£1m council home sparks review of housing benefits

Work and Pensions Secretary James Purnell ordered a complete overhaul of a system that allowed single mother Toorpakai Saiedi and her seven children to move into the property at a cost of £12,000 a month.

He demanded a full report from Ealing council, which housed the family in July, and vowed to close loopholes that enabled Mrs Saiedi, 35, to receive £170,000 in benefits.

The move came as the three council employees sacked over the debacle revealed senior housing benefit officers gave the go-ahead for the family to have the seven-bedroom Acton home.

The former staff also told how the council department had the authority to cap the £150,000-a-year rent, yet approved the claim with no questions asked.

David Lewis, 37, who was manager of the department instructed to house the family, is furious that he and two colleagues have lost their jobs.

He added that the council had frequently approved moving families into five-bedroom homes, costing the public £50,000-a-year.

"The housing benefit department have the authority and the power to reduce the rent paid out by the council," he said. "They can choose to cap it they feel it is too high. The tenant's claim has to be assessed by them. On this occasion, they did not do that."

He added: "We have frequently placed families in five-bedroom houses and the cost to the taxpayer comes up to around £50,000. These are always approved as long as the family meets the relevant criteria. The astronomical amount is never questioned."

Mr Lewis, from Balham, south London, was sacked on Wednesday with Gemma Calliste and Salma Khan. The three, on temporary contracts, said that they had been made scapegoats after the story was leaked.

The Saiedi family had been referred by the homeless persons unit and the council was required to find a property from a private landlord within rent guidelines set by government agency Rent Services.

The council said the employees were sacked because it was "consolidating' its housing department.

A shocked Mr Purnell said: "It was never intended that the local housing allowance should result in a payment of this magnitude.

I have already asked my officials carefully to examine this issue as part of our current review of housing benefit."