Rent Collection & Income Management

1. Rent Collection&Income Management Linda Ellen Head of Housing Management 31st October 2012

2. 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

3. 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.

4. 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

5. 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

6. Current tenant debt

7. 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)

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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)

15. 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

16. 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)

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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

26. 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

27. 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?

28. Questions?

29. Annual Rent Review Linda Ellen Head of Housing Management

30. 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).

31. 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?