Barry Marlow writes:
I was the speaker straight after lunch at the staff conference. Two hundred staff, most of them with balloon animals on their heads courtesy of the previous presentation. My topic was ‘getting the rent in’. After lunch.
So I decided to stir things up:
“Have you ever evicted anyone for rent arrears?” I asked. Several mumblings that sounded like ‘of course’ and the nodding of heads.
“How many did you evict last year?”
Now this disqualified most people in the room, as this was an answer that could only come from the performance and policy department.
“78” was the offer. Yes, it was a largish landlord.
I chose to cut to the chase:
“How much did it cost you?”
I’m not deliberately awkward. I do tend to offer both happy and challenging approaches as a critical friend. But it seemed an obvious question. The silence was deafening as people pretended to be making notes. Trouble was, no-one had ever asked that question before. Ever. So when I suggested that the average cost of an eviction or abandonment for rent arrears has been reported (by Shelter and others) at around £8,100, you didn’t have to work in finance to come to a total of £630,000.
Now, if #ukhousing was any good at former tenants arrears this wouldn’t be a huge problem. But its record is rather poor, so over half a million pounds will be written off. And that’s not good value.
CUT TO THE CHASE – again
Housing management includes chasing and reminding people about rent payment. It’s a huge part of the business and it’s often fruitless, frustrating work. It’s also costly.
A series of letters forms the framework of the chase along with codes, timings and action decisions creating a detailed action plan. But is it value for money?
RETURN ON INVESTMENT
Every activity has a cost. Every letter considered, approved, sent. Every telephone call, abortive or not. Every home visit, abortive or not. Every re-payment agreement made, knowing that around 70% will breach in less than eight weeks. Every piece of advice, support, guidance, persuasion and negotiation. Every NSP served. Every court action. Every suspended order.
There, in a short paragraph, is almost a complete escalation procedure for a tenant in arrears. The question is a simple one:
How much does it all cost?
Once there is some idea of this, an even tougher question can be asked:
What is the return on that investment?
VALUE FOR MONEY
Value for money dictates that landlords be efficient and effective with their economy. To demonstrate this, in a busy service like rent arrears control, there must be a means of showing the return on investment (RoI). It’s an expensive, activity-consuming service and the outcome of arrears totals split into handy bands does not explain it.
Rent arrears levels can be manipulated simply by evicting a few more tenants, so the total arrears figure can hide the true costs – the costs of collection. The cost of the chase.
So, some messages for the staff conference:
* First, take a look at the activities concentrated on a sample of typical arrears cases. Cost everything, especially officer time.
* Next, create a process map that not only maps the decisions made but where those decisions are made and at what cost. Note down the cost. The more senior the decision, the more expensive it becomes. Where are the big figures?
* Then, create your ‘negative expenditure’ account which will tell you what you’ve spent on actions that gave you no return.
* Finally, just for something to fill the time, line up all the arrears letters (you might need to put a few desks together), stare at them for a minute and – ask ‘why?’
And then, I shall advise, as a trusted critical friend, to take those bloody ridiculous balloons off their heads and grow up.