Local authorities have welcomed Government measures to prevent housing fraud and to boost confidence that social homes are being allocated fairly. New guidance makes clear that the priority must be given to people in the greatest need for housing but it also strengthens councils’ freedom to react to specific local needs.

The move was welcomed by the Local Government Association which said it would support councils in their ongoing work against fraud and to ensure that people in council housing had the right to live there. “Councils are best placed to decide how housing is allocated in their area and are committed to ensuring that the system is fair, and seen to be fair, “ said Paul Bettison, the LGA spokesman on housing.

He said a crackdown on subletting would release council houses for people who needed them but it would not solve the problem of housing shortages. “Demand for council housing massively outstrips supply. It is good news that the Government will consult on major reform of council house finance,” Councillor Bettison added.

The Housing Minister, John Healey, said the guidance was part of the pledge to improve access to housing by giving councils a bigger role in meeting the needs of people in their area and clamping down on tenancy cheats.

The draft guidance also underlines the need for local authorities to tackle myths and misunderstandings about housing allocations, by doing more to inform people about who is getting housing and to consult tenants and residents when setting their local priorities. The anti-fraud initiative is being supported by the Audit Commission, National Housing Federation, Chartered Institute of Housing and the Tenant Services Authority as well as the LGA.