing grannies and grandads of fraud is hardly a vote-winner.
The scale of the problem came to light while I was researching a television documentary, when officials described the difficulty of combating pensioner fraud.
Take Liverpool. A few years ago, city council officials discovered they had overpaid nearly £1 million of housing benefit to hundreds of senior citizens who had failed to declare occupational pensions. In many cases, their rent was being paid for by the local taxpayers when, either through fraud or error, they clearly weren't entitled to support. Scores of those who were defrauding the council, either knowingly or unintentionally, were questioned under caution. At which point, according to fraud manager Bernie Davies, "all hell broke loose".
"Pensioners' groups, solicitors, local newspapers were all demanding to know why we were treating pensioners in this way. Resignations were called for and we were accused of acting disgracefully. Thankfully, the councillors backed us up."
Only a handful of those elderly cheats were ever prosecuted and nowadays, in Liverpool at least, anyone over the age of 65 is no longer questioned under caution. But, as the negative publicity began to fade away, there was one unexpected side-effect. Many pensioners who hadn't originally been suspected came forward to confess. Yes, they too had kept quiet about pensions and hidden reserves of capital. And could they please now repay the benefit they had been falsely claiming?
More than £10 billion of housing benefit is paid out by local councils each year to help one in every seven householders with their rent. The Government has pledged to cut fraud by a quarter by 2006 but that, as the National Audit Commission recently pointed out, is not going to be easy because no one knows exactly how much fraud there is. Some estimate that it could be as high as £1 billion a year, with pensioners responsible for about a third.
"I've interviewed a lot of pensioners," says fraud consultant Malcolm Gardner, "and, take it from me, they can be as wily as they come. If they are under suspicion, they often either pretend not to understand or turn up with a solicitor."
Before setting up his consultancy, Mr Gardner worked as a local authority investigator in Reading and York. Although he dealt with a lot of honest pensioners, others were adept at exploiting the system. He particularly recalls telling one elderly couple that they had too much capital to qualify for housing benefit (anyone with more than £16,000 is normally ineligible).
"A few hours later they returned having bought a new car, which took their savings just below the limit," he says. "Under the rules, if it had been a Ferrari or something equally extravagant, they could have been refused for 'deprivation of capital'. But, as it wasn't a luxury car, there was no reason to deny their application."
There is bending the rules and then there is what one sentencing magistrate called "a gross breach of trust". He was talking about a pensioner from Fareham in Hampshire who was chairman of the district council's planning and development committee - a position from which he was forced to resign when he was caught swindling his own council out of housing benefit and council tax relief. Liberal Democrat councillor Hugh Pritchard failed to declare two private pensions and was fined £300 after repaying the £1,200 he had fiddled.
But only about one in 400 of those suspected of housing benefit fraud are ever taken to court. Although investigators now have greater powers to check personal financial details, they also have to work within increasingly robust laws on human rights. Meanwhile, the Government is trying to persuade us, through an advertising blitz which has so far cost £14 million, that we should shop colleagues and neighbours whom we suspect of fraud. As well as a national hotline which fields 4,000 calls a week, most local councils have their own websites and telephone numbers dedicated to those who wish to inform.
Mr Davies says he is sure that most fraud managers would welcome much greater access to information and, in particular, more co-operation from the Inland Revenue to check claimants' savings. "Although we are no longer thought of as a soft touch, in many areas our hands are still tied."
In Liverpool's most recent check-up, investigators found that 3,500 people receiving local authority pensions were also claiming housing benefit. Some poorly paid former workers, such as dinner ladies, will be claiming legitimately, but others won't. Almost a third were more than 90 years old.
Mr Davies warns that in some cases cheats will be pursued beyond the grave. "Council tax records will tell us when someone dies and if they have been falsely claiming, we can try to recoup money from their estate."
James Trollope's 'Cheats and Spies' was screened on ITV Meridian.