Direct Payment Demonstration Projects: final reports

A useful report that warns of some of the key issues. Spikes of rent arrears occurred at the start of the project; but these were controlled by later in the timescale. Of course this may have been due to a lot of extra resources poured into recovery. There are many conclusions and recommendations…here are just two.

“The first few rent payments following a tenant’s first direct payment of HB are critical. It is during this period that most arrears accrue and some tenants whose rent accounts were up-to-date when the DPDP went ‘live’ fell into arrears in these early payment periods. Therefore preventing the build-up of early arrears is crucial because
analysis shows that tenants struggle to repay once arrears have accrued. Landlords therefore need to be particularly proactive in terms of rent collection when tenants first go onto direct payment. And it is important that they pay particular attention to recovering ‘early arrears’ and ensuring that these arrears do not become ‘standing’ arrears. Finally, landlords should target resources on minimising non-payment as it results in greater arrears (by value) than underpayment”.

Delivering direct payment is more resource intensive than landlord payment and landlords will need to allocate additional resource to rent collection and arrears recovery. And they will also need to consider (and implement) new and better ways of working, such as using text rent payment reminders, employing rent collection staff in different ways, and upgrading IT systems. Some of these initiatives will have a cost.
However, it is important to remember that their introduction is likely to result in cost savings in the medium and long term”.