Shane Perkins explains how one small rural housing association has responded to the challenges of welfare reform
Welfare reform is having a devastating effect on the most vulnerable in society. But setting aside personal tragedies, it has had a positive impact on the sector. We have woken up from the cosy complacency that ‘payment direct’ provided to our business model and have had to prioritise working with tenants to tackle poverty, unemployment and a whole host of social ills.
Historically, this has been far from a core business objective given the extent of rental income received directly from the council. We currently receive 43 per cent of our rent via direct payments, and in speaking to colleagues this is a rather low figure. Woken from complacency, we are now facing up to the fact that a significant number of our tenants will struggle to make ends meet and paying their rent might not be as important as feeding their kids, and we have a moral duty to help.
So, how has Mid-Wales Housing Association, a small, rural association with just 1,500 widely dispersed properties in the sparsely populated counties of Powys and Ceredigion, reacted to this challenge?
Like most RSLs we realised we needed to increase our frontline staff to support tenants through the changes. But we could not simply take on more staff. Instead we needed to change priorities and transfer staff resources.
There was agreement amongst staff and board that we should restructure services and this became a key objective for 2013/14, together with changing the culture to provide more support to our tenants, especially in relation to the payment of rent. The principal driver was ensuring the
association’s continued financial strength. As one of my members put it: \’If we don’t maintain our income stream, then all of our tenants will suffer.\’
We appointed a ‘change manager’ to handle the restructure process. This ensured that an objective perspective was taken, with the whole process of change taking 12 months so far, resulting in a recruitment drive for 11 posts, while sadly some largely \’back office\’ staff have left us.
We enter 2014/15 with a new structure having created a new income management team aimed at supporting tenants to pay their rent on time, including a specialist benefits adviser. Eventually, all the income team will provide this advice, following training. We also work with other organisations including the Citizens Advice Bureau, and local credit unions. But funding for these services is subject to cuts (for example, Powys County Council has recently withdrawn its funding for the CAB, putting its viability in doubt).
Our whole approach is changing. We want to treat tenants as the customers they are, capable of making informed choices, especially about paying their rent. The association has adopted clear policy decisions whereby:
• Applicants must have a bank account to become a tenant – we will assist them to get one. This provides an incentive to open an account, but how the account is managed is obviously more important.
• We do not insist on direct debits, but do encourage them.
• Applicants must pay the first week’s rent at sign up. We have received some criticism from Shelter Cymru and Welsh Tenants about this, but very few applicants have objected, or said they found it hard to do. The vast majority simply accept it as normal given their experience in the private rented sector.
• Tenants are encouraged to pay rent at the start of the tenancy period not at the end of the week/month. During the year a number of our tenants have moved to paying at the start of the period, simply by being told that contractually that is what is expected.
• Applicants complete a pre-tenancy income and expenditure check, and are supplied with an estimated running cost for their new home. We are starting to work more with applicants to ensure they can sustain the tenancy before it\’s offered. If they can’t, then we signpost to, or give advice.
• If people demonstrate they can afford a larger property we trust them to make this choice. We do not restrict tenants to the bedroom tax definitions. This is a point of principle. If your whole approach is now about encouraging tenants to take responsibility for their own finances, and paying rent, then not allowing them to decide about the size of accommodation is a throwback to the paternalism of the 1960s.
To date, the changes have seen an increase in credit balances, which have mitigated the increases in arrears due to the bedroom tax, and overall current tenant debt has fallen. But this is a short-term mitigation and as more change occurs we must provide our tenants with help to sustain their tenancies. We know worse is coming for our tenants but at least we will be ready to help them.
Shane Perkins is chief executive of Mid-Wales Housing Association