REPORT ON RENT
ARREARS
CONTROLLING AUTHORITY: Scrutiny Panel
ISSUE NO: 1
AMENDED:
STATUS: LIVE
DATE: DECEMBER
2012
Background
The Panel decided to review the process of rent collection / arrears to ensure that in
its opinion the system currently in place was strong enough to ensure the company’s
position should the arrears situation deteriorate as a result of the changes coming to
the welfare benefit system and particularly the impact of the Universal Credit. The
panel did not go into the possible effects of the review as too much of this is still
unknown; the idea was to make sure that the current systems were robust enough to
cope.
The panel looked at the present position and noted the large figure at present shown
for arrears (£478,925). In the process of the review we found that the current
position is less than 1% of current rent income.
Any recommendations made by the panel would have the benefit reforms in mind.
The panel accept that the current position is very good, but as we would always like
to improve the panel would like to see Boston Mayflower maintain a figure of less
than 1% of the recoverable rent.
Methodology
The panel has reviewed the following items and procedures during the course of its
review:
1. Income Management (Rent Collection and Arrears) Policy
2. Rent collection procedures
3. Service Specific Standards
4. Sign-up check list
4. Follow up visit form
5. Income and expenditure check
6. Arrears letters.
7. Arrears interview form
8. Arrears agreement letter
9. Notice seeking possession
10. Notice requiring possession letters and certificate of service
11. Housing benefit letters
12. Other associated letters
13. Income Management Annual Position Statements 2010/2011
14. KPI information (current tenant arrears)
15. Rent arrears and collection analysis
16. Income maximisation report
17. Boston Mayflower Rental Debtors 2011 & 2012
18. Rent arrears and collection cost and KPI.
19. Complaints report.
20. Other housing association Policies and Process
Context
During the review the panel reviewed in detail both the Rent Arrears Policy and
Procedure in order to understand current actions.
Meetings were held with the following staff to which a series of questions were
asked.
1. Mr John Smith (Head of Housing)
2. Mr Andy Snell (Debt Recovery Manager)
3. Mr Tim Sampson ( Financial Controller)
4. Mr Alan Clifton, (Customer Services Officer)
5. Mr Anthony Townsend, (Assistant Tenancy Services Manager).
The object of the interviews was to establish current policy and procedure with
regard to current legislation and practice, its efficiency in operation and it’s suitability
in moving forward with the changing legislation. We also took into context its social
issues within the social housing ethos.
The equality and diversity issues were investigated, particularly performance
information data with regard to the reflection of client type, age or disability. We
found that the Customer Services Officer interpret the policy based upon individual
needs/vulnerability of tenants personalising the function around the customer needs.
A copy of the questions and answers can be found in appendix 2.
The panel found the staff to be very knowledgeable and up to date with the current
legislation on the subject however it was felt that a further review may be needed
once the new welfare reforms had come in force.
Conclusion
The panel found that the policy and procedures were complete and well founded, we
were concerned about the lack of the review date on the policy and this seems to be
common place on most of Boston Mayflower policy documents. The panel found that
there was a system in place for the review dates but that was subject to a limited
circulation, and still thought that a simple fix of putting the review date on the policy
was worthwhile.
It was noted that most of the arrears were old debts pre 2005 and it was previous
management heads that made the decision not to write this off. This has since
changed and old debts will be written of sooner.
Item 6.13 in the Rent Arrears Policy was discussed as to the fairness of the wording
of this - the panel felt that this was not fair to the tenant. The panel felt that the
wording should be changed from “overpayments will be repaid on request” to
“overpayments will be repaid as soon as is established what the circumstances of
overpayment are and after discussion with the tenant”.
It became apparent during the course of the review that unlike a commercial
organisation Boston Mayflower was very aware of its social obligations in regard to
its dealings with an arrears situation and took every step to try and avoid an
unpleasant end to the problem. It is hard to see how any changes could be made to
this course of action without affecting the social obligations. The number of evictions
in the past years are: 2010 = 7, 2011 = 7.
The policy and procedures will need a great deal of work to bring them in line with all
the changes in legislation once these are clarified. It is assumed that this review is
scheduled to be undertaken.
The areas for improvement shown in 8.3 of the Income Management Position
Statement show that Boston Mayflower is looking into the problem and the areas
outlined go along with the panels thinking (copy in appendix 6).
After the interview with the Customer Services Officer it was apparent that the
procedures outlined in the process are used as a guide and that each case is looked
at individually and dealt with accordingly by the officer undertaking the case. This is
accepted by the Line Managers and is in keeping with the social implications within
the Boston Mayflower organisation.
The Customer Services Officer knew his tenants and how to deal with the ones that
came to his notice with arrears. He was very fair in his assessment of his tenants
and how he would address arrears issues with them.
It was very clear that the way the arrears information was presented did cause him a
certain amount of additional work and caused a slight delay in getting to the true
arrears position.
The interview with Anthony Townsend cleared up a good many queries we had and
the panel felt reassured by his knowledge of the system and procedures.
The changes being looked into at present to the direct debit methods seems to us to
be a very worthwhile and positive step, we would like to be kept informed as to the
progress of this development. It would seem to offer good value for money in the
long term.
Customer Scrutiny Panel – Rent Arrears Recommendations
Panel Recommendation
CMT Feedback
1.
The panel felt that a second settling in
visit (first visit after one month) would be
helpful and then the question of finance could
be discussed more fully and if needed perhaps help with producing a budget. This
would be relevant considering the way that
housing benefit payments will be made in the
future.
The introduction of Starter tenancies in April 2013
requires that a new tenant is visited three times
during the first twelve months of the tenancy and
therefore this recommendation is agreed.
2.
The rent arrears policy should have a
review date agreed when drawn up. If for
any reason the review cannot take place at
the given time, the fact that it was considered
should be noted and the reasons for nonreview recorded
Agreed that all policies should have a review date
3.
The panel felt it should not be left to
the tenant to have to apply for any overpayment of rent. It is therefore recommended
that in conjunction with the twice yearly reviews of rent statements that currently take
place, a minimum threshold for refund is considered after the week in advance payment
has been discounted. This credit position
Whilst all statements are reviewed twice a year,
rent statements produced and significant refunds
of Housing Benefit are addressed immediately in
consultation with the customer as an example, it
is a costly process to consistently refund small
amounts. CMT therefore suggest and in conjunction with the twice yearly reviews that currently
take place a minimum threshold for refund is con-
Action
Implementation
Date
The front cover
for all policies to
be reviewed
All reviewed policies to include
the next agreed
review date as
they are reviewed
should be discussed with the tenant before
sidered after the week in advance payment has
refund as they may want to leave the account been discounted.
in credit so there is a safeguard for the future.
4.
The panel recommend that the areas
for improvement shown in 8.3 of the Income
Management Position Statement should be
adopted as soon as is possible:
These improvements were implemented during
2012 as the APS referred to was the 2011 version.
•
Use of Housing Benefit Calculation
System is low outside the debt recovery team
•
Arrears are generally not picked up as
early as they should be
•
Causes of arrears are not investigated
and so some customers get into debt repeatedly.
5.
Some alteration in the way that the arrears are presented both to the CSO’s and
the tenants should be looked at. The panel
suggest that a review and cost of any improvements of the presentation of arrears to
both CSO’s and tenants should be undertaken as a matter of urgency to ensure the free
flow of accurate information and reported
back to the Panel.
This recommendation relates to limitations of our
current use of the IBS system. We can review
and cost any improvements that can be made
and feed this back to the Panel.
6.
We would like to see a letter go out to
new direct debit customers explaining how
the arrears on the rent statement are calculated.
Agreed
7.
The panel would like to see a major
push to promote payment by Direct Debit in
order that the operation financial gains could
be achieved. We would recommend a cash
back incentive of £25 be offered to encourage change or at sign up, this is to be rewarded to tenants after rent has been paid
via direct debit for at least a year.
We introduced a pilot incentive scheme in September 2011 to encourage payment by direct
debit. It was not successful and will be discontinued. CMT feel that any incentive should be credited after rent has been paid for at least a year
and would also like to suggest that the Customer
Scrutiny Panel or members from it participate in a
review of Direct Debits.
8.
The panel would recommend that the
Customer Service and Access Service Voice
review the current rent statement to see if
any improvements can be found to its layout.
Agreed
To be discussed
at the next
CSASV scheduled in February
2013
Work to commence February
13.