Agenda item

Paul Elliott, Business and Commercial Programme Manager, presented the proposed Rent Collection and Arrears Recovery Policy and associated processes which had been refreshed given the challenges faced to maximise income recovery to the Housing Revenue Account in light of the ongoing Welfare Reform agenda. 

The Government’s ongoing Welfare Reform, including the introduction of Under Occupancy Criteria, was having a direct impact on the number of active arrears cases being managed by the Housing Income Team.  The number of tenants affected had remained relatively stable since April, 2013, at approximately 3,300 tenants of which 2,500 were in arrears.  During the first 12 months of the Welfare changes, there had been limited intervention by the Income Team due to the low level of arrears that existed.  However, if unaddressed over time this would become a significant issue for both tenants and the Council’s finances.

The report set out details of the recovery process which started on the 3^rd week of non-clearance when a reminder letter was sent to the tenant.  The letter was only triggered when a balance exceeded £30 to ensure the process was cost effective and equitable.  A second reminder was sent on the 4^th week when arrears exceeded £45.  If the debt remained outstanding and no contact had been made, a visit to the tenant would be made to establish their personal circumstances and arrange to clear the balance by instalments.  If balances remained outstanding after 5 weeks and/or the agreement was breached, consideration would be given to the serving of a Notice of Intention to Seek Possession which was the first step prior to litigation.  Before considering litigation, it was the view that commencing action below £300 was disproportionate to the debt.  In the case of younger tenants, there would be a referral to Rush House and other appropriate agencies.

The proposed changes to the Rent Collection and Arrears Recovery Policy were set out in full in the report submitted.

Discussion ensued with the following issues raised/clarified:-

-          Brighton and Edinburgh Councils had stated that they would not evict a tenant if the individual’s circumstances were solely due to the Under-Occupancy penalty.  Rotherham’s approach was to be fair and equitable to all its tenants and not single out 1 particular group.  The impetus was to stop the debt and provide the support to prevent arrears.  Arrears needed to be targeted at £250 or below as it was felt at that point tenants could still recover from debt in the short term

-          The average cost of eviction was £8-9,000.  It included the costs of re-letting property, bringing the property up to a re-lettable standard and, generally, the actual debt itself

-          Local intelligence showed that there was an increase in the “working poor”.  There was a large number of tenants in arrears who were working and not in receipt of benefits but were still struggling to pay their rent

-          The Authority waited until the debt was proportionate as entering a case into Court Proceedings added a further £3-4,000 to a debt

-          To date no eviction proceedings against anyone due to Under Occupancy arrears have been taken but if the arrears continued to raise it was inevitable that that position would change

-          At the current time were was no other assistance other than downsizing

-          The Authority had the temporary measure of Discretionary Housing funding but there was no indication if there would be further funding after 31st March, 2015

-          In Rotherham there were 3,349 tenants subject to the Under Occupancy charge of which 2,145 were in some form of arrears at a cost of £425,000.  These were tenants who had never fallen into arrears before

-          Tenants were offered inclusion on the downsizing register, however, there was not the amount of stock required in some areas

-          Although it was included in the Tenancy Agreement historically it had never been the practice of the Authority to request the payment of 1 week’s rent in advance.  This had now been activated and once the tenant had moved into the property the week’s advance rent was credited to the rent account

-          A tenant who was subject to potential eviction and had dependent children  would be referred to a CYPS Support Worker for additional support.  There were also a Tenancy Support Officer, Money Advice Officers and Employment Solutions Officers for all tenants facing potential eviction who could provide support with regard to applying for Housing Benefit etc.

-          The key to a sustainable tenancy was the sign up interview.  At that interview the Allocations Officer would conduct an income and expenditure assessment with the prospective tenant to establish if they had sufficient income to afford the weekly rent.  There were also credit checks so it was understood the level of potential debt the tenant may have

-          Currently there were still tenants being allocated properties that would be subject to the Under Occupancy charge based on whether they could afford the tenancy in view of the sign up interview (see above).  The right to refuse prospective tenants who were unable to demonstrate they could afford to pay the rent would come into force as from 28^th October, 2014

-          The final decision on the ending of a tenancy was made by a Judge.  In the more complicated cases that may involve someone with mental health issues or children, a case conference would be convened to make the final decision as to whether the tenancy was terminated or not.  The standard process would be to seek possession through the serving of a Notice to Seek Possession and would probably take 12-18 months dependent upon the number of times i was entered into Court, any payments made etc.

Resolved:-  (a)  That the report be noted.

(2)  That officers continue to work pro-actively with prospective tenants.