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Opinion: A new approach to managing debt in the wake of the welfare reforms

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Opinion: A new approach to managing debt in the wake of the welfare reforms


Published by Anonymous for in Housing

Opinion: A new approach to managing debt in the wake of the welfare reforms Opinion: A new approach to managing debt in the wake of the welfare reforms

Moira Harries, senior income manager, Knightstone Housing

At Knightstone, we’re more than aware of the threats to our income that come in the form of the government’s welfare reforms. After the introduction of the ‘bedroom tax’ and capped entitlement to housing benefit, we experienced a significant increase in the number of debt cases that required our intervention, along with increasing rent debt levels.

The biggest risk to our income stream, Universal Credit, is yet to be introduced and is expected to put our Income Management Service under further pressure. In recognising our need to manage the risks presented by welfare reform and ensure rent debt is prevented, or minimised and managed effectively, we made the bold decision to redesign and restructure our income service.

In January 2014, we created three distinctive teams: Income Management, Income Control and Debt Enforcement, to deliver our new Income Management and Debt Enforcement Service. Each team has a specific focus, roles and responsibilities which interlink to deliver a comprehensive service to support the needs of our residents and meet our business objectives and requirements.

The key objective of our income management service is ‘right rent, right time’ and we’re putting maximum effort into preventing debt. Our new team structure is based on case escalation similar to traffic light principles of green, amber and red.

As a result of this redesign, our Income Management and Debt Enforcement Service has increased and is well placed to meet the challenges arising from welfare reform and, in particular, Universal Credit. Applying the traffic light approach to debt management across three teams, each with a specific role, ensures that all rent debt cases whether new, serious or persistent, will receive the focus and attention needed and residents will receive appropriate and timely contact and support.

We’re now able to target appropriate resources more efficiently and effectively. We’ve increased the number of Income Assistants in our team and they’re able to provide an improved support system, freeing up officers’ time. Officers are now able to focus effectively on debt prevention activities and on tackling new debt immediately, to prevent debt from occurring or escalating. For example, they’re able to get more involved in the set-up of new tenancies and welfare reform related contact and support.

Increasing the size of team has enabled our field based officers to take timely and appropriate action and have more personal, direct contact with residents to provide advice and support. We’ve improved consistency in the services provided, something that’s previously proven challenging to achieve when staff were based in different office locations. Officers have smaller caseloads and are able to respond quickly and tailor their approaches to individual customers’ circumstances.

We’ve separated out new and aged debt, ensuring different and timely actions are taken and new debts are spotted and prioritised. Having a larger team has also allowed us to monitor and regularly review debt cases under payment arrangements and we also have a more focused management of credits, former residents’ arrears and recharges.

We’ve invested heavily in new technology enabling our officers to deliver services in our resident’s homes. We have also recently commissioned use of some new software called RentSense, which operates as an arrears decision engine on top of our housing management system. The software analyses the historical transactional data on a rent accounts to assess their true arrears status. This helps our officers focus on more priority risk cases. We hope using this software will further help us reduce our rent arrears and help us to target residents at an earlier stage.

The combination of the impact of the new team, increased positive engagement with our residents and our robust approach has resulted in 450 fewer households being in debt, and a reduction in our arrears by £130,449…a pretty good start!


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