Council to write-off £800k in rent debt

The arrears which total £807,006 from former tenants includes 2001 cases which are dated to the end of March 2015.

The cases are made up of 114 abandonments (£120,290), 41 evictions (£86,583), 497 where the debtor has since died (£107,734), 289 where no forwarding address was left (£212,474) and 1,060 were all avenues for recovery have now been exhausted (£487,097).

The department of Housing Solutions will seek permission from the Housing and Social Work Committee on Thursday to write-off the money.

However, Elaine McHugh, head of housing solutions, warned that this wouldn’t necessarily mean the matter was closed and the option to pursue some of the money may remain open.

She said: “Due to concentrated efforts within the service, when compared with last year’s figure, the value of debt within the ‘Recovery Exhausted’ category reduced by 14 per cent.

“Whilst the above sums will be written off through the council’s final accounts, where possible and practicable, efforts will continue to secure payment of outstanding rent balances from former tenants.

“This will involve the pursuit of debts in a formalised manner, using staff from within the service and Sheriff Officers, incorporating a variety of legal options available.”

The council has a total annual rental income of £1 09 million, meaning the write−off sum of £807,006 equates to 0.74 per cent and will be offset against provision held within the council’s balance sheet to the end of March last year.

Ms McHugh belives that due to welfare reform the level of rent arrears is set to increase.

She said: “The impact of welfare reform had the effect of a 19 per cent increase in rent arrears during financial year 2014/15.

“However, this has been followed in 2015/16 by a reduction of six per cent due to a range of initiatives employed by the service in response to the changes.

“The council will now be focused on looking at how it can best address the challenges posed by Universal Credit, as we progress towards a full rollout by April 2018.

“Notwithstanding these efforts, recent trends, combined with current assumptions about the impact of welfare reform on rent arrears, indicate that the level of write-off will increase.”