Agenda item

To receive a report from the Deputy Chief Executive (S151) and the Head of Housing and Health providing an update on the corrective measures completed and next steps in order to rectify an identified historic rent setting error.

The Group had before it a report * from the Deputy Chief Executive (S151) and the Head of Housing and Health updating it on the corrective measures completed and next steps in order to rectify an identified historic rent setting error.

The following was highlighted in the report and discussion took place regarding:

·       The PDG were asked to note the number of actions which had already been commenced to correct this issue and which were ongoing. There had been substantial progress and dedicated resource had been provided to correct this issue.

·       Current and ongoing rent had now been corrected and updated bills sent out to tenants. The current rent formula had been reviewed externally and assurance provided it is now wholly correct.

·       There were up to 70 historic evictions for rent arrears (all or in part) which may have involved tenant who overpaid rent. These would be investigated individually against the mitigation set out in the report.

·       It was explained that the Regulator would like to see a clearer Member decision on this process hence the report before the PDG with a recommendation to the Cabinet on the overarching approach.

·       The Revenue and Benefits team worked very closely with the Department of Work and Pensions (DWP) to obtain and deal with the relevant data.

·       It was confirmed that some other local authorities were in the same position. It may not be known at this stage whether or not the DWP assisted a tenant with their rent via their benefits. The Council needed to bear this in mind when assessing the refund position in each case. More informed and complex discussions needed to be had with DWP reflecting the importance of their role in this process.

·       A refund policy had been drafted and every effort would be made to refund those tenants owed money in as timely a manner as possible.

·       An update would be provided to tenants in April, as well as the media.

·       There had been limited contact from tenants on this matter, information provided through the various media channels had been good.

·       The complexities involved could not be under estimated in the determining of each case, for example, some tenants had gone into and out of the benefit system during the course of their tenancy. Issues in relation to Housing Benefit and Universal Credit would also come into play and need to be factored in.

·       There were FAQ’s on the website and officers were always there to offer advice and support to housing tenants.

·       Sometimes it took new auditors to do a deep dive in order to pick issues up and this is what had happened on this occasion.

·       Local DWP officers had been extremely helpful but it was understood that there are DWP system issues preventing the easy resolution of these matters. The Universal Credit system was initially created at pace and there were limitations to the type of data retained. The Council would still push forward to the best of its ability so that nobody was prejudiced by unlawful delay.

·       Members were advised that if any of their constituents had any concerns then they needed to contact the Council as soon as possible. Tenants needed to be advised in the appropriate manner and letters did not always get read.        

RECOMMENDED to the Cabinet that:

1.     The tasks that have been further progressed in order to correct this situation be noted.

2.     Approval be given for the overarching approach to the review of historic MDH possession proceedings (evictions) where rent overpayments were made as set out in section 2 of this report.

(Proposed by the Chair)

Reason for the decision

The activity of MDH is funded through the Housing Revenue Account (HRA). The HRA is ring fenced and subject to specific financial controls.

Significant financial modelling has been undertaken in order to reach some of the key decisions being put forward in the Cabinet report in December 2024. We have also reflected on current balances and reserves held by the HRA and other legislative requirements that have to be delivered when evaluating how to correct this historic rent setting error. This modelling continues to be refined and further work is largely now dependant on further guidance and advice from the DWP as set out within the report.

While the current analysis shows that the majority of those affected have been historically undercharged, the position previously agreed is unchanged and there is no intention or ability to recover lost funds.

Therefore, it continues to be the case that the totality of the impact is experienced as a cost to the HRA rather than a rebalancing.

Note: (i) * Report previously circulated.

(ii) Cllr A Glover declared a personal interest as she was a Council tenant.