However, as the diagram below shows, when compared to all the other London Borough’s, our performance in 2005/06 has moved closer to the average rather than the top. 

 

 

Performance comparison of the specialist Rental Income Team and the generic regeneration teams for arrears collection (2)

	Rental Income Team	Regeneration Teams
Proportion of total rent accounts	8384 (76%)	2679 (24%)
Average arrear per account in arrears	£305	£323
Proportion of total accounts in arrears	3476 (71%)	1443 (29%)
Proportion of total accounts in credit	4352 (80%)	1122 (20%)
Proportion of accounts with over 7 weeks arrears	34%	33%
Evictions carried out	0.18%	0.30%
Proportion of unauthorised occupancy accounts	15 (35%)	28 (65%)
Proportion of unauthorised occupancy accounts in arrears	42%	58%
(2) Based on November 2006 performance

 

 

Resident satisfaction

In our 2005 independent face-to-face tenant survey, 89% rated their rent account information as clear and 76% rated the information as good at helping manage their rent account. 80% of tenants feel the rent reflects good value for money. 78% of tenants are satisfied overall with the landlord services provided by Barnet Homes, the second highest amongst the London ALMOs.

How we aim to improve value for money for arrears collection

• By introducing more automated arrears tracking of lower level arrears, so staff can concentrate on higher levels. We have already piloted this for garages, resulting in a fall in arrears from £17,500 to £13,000 in November 06.
• We have collected data on tenancies more likely to suffer from high arrears or eviction. In the future we will assess new tenancies to spot those that might get into difficulty and introduce support packages.
• We will encourage residents to pay by direct debit as the charges are much lower than giro payments. In December 2006 over 200 tenants had already transferred to direct debit as a method of payment.
• We are piloting use of an external agency to collect former tenant arrears.
• We will offer reward draws to tenants who keep a clear rent account and do not cause anti-social behaviour.

Conclusion 

We know our costs are at the upper end compared with other London ALMOs. The regeneration teams are an important factor in this, but we believe these areas require more intensive arrears management, because of their demographic make up.

The same comparison shows excellent results for our arrears collection, but we are not complacent, as other London Boroughs have recently caught up. To be amongst the best in London, our improvement plans (with an emphasis on preventative measures) are an important part of achieving continuous improvement.

Update April 2007

Performance changes
Our 2006/07 performance showed an improved arrears collection rate of 96.97% against 96.43% for 2006/07. Whilst the improvement is welcomed it is still lower than the level that we wish to achieve. As a result we have agreed to put increased resources into the team to “kick start” improved performance for a year and to review the outcomes in April 2008. This year’s target is for a collection rate of 97.6% which would ensure top quartile within the London Borough’s on current performance rates.

Increased resources and costs of rent collection     
As improved arrears recovery is a corporate priority within the Barnet Homes Business Plan for 2007 -2012 we have agreed to place additional resources into the Rental Income Team. This will be to increase the level of supervision of the team, reduce the size of the patches for Housing Officers and to ensure earlier intervention and prevention work, particularly for new tenants.

As a result of these changes the total costs of arrears collection at 2006/07 prices will have changed to around £1.35m.

Our Specialist Rental Income Team costs about £830,000 a year, including legal costs and the use of collection and debt advice agencies. On average this now equates to £1.99 a week for tenants or 3% of a typical weekly rent.

This could buy four and a bit tins of 400g Heinz Baked Beans at Sainsbury’s.

 

Our Generic Regeneration Teams  still cost around £520,000 for rent collection, including legal costs. On average this still equates to £4.50 a week for tenants or 6% of a typical weekly rent.

For that you could still buy two and a bit 750g boxes of Kellogg’s Cornflakes at Sainsbury’s, or half a day return coach ticket to Milton Keynes from Golders Green.

 

We understand that these changes will have a negative impact on the cost of the service when compared to other London ALMOs. However, we judge this to be good value if a step change in performance is achieved and the new collection target is met.

We will aim to introduce significant changes through our service improvement plan over the coming year. We will also aim to drive more efficient work practices from the improved computer systems introduced over the past two years. By April 2008 we will have further reviewed the impact of these changes with a view to reducing the costs of collection whilst retaining the improved performance gained.

Direct Debit
In March 2007 we launched an initiative to increase the number of tenants paying their rent by Direct Debit. Direct Debit is a cheaper and simpler method of payment to administer, particularly when compared to giro payments made at the Post Office.

A £10 incentive payment was offered to tenants who converted to this payment method as part of the rent increase exercise. As a result of this around 560 tenants applied to convert to direct debit more than doubling the previous number.

We have now set ourselves the challenging target of getting 1,000 tenants paying through Direct Debit by March 2008.

Successful Tenancies

We have reviewed 90 evictions for rent arrears that took place between March 2004 and November 2006. When considering the information we have found that:

• Younger tenants between the age of 20-44 were at significantly greater risk of eviction relative to their overall tenant profile, in effect the younger the tenant the more likely they are to be evicted.
• Proportionately more males than female tenants are evicted overall. Black and mixed ethnic group tenants are more likely to be evicted when compared to the total profile of the Barnet Homes tenant profile.
• Grahame Park has the greatest numbers of rent arrears related evictions proportionate to the stock (this may also relate to the younger tenant/BME profile and is likely to apply to the other regeneration estates as well).
• 49% of those evicted were in the first three years of their tenancy indicating that problems with rent starts early on. This is reinforced by the fact that at March 2007 62.8% of new tenants were in arrears within the first 6 months of their tenancy and of these 21.4% owed over £250.

As a result we have launched the “Successful Tenancies” initiative which aims to create and maintain successful tenancies for all our residents. The approach recognises that some of our tenants are at greater risk of tenancies that fail. Where this arises we will take early preventative action to offer tenants support and the opportunity to retain a secure home within the responsibilities of their tenancy agreement.

This will help reduce the risk of tenancy failures through eviction with the social and financial costs that may arise from the resulting homelessness.

We have identified four key elements to our approach:

• Maximise all tenants income ensuring they get the help and advice they need to meet their financial obligations.
• Provide additional support to new tenants at the beginning of their tenancy to ensure they get off to the right start.
• Provide targeted support to younger and more vulnerable tenants.
• Carry out more research on factors such as disability, specific vulnerability, language and household composition in relation to risks of eviction for rent arrears.

An action plan has been agreed to develop our 'Successful Tenancies' approach with measures to test whether or not the measures have worked.

As improved arrears recovery is a corporate priority within the Barnet Homes Business Plan for 2007 -2012 we have agreed to place additional resources into the Rental Income Team. This will be to increase the level of supervision of the team, reduce the size of the patches for Housing Officers and to ensure earlier intervention and prevention work, particularly for new tenants.