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Page last updated at 07:59 GMT, Wednesday, 4 May 2011 08:59 UK
Tracking down England's council house sublet cheats

Gurnhill family, Sheffield
Mandy Gurnhill has been on a council housing waiting list for 15 years

Nearly five million people are on waiting lists for social housing in England because of a shortage of council homes - a wait made worse by council properties being unlawfully sublet at a cost to taxpayers of £1bn. Richard Bilton reports.

The house never gets quiet. The main room is never empty.

The Gurnhills are a family of nine living in a three-bedroomed terrace.

Mandy Gurnhill is at the centre of the family. She has her six children, her niece and sometimes her partner all living under her roof.

"You know it drives me insane, this house," she told me.

They are making money on the back of the government helping them by giving them a council house in the first place
Paul, council housing inspector, on unlawful sublets

The family lives in the Foxhill area of north Sheffield but Mandy does not want this place any more.

She goes on the computer regularly to check the database of available council houses and makes a bid for any newly available four bedroom properties.

She has been on the waiting list for a bigger home for 15 years and has never come near to getting a new place.

"They can't expect us to live like this. Every time I've looked and checked it's always said priority applicants. So if we're not priority with how many are living in this house, then what do they class as priority?"

Homeless, desperate

The problem is that Sheffield - like most of the country - is running out of council homes.

There are 93,000 households on the waiting list here - that is 40% of all the households in the city. So to get a new place you have to be classed as a priority or have been on the list a long time.

It is the same story across much of the rest of the country. Generally, only the homeless and those in urgent need can expect social housing.

It was not meant to be like this. Sheffield was one of many cities that benefitted from an enormous boom in council house building in the 50s and 60s.

Panorama logo
Richard Bilton reports Council Houses: Cheats and Victims
BBC One, Wednesday 4 May

"A decent home for all at an affordable price" was the ideal that underpinned the shift from slums to shiny new council houses in post-war Britain.

Hills and valleys were transformed into modern new estates.

A grainy film made at the time captures the excitement. Over shots of the new estates a plummy narrator announces: "Outworn residential areas have been replaced by modern dwellings."

So what changed?

Well, in part it is down to one of the most popular political ideas of the last 30 years.

"Right to Buy" was a flagship policy of Margaret Thatcher's Tory government. The public loved it and 2.5m families in council houses bought their homes.

Disappearing stock

Successive Labour and Conservative governments kept the policy in place.

And at the same time as council houses were being sold, others were being knocked down as part of regeneration schemes. What went was never replaced in anything like the same numbers.

In 1971, Sheffield council built 2,000 new homes. Last year it built just 83.

Thirty years of disappearing stock has left us with a housing crisis.

When there is a housing shortage there is also a black market.

More than 170 miles south in London, housing fraud investigators Paul and June are about to start a round of checks. Their job is to catch the cheats.

"These people normally get a council flat because they're in desperate need of housing," Paul, who we are only identifying by his first name, told me.

But, he said, when they get a job or their circumstances change they decide to cash in.

In the smart boroughs of London, social housing properties can fetch five times more rent on the open market than the council tenants pay for them.

"They keep the council flat and then they rent it out to other people. So they are making money on the back of the government helping them by giving them a council house in the first place," Paul said.

Richard Bilton, Panorama reporter
Richard Bilton spent a night sleeping on the Gurnhill's living room floor

It is called subletting, it is unlawful and it keeps thousands of houses and flats away from people who really need them.

Paul and June are on their way to a council flat where they suspect the woman living there is not the registered tenant.

"Good morning. We're from Kensington and Chelsea council. We've come to do a residency check."

The door opens and a woman allows them in. She is friendly but a bit vague. She cannot prove her identity and stumbles when asked her birth date. In the end she tells the investigators that she is the tenant's sister.

"I'm looking after the flat for two weeks for her. She's gone away to Cornwall but she'll be back next Thursday. I'll get her to ring you."

Back of queue

Paul and June thank her and leave. They plan to follow up with a few checks back at the office.

"The lady we saw this morning, she seems to be registered at the address since at least 2006 by the looks of things," Paul said after making further checks. "Looks like she's got credit cards, mobile phones, mail order companies, bank accounts all registered at that address."

The investigators plan to call in the tenant for an interview. Both the tenant and the woman who opened the door deny that the flat was being sublet.

But whether money has changed hands or not, this work of Paul and June matters because the country needs all the council homes it can get at time when Britain is running out of social housing. So far this year, they have recovered 28 properties.

In England alone, available research shows there are five million people on the waiting list. Those at the very back of the queue are the young.

Back in Sheffield, the Gurnhill family is getting ready to bed down.

Council flats, London - file pic
The 2010 Spending Review detailed big cuts to social housing budgets

Nine people in a three bedroom terraced house takes a bit of work. Everyone shares but there is still not enough room.

For Kevin, 21 and his brother David, 19, the sitting room is about to become a bedroom.

"Me and my brother have got to waiting until they go up so if we get tired early on, then we'll have to sit around yawning."

There are 650,000 families across England living in over-crowded accommodation, 250,000 of them in social housing.

The housing crisis may not grab headlines but it is changing the nature of our families. The young stay at home longer because they have nowhere else to go.

"We've been trying to get our own place. We're on a waiting list but we've had no offers or anything," Kevin said. "We just can't get our own place."

And for Mandy, their mother, it is hard to watch her kids trying to live in a house that never rests.

"It's not fair on the boys. Definitely not fair on them but I'd rather see them on my settee than on street. The boys don't get a break."

After I left the Gurnhills I contacted Sheffield council - they said Mandy had not kept them updated with who was living at her house.

Kevin, David and Mandy's niece have now been reclassified as priority for social housing. With her household size set to be reduced, Mandy said she is happy to stay in the house she has.

But this is not the social housing dream as envisioned. Homes for the deserving are now offered only to the desperate.

Panorama's Council Houses: Cheats and Victims, BBC One, Wednesday, 4 May at 2100 GMT and then available in the UK on the BBC iPlayer.

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