The Management of Social Housing Rent Collection and Arrears

The Northern Ireland social housing sector comprises approximately 115,000 dwellings and, in 2006-07, the total rent collectable in respect of these properties was £344 million.  A report published today by John Dowdall CB, the Comptroller and Auditor General, examines the performance of the social landlords - the Northern Ireland Housing Executive (NIHE) and the Housing Associations - in collecting rent from their tenants.  

Main Findings

Collecting rent and recovering arrears is challenging for social housing landlords and measuring performance in this area can be complex (Part 1)

  • Good practice on rent collection and arrears management in recent years has highlighted the importance of developing measures which prevent rent arrears from arising in the first instance.  The report says that there is a particular role for such preventative measures at the current time, given the difficult economic climate.

NIHE’s overall rent collection performance is variable (Part 2)

  • Since 2001-02, NIHE’s only corporate target has been that year-end gross arrears should not exceed the previous year-end balance.  Assessed against this target, NIHE has performed well over recent years.  
  • However, the reduction in gross arrears over this period has been achieved largely through writing-off high levels of tenant debt - while gross tenant arrears fell by £3.3m from 2001-02 to 2006-07, total write-offs over the same period amounted to £10.6m.
  • The report notes a number of underlying issues in relation to NIHE’s rent income performance, including a reduction in the percentage of total rent collected and high levels of individual arrears.  The Audit Office considers that there is scope for NIHE to enhance its target-setting regime and further develop its approach to benchmarking as a means of driving forward performance improvements.  

NIHE is in the process of implementing an improvement plan for rent collection and arrears management (Part 3)

  • Compliance with good practice in housing management is crucial to optimising both standards of service to tenants and income from rent and, in recognition of this, NIHE has in place an inspection regime.  The Audit Office’s examination of reports from NIHE’s Inspection Unit showed evidence of non-compliance with the arrears manual in 15 out of 19 reports reviewed.
  • In 2006, NIHE commissioned an external consultancy review, which examined the totality of its rent income management.  This review reported that improvements could be made to rent collection and arrears recovery procedures and practices and, in 2007, NIHE produced an improvement plan to address weaknesses raised by the review.  The report says that compliance with the new procedures will be key to their success, particularly in view of the evidence of problems in this respect with existing procedures.

Housing Associations’ rent arrears performance is variable (Part 4)

  • Annual performance statistics supplied to DSD by Housing Associations for the period 2001-02 to 2005-06 indicate significant increases in gross arrears for the sector overall. However, the Audit Office says that concerns with the completeness and accuracy of arrears data in recent years undermine its usefulness and relevance.  
  • The variations in the size and nature of Associations and the differing client groups means that some differences in arrears performance, and in approaches to arrears prevention and management are to be expected.  Nevertheless, the report says that central target-setting and monitoring by DSD could act as an important driver to deliver improvements.