Adapting to changes in Income Management: Inspection findings & what is expected in the new financial climate Yvonne Davies Head of Housing and Economic Development (North) November 2010

2 What I will be covering Overview of trends Lessons learned from inspections and good practice What’s expected of social landlords in response to the new economic climate Timetable for future Audit Commission inspections The future of inspection – how can social landlords be helped to deliver quality services for their tenants

Our inspection approach Why it matters

4 The Income Management KLOE & Housing Standards Arrears recovery Do you minimise loss of income by taking prompt and appropriate action to recover both current and former service user arrears and other debts? Debt advice Do you ensure that service users receive effective welfare benefit and debt advice to maximise income and manage debt? Rent setting Do you comply with the statutory requirements and adopt good practice methods in terms of rent and service charge setting? TSA Standards Little reference to aspects of income management – no direct reference to financial inclusion

Overview of trends

6 LA arrears as % of total debit

7 TSA National Standards – Benchmarking baseline performance 2008/09 (May 2010) Upper Quartile MedianLower Quartile Current tenant rent arrears as % of rent due 2.36%3.3% (highest London 5.49%, lowest South West 2.52%) 5.12% Direct cost pp of rent arrears and collection £52.45£65.31 (highest London £87.67, lowest South West £57.16) £79.73

Lessons learned from inspections …and good practice

9 Some recent ‘trends’ from housing inspection – positive first More focus on prevention & early intervention –Benefit / needs assessment at sign-up & new tenant visits more common More use of specialist teams More ways to pay rent & most cost effective methods promoted More use of incentives for clear accounts Improved information and targeted publicity campaigns More use of and texting to remind tenants Improved joint working with HB teams The rise of ‘financial inclusion’ – holistic approach –Benefit & debt advice services & take-up campaigns (see weakness)

10 Some things still need to improve.... Performance on setting service charges and recovering sundry debts, FTAs and rechargeable repairs is still weak Use of e-payments and 24/7 services inconsistent Limited use of ‘out of hours’ work for income collection Good Court liaison and presenting own Court cases still not the norm –Few using possession claims online Inconsistent approaches over benefits advice services –Lack of robust service level agreements with providers / monitoring performance –lack of integrated corporate debt recovery policies –Profile of customers in debt/arrears not used to target take-up –Not measuring success of work in delivering broader community objectives

11 Who has done well with income management in the last two years? LAs (ALMOs) 22 services assessed as good, and five ‘excellent’: Gateshead Housing Company (Feb 2009) Berneslai Homes (June 2009) Wear Valley - Dale & Valley Homes (Sept 2009) Newham Homes (Feb 2010) Stockport Homes (Feb 2010) HAs 14 services assessed as good, and two ‘excellent’: Manchester & District HA (May 2009) Daventry & District Housing Association (November 2009)

12 Positive Practice in Income Management: Protection from eviction and better working with the Courts (Your Homes Newcastle & Homes for Islington) Tackling former tenant arrears (Manchester & District – see later session) Financial inclusion & money advice (Solihull Community Housing / Sandwell Homes) Using profile data to target support (Cheshire Peaks and Plains) Partnership approaches (Aire Valley Homes / Cobalt Housing) Reducing Worklessness (St Georges Community Housing) The Housemark website identifies a range of good practice

13 Who has done well recently on financial inclusion? Solihull Community Housing Cheshire Peaks & Plains Cobalt Housing (Liverpool) Aire Valley Housing (Leeds) North East Homes (Leeds) Salix Homes (Salford) Sandwell Homes

14 Some Benefit inspection findings (to Sept 2010) 19 ‘poor’ (zero star) ratings, 24 ‘fair’ (one star), only 3 ‘good’; Key concerns: –Service improvements from council’s perspective rather than the customer’s –Look at ‘own’ performance rather than relative performance –Low profile of the benefit service in council & weak links to local economy –Lack focus on fraud, overpayments, value for money and Benefit take-up continues...

15 Some Benefit inspection findings (to Sept continued) Positively: –Improving performance processing claims (inspected councils improved new claims from 30.5 days in 2007/08 to 25.3 days in 2009/10) –Reduction in lost benefit subsidy from £6.4m in 2007/8 to £1.2m in 2009/10 (inspected councils)

What’s expected of social landlords in response to the new economic climate

17 Recession – impact and challenges The recession has increased the number of people needing benefit advice, and those at risk of homelessness Cuts to benefits & increasing unemployment will increase caseloads High expectations of public services at same time as cuts in public expenditure Need to make best use of what central funding is available Links to wider outcomes – getting people money quickly and accurately helps to give confidence to take work

18 How might your area be affected? There are some very simple factors which might indicate how well your area is placed to get through the recession. Is there a history of entrepreneurialism in the area? –New business start ups Is the population able to take advantage of new job opportunities –Skills levels and proportion of the population which is unskilled Is there a balanced and diverse economy, not overly reliant on one sector? –Sectoral breakdown

19 Options for intervention People BusinessPlace People; –Advice (Debt/Benefits/employment) –Skills –Jobs (apprenticeships etc) Place; –Branding/Marketing –Spatial strategies –Regeneration Business; –Information/Advice/signposting –Procurement –Intervention

20 Components of a good response Good local knowledge and up-to-date intelligence Robust & integrated strategies, understood by all & delivered in partnership Clear objectives and progress monitoring Targeted action - aligned with local priorities, Creatively resourced Of appropriate scale

21 Your challenges – questions to ask What is happening where your service users live and work? How have they been affected? Who are the most vulnerable to likely changes? Have you got an appropriate response in place? Are you integrating action with other agencies to make best use of resources to tackle agreed priorities? Are you doing the right things? What matters most to customers? Are your plans realistic? How do you measure success?

22 Timetable for future Audit Commission inspections 2010/11 housing inspections significantly reduced Some ALMO inspections may continue post April 2010 (HCA commissioned) The Commission is being abolished after December 2012 Auditors will complete work on 2010/11 and 2011/12 accounts and claims The changes require legislation, which we expect to be debated in the Autumn term

23 The future of inspection – how can social landlords be helped to deliver quality services for their tenants? The review of social housing regulation –Consumer regulation functions of TSA transferred to HCA –Inspection retained as a regulatory power; address serious failing against standards; opened up to the market Focus on local assessment of quality of services –Focus on local solutions to resolve tenants’ problems –Tenant Panels may request an ‘inspection’ How will tenants assess performance & improve services? –Providers to use self-assessment and peer review to improve –Landlords to provide timely performance information to tenants –How compare performance with others?

Thanks for listening More information… National studies: When it comes to the crunch - How councils are responding to the recession Good practice