15 March 2004 NOT EXEMPT HOUSING RELATED DEBT

Transcription

1 STIRLING COUNCIL THIS REPORT RELATES TO ITEM 6 ON THE AGENDA HOUSING PANEL ENVIRONMENTAL SERVICES - HOUSING SERVICES 15 March 2004 NOT EXEMPT HOUSING RELATED DEBT 1 PURPOSE 1.1 The purpose of this report is to examine the current allocations policy with regard to registration and transfer applicants who have housing related debt, with a view to determining whether an amendment is needed to strike a balance between the rights of applicants and the need for the Council to collect monies owed. 2 SUMMARY 2.1 This report examines an issue in the Housing Allocations Policy and considers alternative options with a view to maximising income for the Council. These options relate to registration and transfer applicants who owe housing debt which is over one twelfth of the annual rent payable. These are as follows: Edinburgh City Council scheme: Transfer and Registration applicants must clear 50% of any outstanding housing debts within a 3 month period to become active on housing lists. The applicant must then adhere to a further repayment arrangement to clear the balance. This scheme is currently being amended so that Transfer applicants and tenants wishing to Mutually Exchange must fully clear any Housing debt before becoming active to transfer Fife Council scheme: A repayment arrangement must be such that it will clear any outstanding housing debt within a 6 month period. This applies only to Transfer applicants. Registration applicants are subject to maintaining a 3 month arrangement to become active Stirling Council option 1: Registration and Transfer applicants with housing debt would make a repayment arrangement to clear the outstanding debt in a 6 month period. Mutual Exchange applicants would have to clear the full outstanding debt to become active on housing lists Stirling Council option 2: Registration applicants and Transfer applicants with housing debt would have to reduce the debt by 50% in a 3 month period to become active and then adhere to a further repayment arrangement to clear the balance. Mutual Exchange

2 -2- applicants would have to clear the full outstanding debt to become active on housing lists. 3 RECOMMENDATION(S) 3.1 The Panel is asked to:- Consider the options described in this report for amending the current Allocations policy in relation to applicants who have housing related debt. 4 CONSIDERATIONS 4.1 Background At the last meeting of the Housing Panel on 29 January 2004 the Panel considered the possibility of taking a more rigorous approach to the recovery of housing related debt from applicants for Council properties The Housing Panel agreed in principle to consider amending the current policy Members of the Panel are asked to consider the following options:- 4.2 Edinburgh City Council Scheme Edinburgh City Council, following the introduction of the Housing (Scotland) Act 2001, considered stipulating that all transfer and registration applicants, who owe more than a twelfth of the annual rent payable, clear half the debt owed. The applicant then had to adhere to an agreement for 12 weeks to become eligible to be active on allocation lists This scheme has now been further refined and proposals are now being put forward to incorporate the amendments described in and Former tenants with housing debts that are more than one twelfth of the annual rent payable will be required to clear 50% of their outstanding debts to the Council within a three month period to become eligible for rehousing and then maintain regular payments to the remaining 50% of the debt once they have become active on allocation lists This modification of the scheme takes a firm line with regard to recovery of debt whilst also taking account of applicants with housing need Further to this Transfer applicants and tenants applying for Mutual Exchanges will only be considered eligible for transfer once the full debt owed to the Council has been repaid Currently no information is available from Edinburgh City Council to determine whether their scheme has been successful. No

3 -3- measurement of rent collection levels has been taken for applicants and numbers of former tenants reapplying for housing with housing debt have been minimal Edinburgh City Council are undertaking a consultation process with regard to the scheme and other changes to their Allocation Policy from late April Therefore the current scheme may be subject to further amendment. 4.3 Fife Council Scheme When the 2001 Housing Act came into force Fife Council took the view that, as there was no definition within the Act of an arrangement. There was therefore scope for them to determine what would constitute a suitable arrangement for registration and transfer applicants wishing to be active on housing lists Fife Councils policy suggests that any repayment arrangement made with a tenant or applicant should aim to clear the debt within a six month period. If the arrangement is maintained for 3 months the applicant then becomes eligible for a transfer. However it appears that in practical terms this is not adhered to rigidly for registration applicants where it has been considered that housing needs take priority and is mainly applied where current tenants in arrears request a transfer Fife Council have not been able to closely monitor whether the scheme has been successful or how widely the scheme is being applied by its local housing offices. 4.4 Stirling Councils current scheme The Councils current scheme, as described in the Housing Panel report of 29 January 2004, is very similar to those adopted by most other Local Authority Landlords in Scotland since the introduction of the 2001 Housing (Scotland) Act. 4.5 Stirling Council Option Applicants for the housing list, both Registration and Transfer, who have housing debts amounting to more than one twelfth of the annual rent payable would be required to make a repayment arrangement which would ensure that the debt would be cleared within a 6 month period. If the agreement was maintained over the first 3 months of the agreement period the applicant could then apply to be made active on the list. The applicant would then be required to maintain the repayment schedule to clear the debt. The agreement would have to be of a regular instalment amount either on a weekly, fortnightly or monthly basis. Instalments would have to take account of clearing the outstanding balance within 6 months. For an example if the tenant owed 500, weekly instalments would be Tenants wishing to Mutually Exchange would be required to clear all outstanding housing debts before becoming eligible, as there is no requirement in law to accept arrangements from these tenant.

4 Stirling Council Option Both Registration and Transfer applicants, who have housing debts amounting to more than one twelfth of the annual rent payable would be required to repay 50% of the outstanding debt over a 3 month period to become active. This would need to be paid by regular instalment amounts, weekly, fortnightly or monthly. For example if the tenant owed 500 they may choose to pay two instalments of 75 within the 3 month timescale along with weekly instalments of Once active the applicant would then be required to renegotiate a repayment arrangement for the remaining debt and maintain payments The applicant will not be made active until both 50% of debt paid and three months consecutive payments have been made as per the agreed arrangement Mutual Exchange applications would be subject to the same regulation as described in The Effects of changing the Policy It is anticipated that collection levels of housing debt due may increase if the policy was changed to reflect the options described in 4.5 or 4.6. Although there is currently no clear performance data available from the other Authorities who have employed differing policies to the norm to confirm this. Additionally amending the current scheme would protect the Councils income levels whilst at the same time encouraging the tenant in arrears to clear the outstanding balance/s It is possible that an amendment to the Housing Allocations Policy as described in 4.5 and 4.6, as well as the Edinburgh City Council and Fife Council approaches, may appear to move away from the spirit of the Housing (Scotland) Act Any amendment of these types may result in a legal challenge. However, equally the present scheme appears to be inequitable with regard to tenants who pay their rent on time and have no rent arrears Any impact on applicant s ability to pay or potential hardship will be closely monitored and reported in a future paper to the Housing Panel. 5 POLICY IMPLICATIONS 5.1 The report sets out options for amending the Allocation Policy in relation to housing debt. 5.2 The report is consistent with the Councils strategic aims and Quality and Best Value. 6 CONSULTATIONS 6.1 Housing Service Area Managers and Legal Services were consulted.

5 -5-7 RESOURCE IMPLICATIONS 7.1 Effective and consistent management of debts to the Council represents good fiscal management. 8 BACKGROUND PAPERS 8.1 Report to Housing Panel 29 January Amendments to the Housing Allocation Policy. Author(s) Name Designation Tel No/Extension John Maciver Service Manager - Tenants Services Approved by Name Designation Signature Brian Devlin Director of Environmental Services Date Reference