Challenging service charge inaccuracies is a long, bitter annual struggle for housing association tenants and residents. The process appears to be designed to confuse, wear down, and frustrate any attempt at scrutiny, even though the service charge bills are often for hefty payments that households are obliged to make, even when they know they are wrong.
Trying to address the erroneous, fictitious and fraudulent service charges alone is time-consuming, extremely frustrating and sometimes futile.”Ella*, Hyde Housing tenant
After the service charge statement drops onto the doormat, the householder must jump through a series of baffling and exhausting hurdles in their attempt to find out what the charges are actually for. Scrutinising invoice packs (if you can get them) can be an agonising process that raises more questions than it answers, and landlords stridently resist recognising or addressing inaccuracies
Following the Money
On the 12th April, SHAC, Find Others together with an affected resident met with the National Audit Office (NAO), who are responsible for investigating government spending.
Housing associations collect around £1.5 billion in service charges according to the Regulator’s Global Accounts. The rents and service charges of roughly half of all tenants is paid directly to housing associations through the benefits system.
Evidence gathered by SHAC over the years, and more recently by the FindOthers campaign, has shown a scandalously high level of service charge overcharging by housing associations. The evidence has however come from those who pay their rents and service charges directly to the landlord, not through benefits.
Our argument to the NAO was that if it is happening to one group of tenants and residents, it is safe to assume that it is happening to all.
The Merry Money-Go-Round
All too often tenants and residents highlight apparent collusion between landlords and sub-contractors or less scrupulous managing agents to super-inflate charges. One tenant explained:
Emergency lighting testing and maintenance are among the biggest rip-offs. On my estate, it takes one sub-contractor less than a day to carry out monthly emergency lighting tests. He’s paid £120 a day by his company.
“The company invoices the landlord, which then bills residents, but somehow residents end up being charged nearly £3,000 per day.”
The block referred to has 91 flats, but the same company covers several estates for the same landlord. In the tenant’s words, “Multiply that up by the number of properties that fall under this contract, and the numbers become positively eyewatering. Totally obscene”. Another concludes “Obviously, contractors can’t away with this without the collusion of the Housing Association”.
Many such examples have been reported to SHAC.
Justice Out of Reach
On the basis of our findings, we presented a powerful argument for the NAO to launch an investigation into how government money is being misused by housing associations. We provided evidence to show that millions (if not billions) of pounds of taxpayers’ money is being incorrectly diverted into the pockets of housing associations via incorrect service charges.
Some of the cases highlighted by the campaign were featured on the BBC
FindOthers presented the data collected on the campaign platform. One resident had successfully reclaimed £318,000 for residents in his building via first tier tribunal. He represented himself, but had been quoted £45,000 by law firms. This underscores how unattainable justice through thecourts has become for many victims of service charge abuse.
The majority of people do not have the funds, skills, time or confidence to mount a legal challenge on incorrect service charges. As a result, housing associations feel free to disregard their legal obligations.
Ample evidence has been gathered through the campaign platform. Over 250 people have used the tool to request a breakdown and/or invoice pack. So far, over a quarter have received no response at all within the legal timeframe of 30 days, and only 1.2% received a satisfactory response.
Most staggering of all, over £2 million worth of overcharges have been reported by just 27 people.
The FindOthers campaign platform has systematically recorded service charge abuse by housing associations as well as helping tenants and residents request the information they are entitled to, or escalate a complaint if it is not provided.
This is not just evidence of widespread service charge abuse, but an argument that some housing associations have completely lost touch with their roots as social housing providers, seeking only to profit from their residents.
The NAO left the meeting keen to explore how they can look into this issue.
Our priority now is to apply pressure to the MP’s who oversee the NAO’s work, to ensure it becomes their priority too.
* Not her real name
We Now Need Your Help
We need people to show support for this investigation and encourage the MPs that sit on the select committee for the NAO to back this investigation. You can see the committee MPs listed below.
If you live in any of the MP’s constituencies, you can email them directly urging their support. They are far more likely to take notice of your email if you are one of their potential voters. You can find your local MP by visiting Find Your MP.
Either way, please take a minute to message them on social media
Social Media Message:
I support an investigation by @NAOorguk into how ££££ millions of government money is being abused by housing associations via housing benefits. Help us #EndServiceChargeAbuse by championing this at the next Public Accounts Commission meeting. @findothershq @HAWRNet @ActionShac
Dear [name of MP]
I am writing to you today in your capacity as a committee member of the Public Accounts Commission. I encourage you to support the End Service Charge Abuse campaign’s call for the National Audit Office (NAO) to investigate housing associations and their fraudulent receipt of public money.
I believe that there is a strong case for an investigation into this issue. Housing associations receive millions of pounds of public money each year, and it is essential that this money is being accurately collected. There have been a number of cases of mismanagement and misuse of public money by housing associations.
I am particularly concerned about the way in which housing associations have been charging service charges to tenants who receive housing benefit. These charges are supposed to cover the cost of maintaining and running the properties, but there is widespread evidence that they are being intentionally inflated to bolster surpluses. This is a misuse of housing benefits, and I urge you to investigate this issue.
It is in both the public interest and your interest to ensure that public money is not being fraudulently pocketed by housing associations, to the detriment of taxpayers, local authorities and the entire social housing system. Therefore, I urge you to support our call for an investigation at your next Public Accounts Commission meeting.
List of MP’s who sit on the committee
- Conservative MP for South Norfolk
- Email: firstname.lastname@example.org
- Twitter: https://twitter.com/richardbaconmp
- Conservative MP for Stoke-on-Trent South
- Email: email@example.com
- Facebook: https://www.facebook.com/jackbreretonforstoke/
- Conservative MP for South Cambridgeshire
- Email: firstname.lastname@example.org
- Twitter: https://twitter.com/ab4scambs
- Scottish National Party MP for Glenrothes
- Email: email@example.com
- Twitter: https://twitter.com/petergrantmp
Dame Meg Hillier
- Labour (Co-op) MP for Hackney South and Shoreditch
- Email: firstname.lastname@example.org
- Twitter: https://twitter.com/Meg_HillierMP
- Labour MP for Washington and Sunderland West
- Email: email@example.com
- Twitter: https://twitter.com/SharonHodgsonMP
- Conservative MP for Broadland
- Email: firstname.lastname@example.org
- Twitter: https://twitter.com/jeromemayhew
- Conservative MP for Portsmouth North
- Email: email@example.com
- Twitter: https://twitter.com/PennyMordaunt
13 April 2023
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