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Opinion: Keeping rent arrears stable

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Opinion: Keeping rent arrears stable


Published by Anonymous for in Housing and also in Communities, Finance

Opinion: Keeping rent arrears stable Opinion: Keeping rent arrears stable

By John Bryson, employment and inclusion manager, East Thames

The relationship between welfare reform and debt has been well documented: recent research found that nearly 8 out of 10 low income families affected by welfare reform were in debt, with families spending an average of £34 a week repaying debts.  

East Thames’ neighbourhood managers, customer account managers and welfare benefits advisors have run a targeted campaign to identify and support the residents most at risk, and we have managed to keep rent arrears relatively stable: arrears attributable to the bedroom tax are worth less than 0.1% of our rent roll.

However, we know that arrears are just part of a larger scale problem and that the best way to help our customers to stay out of debt is to help them secure stable employment. This has been a key part of our welfare reform work over the last year and as it becomes more difficult to access funding such as Discretionary Housing Payments, it will become even more important.

Since March 2013 our customer account managers and welfare benefits advisors have been referring all residents who fall into arrears, and who aren’t in work, to the employment and inclusion team. We give them priority, seeking to contact them within 48 hours of referral and giving them immediate access to support.

Through externally funded projects we also provide support to people across east London and Essex who aren’t necessarily our residents but who are among the people furthest from the job market such as young people, women in social housing and people with a history of issues with mental health.

Across this broad spectrum we’re seeing ever-increasing levels of personal debt. In particular we’re seeing people who are struggling to pay their mobile phone, utility or credit card bills; who are at risk of defaulting on their mortgage; or who owe money to essential service providers. We’re used to helping people whose personal circumstances make it hard to find work. But we’ve found that people in debt, who face a very particular set of challenges, need more intensive support. 

Firstly, debt causes immense stress so it’s never easy for people to pick themselves up and dedicate themselves to finding a job. This makes one-to-one support particularly important and our mentoring scheme for example has worked very well for these customers, providing them with someone who can become a role model and confidant.

One of our residents, Maria, was referred to us after she fell into arrears and, after completing a work placement at our offices, built a particularly strong relationship with the mentor we placed her with at Barclays, Amanda. She is now working at the NHS and told us she couldn’t have done it without Amanda’s support.  “I always get an honest opinion from Amanda. When I lose motivation, she encourages me to keep going and believe in myself. Her dedication, continuous support and professionalism have really inspired me.”

The second challenge is that when you get a job and come off benefits, you’re often not better off straight away as there’s a gap between your benefits being stopped and getting your first pay cheque. This is a nearly impossible situation for people who are under pressure from creditors, who are actually more likely to chase them once they are working. 

We work closely with our customers to help them plan their finances and work out how to bridge the gap. If they are in rent arrears, we can help them create a gradual repayment plan. For other forms of debt, we offer to call their creditors on their behalf to arrange a repayment plan. We know our customers’ rights and we tend to hold more sway with large companies.

A final challenge is more insidious. When you’re broke, you’ll do anything you can to keep a roof over your head and feed your family, and it is a very real fear is that our customers will be tempted to borrow from a loan shark. It’s even more difficult to build motivation to find work then, because it’s the last thing on people’s minds – their first concern is the safety of their family should they struggle to pay back the debt. Loan sharks destroy lives.

We encourage our customers to be open with us and if someone tells us they are using a loan shark, we will always advise them to go to the police. Unfortunately, often our customers don’t share this information with us and I’m sure some of them are being exploited by loan sharks right now. We’re not specialists, but we aim to build as much knowledge as possible. I have benefitted from attending the Financial Inclusion Group in Tower Hamlets, which is looking at ways to deal with this complex problem; we’ll keep adapting and learning how to look for the signs.


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