Income ManagementWhat could you be doing?

Yvonne DaviesHead of Housing and Economic Development (North)June 2009

2

What I will be covering

• Summary of our inspection approach on arrears, with particular reference to arrears recovery, debt advice and rent setting

• Overview of trends

• Lessons learned and good practice from inspections

• The impact of the recession and future challenges

Our inspection approach

Why it mattersShort Notice inspectionsHousing standardsKitemarksCrystal ball gazing

And the KLOE….

And then CAA

4

The Income management KLOE

• Arrears recoveryDo you minimise loss of income by taking prompt and appropriate action to recover both current and former service user arrears and other debts?

• Debt adviceDo you ensure that service users receive effective welfare benefit and debt advice to maximise income and manage debt?

• Rent settingDo you comply with the statutory requirements and adopt good practice methods in terms of rent and service charge setting?

5

CAA expectations

‘We will judge how well councils and their partners understand the local impact of the recession and how well they are responding using the tools and influence available to them to mitigate the impact on their communities and prepare for the upturn’

(CAA framework overview Feb 2009)

• How strong is the economy?• What is the response to the recession?

Comprehensive Area Assessment of Local Strategic Partnerships…includes LAs and their partner HA contribution

Overview of trends

7

LA arrears as % of total debit 2001-2008

0.00

1.00

2.00

3.00

4.00

5.00

2001 2002 2003 2004 2005 2006 2007 2008

Average Top quartile Bottom quartile

8

HA General Needs arrears as % of total debit 2005-2008Source data: Tenant Services Authority

3

3.5

4

4.5

5

5.5

6

6.5

7

7.5

2005 2006 2007 2008

Average Median Top quartile Bottom quartile

9

% of landlord possession claims awarded at county court

50%

55%

60%

65%

70%

75%

80%

85%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

London Midlands North East

North West South East South West

Lessons learned from inspections…and good practice

11

Some recent ‘trends’ from housing inspection

• The rise of ‘financial inclusion’ – holistic approach • More use of specialist teams - less generic staff• Early visits to new tenants becoming more common• More landlords presenting their own Court cases

... and using possession claims online • More examples of good Court liaison, but still not the

norm• Inconsistent approaches over welfare benefits advice

services – and the use of service level agreements

12

Other recent ‘trends’ from inspections

• Growth in use of e-payments and 24 / 7 services• More payment methods being offered by more, but not by

all landlords (greatest variation is over e-payments)• Limited use of ‘out of hours’ work for income collection• More use of email and texting to remind tenants• More use of targeted publicity campaigns – bus shelters,

public buildings and even cinema ads • More use of incentives for clear accounts• Has not figured significantly in short-notice inspections

13

Good Practice in income management

• Tenant support fund• Financial inclusion• Publicity on rent free weeks• Welfare right services: free money, debt and benefit

advice• Proactive HB work and partnership with LAs• High quality rent arrears awareness campaigns• Debt advice project, including energy efficiency and

money management• Staff incentive schemes to keep debt down• Multi agency partnerships

14

Who has done it well in last two years on rent arrears?

ALMOs• Carrick Housing (Jan 07)• Golden Gates (Feb 07) • Solihull CH (May 08)• Your Homes Newcastle (Jun 08)• Homes for Islington (Sep 08)• Poole HP (Sep 08)• Gateshead HC (Feb 09)

HAs

• Westcountry (Aug 07)

• Pathmeads (Dec 07)

15

Who has done well recently on financial inclusion?

• Aire Valley ALMO, Leeds• Poole ALMO, • Barnet homes• Cobalt HA, Liverpool• Six Town ALMO, Bury• South Tyneside ALMO• Wakefield and District HA• North Somerset Housing Management Services• Your Homes Newcastle ALMO

16

Some Benefit inspection findings – but still early days (June to April 09)

• 8 poor (zero star) ratings and 2 fair (one star);

• The perception of a ‘good’ service within councils– A tendency to look at ‘own’ performance rather than relative performance

• Profile of the benefit service

• An opportunity to challenge some long term issues– Notifications

• Not just slower processing times– Overpayment management

– Benefit take-up

– Understanding customers

– Value for money

– External contracts specified around performance standards

– Performance management – information, targets, quality

The impact of the recession and future challenges

18

19

What have we learnt from last time?

Study: A mine of opportunity?

The first policy responses to the closures. In general these have involved ‘knee-jerk’ efforts to create jobs of any sort – often in the locations from which they were lost.

This is associated with the aftermath of the final set of major pit closures in an area. Many authorities were effectively overwhelmed at this point. Their response was to seek assistance from national government.

Phase 1HELP!

Phase 2‘JOBS JOBS

JOBS’

Phase 3STRATEGIC AND CO-ORDINATED

Lessons learned from earlier regeneration efforts. More strategic analysis. Involves a process of stock-taking and tailored policies developed.

Phase 4MAINSTREAMED

AND SUSTAINABLE

Regeneration activities become mainstreamed across all service areas. They are less dependent on external funding and set piece projects. More focus on difficult social issues.

Central/EU Funding

LA Learning Curve

20

Recession – early impact

• Rising caseloads – benefits even more important to more people• New customers

– Not used to the system– Not used to long forms, multi agencies, delays– Well motivated to find work in early days of unemployment

• Expectations of public services• Links to wider outcomes – getting people money quickly and accurately

helps to give confidence to take work• Mortgage pre action protocols• Funding for national debt advice• Court desks for those facing repossession• LA economic assessments

21

Our challenge to you

• What is happening where your tenants live and work?• How have they been affected?• Have you got an appropriate response in place?• CLG guidance to LAs on homelessness - April• CLG and TSA joint guidance to Housing Associations – May• CLG total Place Pilot• National reporting on Economic development

What does your website say and how to you regularly communicate what you are doing to support tenants in the recession?

22

Yvonne-davies@audit-commission.gov.uk07814 976326

Thanks for listeningMore information…..

Yvonne-davies@audit-commission.gov.uk07814 976326

National studies: crunch timewww.audit-commission.gov.uk/nationalstudies

Good practice www.audit-commission.gov.uk/housing/goodpractice