Agenda item

The Director of Housing submits a quarterly progress report on Rent Arrears for the period 5^th October 2015 to the 1^st January 2016, to inform the Housing Scrutiny Commission of progress, as requested.

The Director of Housing submitted a quarterly progress report to update Scrutiny Commission Members on rent arrears for the period beginning October to December end 2015.

It was noted that:

a)    On 1^st January 2016 the amount owing was £171k lower than same the same quarter in 2015, despite difficult economic conditions.

b)    The number of tenants in arrears was significantly less by 30.7%, but the number of tenants in more serious debt had risen by 13.7% compared to the same quarter the previous year. It was reported there was a lot of variability in the figures, but arrears appeared to be falling again.

c)    £1.218m extra rent would be collectible as a result of Bedroom Tax, though the numbers of tenants affected continued to fall.

d)    The arrears among those affected by the Bedroom Tax fell by £44k since 6^th April 2015.

e)    An additional £112k of extra collectible rent would need to be collected as a result of Benefit Income Cap (BIC), which would likely increase when the cap was lowered from April 2016.

f)     £217,554 was paid by Discretionary Housing Payments (DHPs), of which £164,349 was to support people affected by Bedroom Tax.

g)    Evictions had decreased significantly during the year, with 40 evictions in the first three quarters, compared with 78 the previous year. Of those 40, 10 were family cases.

h)   Appendix 2 placed Leicester as only second to Wolverhampton (of those authorities who had supplied information), with regards to cumulative arrears as a percentage of rent role and underlined Leicester’s position as a top quartile performer.

In response to Members’ questions it was noted:

a)    Tenants rent arrears reduced slightly with the impact of the two weeks non-payment period over Christmas.

b)    The number of serious cases where seven weeks or more rent was owed stayed at around 34% for the first three years reported in the table, but the proportion of those in serious debt rose to 42% in 2014-15, and nearly 70% in the quarter to December 2015-16. The number of cases in arrears had decreased by 30.69% and were approaching a more normal figure since the impact of the introduction of Bedroom Tax in 2013.

c)    There was no evidence of growing hardship through the BIC at present, but was expected to grow on its introduction in April, and could mean a £6,000 drop in income per annum for some people .

d)    The report at 3.12 was amended to read ‘on the 1^st January 2016, 1,747 or 8.25% tenants were affected by bedroom tax.’

e)    The report at 3.13 was amended to read ‘from the 1,866 cases that were identified at the start of this financial year on 1^st April 2015, by the 1^st January 2016 the number of active cases had reduced to 1,747.’

f)     The national roll-out of Universal Credit (UC) had been done in tranches. In Leicester this was on 25^th January 2016 for new single person claimants, and the impact of that had been negligible. Staff received rigorous training and were aware of the difficulties some customers had when making applications for UC online. The onus was on the individual to make a claim as soon as possible as claims could not be backdated.

g)    The Council was not underestimating the significant challenges of UC, which would be challenging for a lot of authorities, especially with areas of deprivation. Awareness would be raised with tenants through a publicity campaign.

h)   Money collected through Bedroom Tax was not a separate pot of money, but reduced the impact of arrears increasing due to the loss of Housing Benefit (HB) for those people affected.

i)     With reference to Table 1, rent arrears was 13.1% lower than the same quarter the previous year, and Housing had done well to mitigate the risk.

j)      A risk to the Council was HB being paid direct to the tenant. Educating tenants on the important of budgeting was important. As previously reported, mandatory direct debits would be introduced for new tenants, and pre-tenancy interviews to mitigate the risk or arrears had been successful, with every appointment attended by potential tenants.

The Chair thanked officers for the report.

AGREED:

That the report be noted.