INCOME MANAGEMENT –
WHAT’S ALL THE FUSS?
Eamon McGoldrick
Managing Director NFA
Objectives of the Presentation

Outline challenges facing Income Collection
Managers
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Describe the likely impacts for Social Housing
Landlords

Present some of the lessons learned and
suggest how to prepare for the future

Stimulate discussion and debate
Welfare Reform - Context

Making revenue savings for Government

Simplifying complex administration

Reducing dependency on Welfare State
Increasing employment
Reducing under occupation
Meeting expectations of “general public”
Many changes have cross party support
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Welfare Reform – Changes and
impacts

Under Occupation Subsidy (Bedroom Tax)
NFA Welfare Reform Survey
(up to March 2014)
- Households affected down(12.6% to 10.0%)
- London 5% - North 13%
- 6% of households have downsized
- Income collection impacts vary
- Voids - an unintended consequence
Welfare Reform - Changes and
impacts

Council Tax Support
- Government makes 10% saving and
Council’s decide where the cut falls!
- Council Tax now most common debt (CAB)

Benefit Caps
- low numbers but high impact for individuals
and landlords
- 19 of 20 most affected Councils in London
Welfare Reform - Changes and
impacts
Universal Credit
 The biggest challenge!

Move to on-line services critical and inevitablecross party support

Tenants to take more personal responsibility –
“surrogate wage”
Tenants to get increased awareness on rents
and associated services

Universal Credit - What do we
know?

The programme to roll out UC is behind but
rolling out
Demonstration Pilots providing useful insight
Income collection takes a hit early on then
levels out or rises (but not higher than start)
Collection rates vary 91% to 97%
Average collection 94% from a low of 92%
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Switchbacks at 17% but as high as 35%
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UC – What do we know?
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Switchbacks / clawbacks cover amounts paid
and frequency. They are also temporary
Social Landlords will be notified when a UC
claim is made (since 13/2/15)
DWP has published a Landlord Support pack
DWP piloting Local Support Services
Framework
Headline impacts for Landlords

Traditional Income collection models obsolete

This is about culture change

No more Council HB Services – DWP is King!

Business Plans - new risks but get used to it!
Headline impacts for landlords

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Costs of income collection will increase
- cost per property up 6% 2011/12 to 2012/13
- £19m additional costs ( Housemark report)
Increased costs and loss of income not risks to
Government
Tenants will be left with residual debt
Landlords must look at data they collect and
support services they offer
What do landlords need to do?
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Completely rethink approach to income
collection – this is a “whole organisation” issue
New skill sets required
No longer just about mechanistic arrears
collection
More “door knocking” and getting to know
tenants
Out of Hours contact vital
More data collection – mobile phone numbers
to be checked on every contact
What do landlords need to do?
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Get used to a 2 tier system (new claims on UC)
Decide on weekly / monthly rent charges
Maximise direct debit payment options
Encourage tenants to pay one month in
advance
Put support teams in place for more in depth
financial and digital inclusion work
Put in place efficient processes to identify risk
and process APA’s and Switchbacks
What do landlords need to do?

Review accuracy and usefulness of your data

Identify those at risk and who will need support
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What will your offer of support look like?
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Which Partners are you going to work with?
Challenges and Unknowns!

When will UC be fully implemented?

Some valuable learning, but total impacts won’t
be known for years to come

Will new Government in 2015 change anything?
General Election Impacts

Public Finances will remain under pressure

Bedroom Tax to be scrapped?

Universal Credit will stay but could be reviewed

Most of this Presentation will still be relevant!
Summary

Welfare reform will continue and is here to stay

UC is the biggest challenge to landlords
UC does present some unique challenges and
not all fully resolved

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Need to get used to less income, more arrears
and higher collection costs
Landlords need to change approach but should
be doing it already
NATIONAL FEDERATION OF ALMOs
Website: www.almos.org.uk
Email: [email protected]
Twitter: @almos_nfa