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Rent Collection&

Income Management

Linda Ellen Head of Housing Management

31st October 2012

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Background

• Income collectable from rent c.£50 million pa

• This pays for all the services we deliver to our tenants

• Collection is key priority

• Support customers to enable them to pay rent

• We will evict

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Local standards – rent income

• Income collection– We will collect the rent due to us.

• Preventing arrears– We will prevent rent arrears by working with new tenants to

make sure they are able to pay right from the start of their tenancy.

• Support– We will support tenants to enable them to pay their rent.

• Evictions– We will only evict for rent arrears as a last resort.

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Improvements already identified

• Improvement to the service over past 12 months:-

– Arrears patches reviewed– More time allocated to this area of work– Personal contact made with customers – More appointments carried out in peoples homes– Detailed financial assessments carried out with customers– Referrals made to CAB and Shelter for debt advice– Support provided where necessary– Monthly meetings with Area Managers & Head of Service– Where performance has been an issue action taken

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Debt (at 30/09/12)

• Current tenants £2,596,462

• Shared owners £ 42,498

• Former tenants £1,010,798

• Total £3,649,758

• Increase of £399,415 since end March 2012

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Current tenant debt

Total Current Tenants Weekly Collection before adjustments

1600000

1700000

1800000

1900000

2000000

2100000

2200000

2300000

2400000

2500000

2600000

2700000

2800000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51

Week Number

£ p

er

week

2006/072007/082008/092009/102010/112011/122012/13

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BVPI66a - % of rent collected

• 2007/08 97.3%

• 2008/09 97.8%

• 2009/10 98.2%

• 2010/11 98.23%

• 2011/12 96.61% (target 98.5%)

• 2012/13 96.05% at quarter 2 (year end target 97.30%)

• Benchmarking with Housemark against other stock retaining councils:-- 2010/11 – median of 98.43% (sample of 24)- 2011/12 - median of 98.42% (sample of 11)

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Contributory factors

• External factors around the economy – Unemployment rises

– Increase in those in and out of work

– High levels of tenants on HB

– More customers facing difficult circumstances

• Changes in benefits– Delays in processing

– Overpayments

• Staffing changes

• Pressures on floating support

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On the Horizon

• Localism

• Welfare Reform– ‘Bedroom tax’– Benefits Cap– Universal Credit will replace existing benefits– Direct Payments

• Flexible tenancies and affordable rent

• Council Tax changes

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Bedroom tax from April 2013

• Rent restrictions for working age social housing tenants

– 1 spare bedroom = 14% reduction in rent allowed for HB (av £12pw)– 2 spare bedrooms = 25% reduction (av £22 pw)– size criteria similar to that used for HB private sector claims – over accommodated = 1 or more spare bedrooms

• Extra Discretionary Housing Benefit (DHP) funding to be made available

• Government estimate 32% of all working age on housing benefit will be affected

• Those in work are affected if claiming any benefit

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How many bedrooms?

• Allow for one bedroom for each of the following:-– Couple – Person aged 16 or over– 2 children same sex under 16– 2 children under 10 – any sex– Any other child , – A carer providing overnight care

• Possible extra room for :-– Severely disabled child – Temporary absence (less than 52 weeks - e.g. away at University)

• No additional rooms allowed for:-– Foster child– Child whose main home is elsewhere

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Example - size criteria restriction

• Couple with 2 teenage daughters living in a 3 bedroom house

• Rent is £80 per week

• Size criteria is 2 beds

• Pre April 2013 HB covers full rent of £80

• Post April 2013 14% reduction applies for having 1 extra room

• HB will drop by £11.20 a week to £68.80

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Bedroom Tax – exemptions

• Exemptions– People who are pension credit age

• or whose partner has reached pension credit age

– Shared ownership properties

– Temporary accommodation (used by the Council to prevent homelessness)

– Mooring charges and mobile home or caravan site rents

– Supported ‘Exempt’ accommodation.

– Bail hostel or probation hostel

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Options

• Move to a more suitable sized property

• Rent out a room– landlord agreement– lodger rules– tenancy restrictions

• Ask non-dependants to contribute more

• Review finances & make up shortfall from income

• Increase income to remove need for benefit help– employment

• Request DHP funding (short term)

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Benefits cap from April 2013

• Benefit Cap– Applies to all tenure types for working age claimants

• Maximum payable will be £500 pw for a couple. • £350 pw for single adult

• Exemptions– Pensioners – War widows – Working households– Those who are disabled

• 9 month grace period for claimants who were in work for 52 weeks or more before the start of their claim.

• Housing Benefit eroded first

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Example – Benefit Cap

Couple with 4 children living in a council property

• JSA(IB) = £111.45• Child Tax Credits = £292.08• Child Benefit = £ 60.50• Housing Benefit = £ 94.45• Total Benefit = £558.48• Cap = £500.00• Potential Benefit loss = £58.48

• HB reduced to £35.97 weekly (£94.45 minus £58.48 weekly)

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Universal Credit - Oct 2013 to end 2017

• Replaces– Income-based JSA, – Income-related ESA, – Income Support – Working Tax Credits, – Child Tax Credits and – Housing Benefit.

• Paid – Monthly – Single household payment– In arrears

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April 2013 - Council Tax Benefit abolished

• Detail– Replaced with Council Tax Support (CTS), – Administered by Local Authority – Rules for working ages are for LA to decide

• But – Total CTS spend will be less than CTB spend– Pensioners will not be worse off– Vulnerable must be protected– Should encourage people to work

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Our focus

• Working with Benefits Service– Dept of Work and Pensions (DWP)– Identifying customers where there are likely to be difficulties

• Benefit Cap

• Bedroom Tax

– Discretionary Housing Payment

• Housing Quality Network (HQN) review of practices– External ‘health check’ – August 2012– HQN acting as a critical friend– Wide experience of other organisations– Report and recommendations received

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HQN - Strengths

• Customer focussed

• Officers are enthusiastic and want to do the right thing

• Clear sense that evictions are viewed as failure

• Regular reviews are held with officers (case reviews)

• New tenant training programmes

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HQN - Weaknesses

• Fragmented leadership

• Lack of in-house welfare / benefit advice expertise

• Some inconsistencies in case management

• Performance management needs strengthening

• Customer profiling is under developed

• Brand awareness improvements needed

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HQN – Contributory factors

• Introduction of ATLAS– Leading to greater numbers of overpayments

• Delays in HB processing– Increase in the number of change of circumstances claims– Resources

• Court case delays

• Lack of a customer debt policy for the Council

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Our response

• Addressing issues through a project approach

• Action plan has been drawn up

• Project Team – ‘Task Force’ put in place – Focus on reducing debt– Action recommendations from HQN– Consider options for service delivery post welfare reform

• Project Structure– Customer focus & access– Rent accounting & collection– Arrears management– Former tenant arrears– Housing benefit administration– Money management/benefit advice– Financial inclusion measures– VFM

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What are we doing now?

• Task force focussing on individual patches• Case reviews with staff• Linking with benefits welfare reform project• Increasing Awareness

– Staff training

– Customers• Individual contact• New tenants• Resident involvement training/workshops

• Performance– Focus from ‘what is’ being done to ‘what isn’t’ and ‘how can we’ (e.g.)

• Broken arrangements• Failed direct debits

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What are we doing now?

• Strengthening links and expectations with partners– Citizens Advice Bureau (CAB)– Benefits services

• Updating procedure and practice– Arrears management– New tenant processes & sign up

• Communication opportunities– Improving information for access and clarity

• Letters, texting, website, newsletters

• Culture– Non payment is not an option

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Ideas for feedback

• Maximising Income– What should we prioritise?

• Budgeting training• Employment opportunities

• Culture– What are the best ways of spreading the message?

• Non payment is not an option

• Incentives– Should we have these?

• Direct Debit• Clear account end of tenancy• Clear account at end of year

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Ideas for feedback

• Evictions– Should we advertise these more?

• Rent statements– Sent quarterly to those who request.

• Send at least annually to all?• Ways to pay or useful contacts?

• Website– What does it need?

• Awareness– What can you do to help spread the word?

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Questions?

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Annual Rent Review

Linda Ellen

Head of Housing Management

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Annual review – 2013/14

• Background– Local authorities generally set their rents in accordance with the rent

restructuring framework• introduced in 2002• intention that social landlords should offer similar rents for similar properties

• The rent formula– established by Government to gradually bring about this policy

– actual rents moving towards a national formula (or target) rent

• Formula rents– Generally increased each year by retail price index (RPI) +0.5%

• (RPI is the Sept in the year preceding the start of the financial year).

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Rent Increase – 2013/14

• Protection– Government limits any rent increase

• no more than the rate of inflation plus 0.5% plus £2.00 per week.

• Preparation– Finance working on average increase now

– Annual IT project is in place

– Finance reports to Cabinet Dec/Jan

– Tenant information issued February

– Direct Debits amended March

• Improvements?– Can we do this better?