To receive a verbal update on the Wessex Scheme from the Public Health and Professional Services Manager.
The Public Health and Professional Services Manager provided the Group with an update on the Wessex Scheme which included information that had been received only that morning.
The following background information was provided:
· Originally the scheme had been designed to assist people to stay in their own homes but who were unable to raise sufficient finance to carry out necessary improvements. The Council had invested a large sum of money in the Wessex Scheme and was part of a wider consortia of Devon authorities.
· In the past large numbers of people had been lost through the process and the scheme had been performing badly. It had been decided to run a pilot for 6 months to see if performance could be improved. This had included extending the range of works that could qualify for a loan rather than those just specified as a specific hazard. It also introduced a new, quicker application process.
The results of the pilot were summarised as follows:
· In the previous financial year just 2 loans had been issued to the value of £17k, however, in the year to date this figure was now approaching £80k (split between £56k drawn down and the remainder committed).
· In 2015 it had taken 29 weeks to complete a loan application as a result of necessary checks and survey’s etc. Wessex had been losing 80% of their customers through this process. Since the pilot had streamlined the scheme new targets had been set with a target date for the completion of an application being reduced to 8 weeks. The decline rate had now reduced from 80% to 40%.
· The situation was much improved with the average time taken to process a loan falling to 10 weeks and 70% of applications being completed within the required 8 weeks. This represented a significant improvement.
· Of those that had declined the uptake of a loan in the last 6 months this had been largely due to them finding an alternative to a loan, such as family members providing financial assistance or support from their bank.
· There had been a recovery rate of 100% in terms of those people who had taken up a loan.
· 40% of referrals were coming from external organisations such as AGE UK.
· It was a difficult target audience without a common demographic.
· Discussions were currently underway with Wessex regarding a new marketing plan for the coming year and there was a new online application process.
· There was a lot of competition within the market from pay day loans which often provide fast access to loans, typically at significant higher interest rates however.
· A further review would take place later in the year.
· It was stated that credit should go to Wessex for identifying the problems and for improving performance through the pilot working closely with the Council’s Private Sector Housing Team.
Discussion took place regarding:
· Very low bad debt rates.
· The maximum loan available was capped at £15k, however, if an application was received for just over this £, it would be considered as there was some discretion within the lending policy.
· The interest rate for a Wessex Loan was currently 4%.
· The results of the pilot were very encouraging.