Landlords pocket £160m of tenant benefits

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Almost £160m of housing benefit has been dished out to private landlords in just 12 months by district councils in Lancashire.

A dozen Town Halls across the county all handed over seven-figure sums to help pay the rent of 36,000 hard-up tenants, according to latest figures.

The owner of one letting company which collected nearly £240,000 in housing benefit from Preston Council on behalf of its tenants in 2013/14 said private landlords provided an essential service.

“We aren’t doing anything wrong,” said David Ashcroft, owner of Lancashire Lettings.

Private landlords pocketed almost £160m in housing benefit from Lancashire councils in just 12 months, it has been claimed.

Local authorities including Preston, South Ribble, Chorley and Lancaster each doled out seven-figure sums to keep a roof over the heads of more than 36,000 needy tenants in private rented accommodation, says a new report.

The news coincides with a survey published yesterday by the Citizens’ Advice Bureau which revealed an estimated 16 per cent of private rented properties are unsafe to live in - many of those subject to housing benefit.

A union boss has called for an end to the system which nationally puts more than £9bn of taxpayers’ money straight into the pockets of landlords, some of whom are amongst the wealthiest people in Britain.

‘’The abuse of housing benefit by private landlords has gone on far too long,” claimed Paul McCarthy, the GMB general secretary.

But one landlord, David Ashcroft, whose company Lancashire Lettings received almost £240,000 from Preston Council during 2013/14, hit back, saying: “We aren’t doing anything wrong.

“Housing benefit used to be paid to the tenant and then they were expected to pay the landlord, which didn’t always happen. Now it is paid to the landlords direct. We are providing a service, trying to help people on housing benefit to get housed. Landlords might not want to take on tenants on housing benefit if there wasn’t a guarantee they would get their rent.”

Figures show almost half of Lancashire’s 75,000 private tenants claim housing benefit to help pay part or all of their rent. The total amount handed to private landlords by councils in the county on behalf of the Government came to £159.82m in 2013/14.

Lancaster topped the table for the largest amount paid out, with £24.38m on behalf of 5,275 private tenants. Wyre came second with £19.26m to cover rent for 4,353.

Preston dished up £16.77m to help 3,713 of the city’s 10,365 private tenants. The bill in Fylde was £12.36m, in West Lancashire it was £9.84m, Chorley paid out £8.74m, South Ribble £7.69m and Ribble Valley £3.17m.

Critics of the system say wealthy landlords are lining their pockets with Government cash while charging over the odds and providing basic, sometimes inadequate, accommodation to people on benefits. But the cash doesn’t just go to profit-making individuals, as the top 20 beneficiaries in Preston show in the report compiled after a Freedom Of Information request.

It is claimed the top earner in the city for 2013/14 was a charity called Methodist Action (Place to Live) which collected £297,691. Lancashire Lettings are said to have come second with £238,787, with private individual Mr A F Towey third on £179,515. The figures show another charity, Emmaus,received £170,463 and Methodist Action (North West) was paid £113,787.

In South Ribble Methodist Action (North West) was the top earner on £57,972, followed by Integrate (Preston and Chorley) Ltd with £49,664. In Chorley the report reveals the top beneficiary was the charity Mind on £149,277.

Richard Lambert, CEO of the National Landlords’ Association, said: “Landlords should not be vilified for letting to tenants on housing benefit as this will only exacerbate the housing crisis and increase cases of homelessness and poverty. Government must ensure taxpayers are getting value for money and that money isn’t going to criminal landlords.”