Rent Arrears Service Improvement Programme

Your Homes Newcastle Rent Arrears Committee
21 December 2006
Rent Arrears Service Improvement Programme
Report by: Head of Housing Management
For Decision
1.
Introduction
1.1
This report sets out to summarise the work carried out to improve rent arrears
management since the Rent Arrears Committee was established in July 2006. The
report also sets out an improvement plan that committee will be asked to approve.
2.
Recommendations
2.1
Committee is recommended to:
•
Agree the service improvement plan as set out in Section 5 and Appendix 1
•
Remit the improvement plan to YHN Board for endorsement at its January 2007
meeting
•
Recommend to YHN Board that the Rent Arrears Committee be wound up and
that responsibility for monitoring implementation of the improvement plan be
delegated to Finance Committee
3.
YHN Strategic Objectives
3.1
The effective management of rent arrears links to the achievement of Your Homes
Newcastle strategic objective of running ourselves well.
4.
Summary
4.1
YHN are judged on a number of indicators in relation to the management of rent
arrears. Board receives performance information on some of those indicators on a
regular basis. Following an increase in arrears levels Board established the Rent
Arrears Committee with a remit to scrutinise this area of business in detail.
4.2
At the end of the 2005/06 financial year the level of net arrears on current accounts
stood at £4,488,833. When the Rent Arrears Committee was established in August
the total had risen to £4,772,053, however as at 11 December the total had fallen to
£4,540,037. The target for the 2006/07 financial year is £4,264,391.
Performance on this indicator has been reported to Board as red for the first two
quarters however due to the sustained improvements in recent months it is expected
that the outturn for 2006/07 will be very close to or exceed the target.
4.3
Since the committee was established there have been a number of initiatives which
have contributed to the decrease in arrears, they include
•
General increase in awareness of the rent arrears position, including improved
management information for staff and a review of the performance management
arrangements
•
Reduction in the amount of time it takes to get statements to tenants at the end of
the accounting period
•
A check of every rent account in arrears across the city to ensure that appropriate
action is being taken
•
Improved communication with YHN staff and tenants to explain the consequences
of non payment
•
Area based staff briefing sessions in the east and outer west and north, the
programme is to be repeated in the inner west area of the city.
•
A review of resources deployed to deal with rent arrears work.
4.4
Committee has received regular updated on the work of the officer group and made
decisions on key areas of work such as communication with customers and staff
training.
4.5
The service improvement plan has a number of key tasks to be completed before the
end of March 2007. It is important that progress is closely monitored to ensure
targets are achieved.
5.
Service Improvement Plan
5.1
At its first meeting this committee agreed a work plan up to December 2006 that
included the following areas:
•
•
•
•
•
•
Baseline review of current position
Comparison with similar organisations and best practice
Review of water rates collection
Review of the end-to-end processes, including computer systems
External and internal communications
Links with Newcastle City Council, with specific reference to Housing Benefit,
Legal Services and Cashiering
•
5.2
5.3
Review of management information and performance management
An interim report to YHN Board in September identified some key issues that
needed to be addressed in order to achieve improvements. Those issues included:
•
Water rates collection is not cost effective
•
There was no co-ordinated communications plan for rent arrears
•
The arrears process did not start until three weeks arrears was accrued and
overall the process is too long
•
The legal process is slow, particularly the time taken to get a court hearing
from the date a case is submitted
•
Performance management required strengthening
At its meeting in November this Committee received a report that highlighted the
main components of the draft Service Improvement Plan. This report gives more
detail and outlines the financial impact of the proposals where they are available.
The key areas of the service improvement plan are:-
5.3.1
Revised end-to-end process – the aim is to establish with prospective tenants the
importance of paying rent on time. The new process for tenants will begin after two
weeks rather than three as at present. In addition the number of weeks arrears
accrued from going into arrears to the service of a legal notice will reduce from
seven to five. Support for tenants who are finding it difficult to pay will be available
from local housing teams and the Advice and Support service.
As part of the improvement plan a review will be completed to assess the staffing
resources required to carry out rent arrears work. This will take into account the
removal of water rates collection, the additional work resulting from beginning the
recovery process after two weeks (an additional 2,000 arrears cases) and the ability
to move resources quickly to support areas where arrears levels are highest.
It is important to move away from describing tenants as either “can’t pay” or “won’t
pay”. Every tenant has the same level of responsibility and will face potential
eviction if rent payments are not maintained.
5.3.2
New tenancy DVD – this will contain information on key aspects of a tenancy,
including rent payments, rent arrears and housing benefit. It will be shown to all
prospective tenants and new tenants will be given a copy if they want one. This will
ensure a consistent approach to signing up all new tenants in relation to key areas.
This was agreed by Rent Arrears committee in September
5.3.3
Implement internal and external communication plans – these were agreed by the
Rent Arrears committee in September
5.3.4
Water rates transition plan – this was discussed by Committee at its November
meeting. The officer group responsible for implementing the plan met for the first
time on 6 December and have added detailed tasks to the outline presented to
Committee.
5.3.5
Staff training programme – agreed by Committee at its November meeting.
5.3.6
Legal issues – Committee have previously discussed the difficulties caused by the
delay in obtaining a court hearing date. This will be raised in a meeting with judges
and court officers to take place in January 2007and a request for monthly meetings
will be made. There are other legal related matters that Committee are
recommended to approve. They are:•
To implement best practice in relation to tolerated trespass. A tenant
becomes a ‘tolerated trespasser’ if a rent payment is missed following the
award of a court order. These are significant implications because tolerated
trespassers do not have the Right to Buy, Right to Succeed or Right to
Repair.
•
To review the staff resources in the YHN Rent Recovery Team.
•
To explore the use of bailiffs to recover rent arrears. At this stage Committee
is asked to agree to research in the benefits and disadvantages of using
bailiffs. It is proposed that YHN Finance Committee receive a report on this
in due course.
5.3.7
Introduce an additional non collecting week at the end of the financial year. This has
been raised with the City Treasurer at the city council who supports the proposal. It
is hoped that it will be implemented for 2007/08.
5.3.8
Management information and performance management – There are a number of
proposals that can be grouped together under this heading, they are:•
Introduce web intelligence reports for YHN estate based staff. These reports
will let staff see each week how well they are performing in relation to their
targets on a ‘traffic light’ system.
•
Introduce a quarterly check of all rent arrears cases by local teams.
•
Introduce independent sample checking of rent arrears cases to ensure
appropriate action is being taken.
The full Service Improvement Plan is attached at Appendix 1.
5.4
It is proposed that the implementation and monitoring of the service improvement
plan be carried out within the overall YHN work programme using Prince 2
methodology. A rent management workstream will be established that will be part of
the Housing Management Project.
It is further recommended that due to the importance of this area of work Finance
Committee receive regular updates on progress, beginning in February 2007.
6
Consultation
6.1
There has been consultation with the City Council through representation on the
officer working group and the Rent Arrears Committee.
6.2
YHN staff have been represented on the officer group by local housing managers
and officers from business development and corporate services.
6.3
Tenants have been represented on the Committee and are aware of the issues that
have been considered. Although there has been no specific consultation with
tenants on the service improvement plan consultation plans have been drawn up in
relation to water rates and the additional non collecting week.
7
Implications
7.1
Financial – effectively management arrears will have a positive financial impact on
the Housing Revenue Account. By maximising rental income more money is
available to prove services to tenants.
7.2
Risk – there are a number of risks relating to the delivery of the service improvement
plan.
•
There are a number of statutory performance targets in relation to rent arrears.
Failure to perform well in this area has a negative impact on YHN’s reputation as
a high performing organisation and places at risk its three star aspirations.
•
The NCC Housing Benefit service has undergone significant change over recent
years. The service is to implement a new computer system is in January and the
degree to which the implementation is successful will impact on rent arrears.
YHN and NCC will be communicating closely to ensure that there is clarity on the
impact of the change in systems.
•
It is essential that the issues connected to court hearings are resolved. Local
staff are working hard to minimise the amount tenants owe but are being
frustrated by the delays in getting a date for a court hearing when it is needed. A
regular meeting with the courts has been established and there is recognition by
them that YHN is a major user of the courts.
•
The Water Rates transition plan and potential staff reduction will require careful
management and consideration to be effective. Failure to make the necessary
decisions will result in YHN not realising benefits and incurring ongoing
committed cost.
•
The end to end process should be aggressively implemented to keep up
momentum to ensure the March 2007 key deadlines are met, not to do so will
significantly impact staff behaviour as expectations have been raised. Officers
have been identified to lead on the key pieces of work and the progress will be
subject to scrutiny by Finance Committee and senior officers in YHN.
8
Next Steps
8.1
If the service improvement plan is approved it will be submitted to YHN Board in
January for endorsement.
8.2
Monitoring of the implementation of the plan will be carried out by Finance
Committee. The first progress report will be submitted in February 2007.
Contact Officer: Neil Scott Head of Housing Management, ext 28711
Background Papers: Service Improvement Plan Report to Rent Arrears
Committee, November 2006. Rent Arrears – Interim Report from Rent Arrears
Committee to YHN Board, September 2006.
9
Appendix 1
Rent Arrears draft Service Improvement Plan December 2006
Item
1. Implement and evaluate internal and external communication plans
2. Develop and implement transitional plan in relation to water-rate collection:
•
•
•
•
•
•
Completion
Cost
October 2006
£11,000
Dec 2006 to
March 2007
£20,000
Liaison with Northumbria Water
Communication Strategy for transition
Resource impact (e.g. supporting vulnerable groups)
Benefits realisation (redirecting potential m/t savings)
Administration & Accounting for 2007-08
Performance Management
To include
£3k external
communication
resource
£2k material
design
£15k print and
post letter
3. Pilot out of hours telephone calls to tenants
January 2007
To be determined
4. Review Direct Debit arrangements to achieve payments in advance
January 2007
Nil
5. Explore use of bailiff to recover rent arrears in appropriate cases
January 2007
Nil
6. Implement incentives for Direct Debit and clear rent accounts as previously
agreed by Finance Committee
January 2007
£1,600 per
annum
7. Review management arrangements and staffing of former tenants arrears, rent
recovery and SX3 Project Teams as part of whole systems approach
January 2007
Nil
8. Liaison with City Service in relation to Housing Benefit service developments,
scanning documents at YHN outlets
January 2007
To be
9. Review Construction Partner and other non-tenant charging arrangements
January 2007
Nil
10. Review Rent Recovery Team – attendance at court by YHN Officers, scheduling
of cases
January 2006
Nil
11
determined
Item
Completion
Cost
Feb / March 2007
£20,000
12. Implement revised end-to-end process: includes revising letters, starting action
after two weeks, amending computer systems.
March 2007
To be determined
13. Implement best practice in relation to tolerated trespass
March 2007
£3,000 printing
costs
14. Produce new tenancy DVD and introduce it on tenancy sign-up.
March 2007
£10,000
15. YHN staff to be able to process payments via internet.
March 2007
Staff training
costs, to be
determined
16. Explore use of SMS text messaging to advise tenants of rent arrears and action
to be taken
March 2007
Nil
17. Introduce additional non-collecting week at end of financial year
March 2007
Nil
18. Carry out Service Level Review for cashiering
March 2007
To result in
reduction in SLA
costs
19. Improve performance management information – trend data, web intelligence,
“mystery shopping”.
March 2007
Nil
20. Transfer management of heating charge accounts to Income Section
March 2007
Nil
21. Introduce quarterly check of all accounts in arrears
March 2007
Nil
11. Develop and introduce competency based accredited training programme
Deliver first round of training
Item
Completion
Cost
March 2007
Nil
23. Produce model to review staff resources required to manage arrears cases
April 2007
Nil cost to
produce model
24. Develop third party identity for former tenant’s arrears possession order cases.
June 2007
To be
determined
25. Develop end of tenancy incentive scheme
June 2007
To be self
financing
22. Review protocol and policy of rehousing homeless priority applicants with former
tenants arrears
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