Agenda item

The Director of Housing submits a report on progress over the quarter from 3^rd April 2017 to 30^th June 2017.

The Director of Housing submitted a report on rent arrears progress for the quarter from 3 April to 30 June 2017. Zenab Valli, Interim Income Collection Manager presented the report, which was considered a positive Quarter 1 progress report, despite the ongoing financial climate. It was reported that many tenants were engaging with the service in a timely manner. Points made included the following:

·         Universal Credit (UC) Full Service was due to commence in Leicester in March 2018 would affect many more working age households over the following 12 months. The Income Management Team (IMT) were in the process of meeting with other authorities who have had UC Full Service implemented and were at the information gathering stage.

·         The IMT offered advice to all tenants and ensured information on agencies, who could help and offer advice to tenants, was available, for example, Citizens Advice offered money management and debt advice, the STAR team offered basic budgeting support and other types of emotional support. The IMT try targeted approaches when monitoring accounts with arrears and tried to target those bandings with most of the arrears ensuring those tenants were aware of support and advice available if they had other debts or required further support.

·         Tenants were encouraged to make direct debit payments. The Council could also apply for third-party deductions if a tenant was in receipt of welfare benefits. Many tenants preferred a payment direct from benefits knowing their rent would be paid.

·         The number of tenants paying by Direct Debit, Bank Standing Order or Wage deduction was low at 19.49% from the 14,161 number of tenants that were identified with rent to pay.  The IMT engaged with tenants to promote direct debit payments, however, many tenants preferred to be in control of their own finances and particularly when benefits were received on a weekly basis those tenants did not  prefer direct debit payments. Once the paperless direct debit facility was fully implemented whereby IMT could set the direct debit’s up by phone, take up might increase. IMT previously promoted direct debits and provided incentives to promote take up but despite this tenants continued to choose to be in control of their finances and would much rather pay cash or ultimately consider bank standing order’s opposed to direct debits.

·         The take-up of Clockwise Credit Union accounts was low, as most tenants were satisfied with the bank they were with. The service would continue to be promoted as it guaranteed rent payment would be covered before benefit payments reached the tenant them. It was particularly useful to promote Clockwise Rent Payment Accounts now that UC rollout was imminent and tenants would be receiving the housing cost element of their benefits directly into their bank accounts. The IMT could apply for Alternative Payment Arrangements (APA’s) for UC claimants. This was when the DWP would consider paying the Housing Costs Element of UC directly to the landlord in cases when the tenants had vulnerabilities or were in arrears over 8 weeks plus or when they were in 4 weeks arrears plus with a history of arrears.  The APA’s could be reviewed and the maximum time they could be paid for was 24 months. Being on an APA could allow the tenant time to learn how to budget on a monthly basis.

·         UC Full Service would affect anyone of working age with two children or less, and could take 6-8 weeks before receiving their first payment is received. Feedback on UC rollout in other areas showed a disastrous impact on rent collection, with average UC debt levels at £800 – 8 times worse than current average figures, and was regarded as a failure by the Department of Work and Pensions being able to respond to the changes as a result of UC rollout.

·         People in debt often struggled to manage money, especially if they were in a position with loan sharks or door stop lenders. They also struggled to understand that rent was a priority debt. Office appointments were offered to tenants to discuss their financial situations in more detail when those types of cases were identified. The IMT go through income and expenditures and if they identified tenants with other debts they were provided with basic budgeting advice and for more intense support referred to more specialist advice agencies when required.

Councillor Connelly, the Assistant City Mayor, Housing, offered his thanks to the Income Management Team for their work, and was pleased to see the levels of debt reduced, but recognised the future threat of Universal Credit.

AGREED:

that the report be noted.