Presented by Rob Emery Head of Community Services and David Hull Money Advice Coordinator 11th Septe

1
Presented byRob EmeryHead of Community
Servicesand David HullMoney Advice
Co-ordinator11th September 2007

• An update to The Regeneration Scrutiny Board on
  the role of the Money Advice Team

2
Staff Structure
3
Income Collection

• Annual Rent Debit 35m
• Target for 2007/8 to collect 97.6 of debit and
  arrears brought forward.
• 06/07 performance 97.44 (highest ever achieved
  by SMBC/SCH)
• Rent Arrears increased by 127,000 last financial
  year.
• Greater Emphasis on Prevention of debt rather
  than enforcement.
• Income Collection team and Money Advice team aim
  to keep people in their homes rather than evict
  them.
• Income Collection team have an Accounts Manager
  who focuses on Corporate Debts such as rent
  arrears, council tax arrears and overpaid housing
  benefit to ensure that tenants are not robbing
  Peter to pay Paul.
• Prevention Officer contacts all new tenants
  within a month of the tenancy starting to discuss
  rent.
• Systems Thinking review taken place to improve
  performance and efficiency

4
Income Collection - initiatives

• SCH introduced a rent incentive scheme to reward
  good payers
• currently consulting on introducing 4 rent free
  weeks from 2008/9
• rent statements now sent on quarterly basis.
• Balance of account sent out monthly to all
  arrears cases.
• Regular promotion of Direct Debit as cheapest
  method of payment
• Payments methods increased to include Pay Point
  and Pay Zone
• Developing rent statements on line
• Revs Bens are piloting benefits online the
  trial calculation which counts as the application
  for HB - but we still need the proof of income!!
• Looking at alternative legal action rather than
  possession such as Attachment of Earnings.
• Arrears team targeting personal contact with
  early evening phone calls being made to tenants
  who we cant get in the day.
• Regular articles in the newsletter on rent
  matters.

5
Income Collection team links to Money Advice

• Income Collection team target their resources by
  profiling the debt.
• Work split between cases with legal action and
  non legal action and prioritised dependent on the
  level of debt and whether accounts are increasing
  or reducing.
• Arrangements made to clear debt, if the tenant is
  having financial difficulties or has other debts
  then a referral is made to the money advice team
  for specialist help.
• Prevention Officer and Corporate Debt Accounts
  Manager make referrals to help maximise a tenants
  income if they believe the tenant may be entitled
  to additional benefits.
• The money advice team also offer emergency
  appointments for tenants following a Pre
  Eviction Interview by the Income Collection
  Manager

6
Costs of Eviction

• The ultimate sanction for someone who does not
  pay their rent is eviction
• However there are significant costs attached to
  this action, quite apart from the 365 in legal
  costs (excluding staff time) and the inability to
  recover the debt.
• There is the potential rent loss whilst void,
  which could be 264 (4 weeks rent)
• Storage costs following eviction 335
• In addition there are repair costs which could be
  1,200
• But most importantly are the unquantifiable
  emotional costs that the family have to bear
  through being homeless.
• In addition there are the costs attached to
  Social Services in respect of the families.

7
Money Advice Team

• History Background
• Established 15 November 2004
• To provide a specialist team to help our tenants
  leaseholders who are struggling to pay their
  rent council tax whose homes livelihoods
  are at risk.
• To help their clients manage their debts better
  by showing them how to budget then to negotiate
  affordable, sustainable offers of repayment in
  respect of their debts.
• To develop a range of self help materials that
  tenants/leaseholders could use to help
  themselves.
• The Team consists of three people, a co-ordinator
  two specialist money advisors, proficient in
  both debt welfare benefits.
• Early realisation that the key to tackling debt
  problems was income maximisation.
• The Team were trained extensively on welfare
  benefits so that their efforts could be
  concentrated in this area.
• They then started looking for appropriate
  charities that they could approach on clients
  behalf for help assistance.

8
What does the service cost?

• The service is free to clients
• The cost of running the service for 2005/6 was
  82,670 (vacancy for 3mths)
• The cost for 2006/7 was 92,932.
• The budget for 2007/8 is 97,330 (increase in
  staff budget and Professional Indemnity Insurance
  costs)
• The average cost per case is currently 444.09.
  (The average cost of an eviction is 2,164)
• From when the Team was established to date we
  have identified 1,260,121 of potential Welfare
  Benefits that clients were entitled to.
• 719,246.25 of which we know has been claimed..
• In addition, of the cases who have maintained the
  payment arrangement set by the team rent arrears
  have reduced by 92,082 since April 2006

9
Value for Money
10
Benchmarking

• SCH have attempted to benchmark the money advice
  service through networking with members of
  Housemark.
• Five other housing organisations agreed to
  benchmark but all pulled out when they saw the
  level of service provided by the team.
• Most other in house teams offer general advice
  and signposting
• The SCH service was awarded the Community Legal
  Services quality mark for casework. In fact the
  Assessor commented that the files were of a
  quality and standard comparable to those seen at
  law centres.
• Currently discussing with the Chartered Institute
  of Housing and Housemark the possibility of
  creating a benchmarking club.

11
Who uses the service?

• The service is available to all tenants of SMBC
  and people
• whose homes are at risk due to multiple debts.
• From November 2004 we have taken on 468 casework
  clients
• who have used our services. Of these cases -
• 378 were SCH tenants, 45 were homeowners, 22 were
  private
• Tenants, 12 were with Housing Associations 11
  others.
• 410 clients relied on either benefits or
  benefits/income, i.e.
• only 58 relied on income alone.
• The team have produced a 'self help' pack which
  is available
• from Area Housing Offices, Solihull Connect, the
  Contact Centre
• or can be downloaded from our internet. We are
  aware of over 70 requests for the pack to the
  Contact Centre

12
Case study

• An elderly tenant was having real difficulties
  with getting out of her bungalow a Safe Sound
  Officer asked me to see her. In initial telephone
  discussion, it appeared that she may be entitled
  to Attendance Allowance an application was
  requested for her.
• I helped her complete the form at her home sent
  off the application. She later advised me that
  she had been awarded the higher rate of 64.50
  per week. Advised her that she was entitled to an
  increase in her PCG PCS and applied on her
  behalf. 47 pw increase in PCG 8.50 pw PCS
  awarded.
• As a result of these benefits, she was then
  entitled to full Housing Benefit of 63.87 pw
  15.11 pw of CTB. Total benefits secured of
  198.98 pw. The question that this poses is How
  did that lady manage before we helped her?

13
Case study

• A client called to see us because he was being
  hounded by a sub prime lender who had lent him
  money to buy a car against a Bill of Sale over
  the car.
• On investigation, we discovered that the Bill of
  Sale was incorrectly drawn up with advice
  guidance from Trading Standards, we were able to
  arrange for this bill of sale to be declared null
  void.
• The fact that the sub prime lender was charging
  interest at something like 177pa is a side
  issue!

14
Case study

• A client was referred to us from the ICT as he
  had rent CT arrears of approaching 1k in total
  was faced with potential eviction, bailiffs
  etc.
• We discovered that the main reason for his debts
  was the amount that he was paying in loan
  repayments. We drew up a realistic financial
  statement, made arrangements in respect of his
  rent arrears CT to repay these at realistic,
  affordable, sustainable amounts.
• We then offered his other creditors token offers
  of repayment. We provided a copy of his financial
  statement with his agreement asked that they
  stop charging interest promised that once his
  rent CT arrears were cleared we would re-look
  at his situation. All creditors have agreed to
  our requests.

15
A typical MAT case. Initial stages

• Review and verify income details.
• Carry out a Welfare Benefits check for all
  members of the household.
• If any benefits are highlighted, research fully
  whether client or family member are entitled to
  the benefit.
• If so, obtain application form, assist with
  completion and submit it.
• Monitor results of applications.

16
A typical case. Preparing the budget

• Once income is maximised, look at the outgoings.
• Detail all of the expenditure that needs to be
  paid to keep their home intact and preserve their
  liberty, i.e. current rent any arrangements
  regarding rent arrears, current council tax and
  any arrangements regarding arrears.
• Include all other essential items of expenditure,
  i.e. gas, electric, food, clothing, travel costs,
  TV licence, phone, etc.
• Is the budget realistically drawn up to enable
  the client to live with it?
• All of expenditure will be compared to what is
  considered reasonable throughout the Money Advice
  industry.
• Is there any surplus income to use to negotiate
  in respect of non-priority creditors?
• The client must sign the bottom of the budget to
  confirm that they are happy with it

17
A typical case. No funds available for debts

• In many cases, there will be no money available
  and then token offers need to be made.
• It is impressed on the client that these token
  offers need to be made as a gesture of goodwill.
• In these cases, negotiations with creditors are
  often very long and drawn out and may involve
  dealing with debt collectors etc.
• Very often letters will be sent to several
  different agencies who are dealing with the
  collection of the same debts.

18
Timescales for dealing with a case

• It is most unusual to be able to complete
  everything at the first interview, despite us
  streamlining the interviews as much as we can.
• Benefit applications can take a significant
  amount of time to process and clients situations
  change regularly as well, which entails altering
  budgets.
• Some cases are more time-consuming, especially
  where there are either physical or mental health
  issues to contend with as well.
• It is not uncommon for cases to be live for
  more than 12 months.

19
A typical case. Negotiating with creditors

• If there is surplus income negotiations can be
  undertaken on a pro rata basis with creditors.
  Invariably this is a lengthy and time consuming
  process.
• Once agreements reached with creditors, client
  then has to make the required payments, but
  creditors invariably come back to MAT if payments
  are not made.
• In addition agreements will normally only be for
  a 6 month period and usually we will assist
  clients with the first review. Thereafter we
  expect them to do their own reviews.

20
A not so typical case

• We are seeing increasing instances where the
  clients will not be able to repay their debts
  over a prolonged period of time and we then need
  to provide them with details of other options for
  dealing with those situations, i.e. IVAs or
  bankruptcy.
• If an IVA is the recommended choice we will
  provide details of where to find appropriate
  help.
• If bankruptcy is the appropriate course of action
  we will help the client to complete the
  Bankruptcy Petition, giving them all of the
  necessary advice to undertake an informed
  decision.

21
Other issues to consider with the client

• Are charity applications appropriate?
• Introduction to EBICo?
• Introduction to Energy Efficiency Centre in cases
  of fuel poverty?
• Introduction to the Credit Union?
• Introduction to a bank for a basic bank account?
• Some financial literacy type training?
• Better off calculations

22
Towards the end of Money Advice involvement with
the client

• As a result of the budgeting advice and guidance
  given, it is hoped that clients will have a
  better understanding of the need to budget and
  plan ahead to meet regular outgoings.
• They will be better equipped to make financial
  choices in relation to buying financial products.
• They will be more pro-active towards their
  financial situation rather than reactive towards
  it.
• They will be able to pay their rent on time,
  regularly.

23
Achievements

• Awarded the Quality Mark from the Community Legal
  Services Commission for General Help with
  Casework. This is an industry wide recognised
  award based on an audit of the work undertaken on
  clients files as well as the procedures that are
  in place for managing the cases. This will
  include the referral processes that are in place
  as well as ensuring that the quality of advice
  given is always maintained at a high standard.
• Have highlighted 1,260,120.88 of benefits for
  clients that they were not aware of. Of this
  figure we know that 719,246.25 has actually been
  secured.
• Registered as an Authorised Agency with British
  Gas Energy Trust Scottish Gas Energy Trust
  allowing online applications for trust funds for
  our clients
• Played a leading role in the establishment of
  Affinity Arrangement regarding the supply of
  competitively priced electricity gas in order
  to tackle fuel poverty
• In the process of developing an inter-active
  website, allowing service users with internet
  access the ability to prepare their own financial
  statements, which are self calculating, from
  there to prepare their own letters to creditors.
• Currently offer work experience type single job
  placements to local long term unemployed people
  on the New Deal Programme.

24
Development of the Credit Union

• MAT approached NBCCU last year to look at the
  possibility of developing a credit union in
  Solihull. Credit unions are financial
  co-operatives owned and controlled by their
  members that offer savings and loans at a
  reasonable and more affordable rate.
• An approach was made the Financial Services
  Authority for permission to extend NBCCU's
  'Common Bond' into North Solihull.
• Therefore from April 2007 new members from North
  Solihull were able to both save and borrow with
  them. Credit unions offer an alternative to
  doorstep lenders who charge a higher rate of
  interest such as Provident, Brighthouses and
  Shopacheck.
• This initiative is seen as a very real step
  towards tackling the social and economic
  deprivation that exists in North Solihull. For
  example a 500 loan from a doorstep lender would
  typically cost 890 to repay over 12 months but a
  500 loan from NBCCU would cost around 540 over
  a year.

25
Development of credit union (continued)

• Being a member of NBCCU means that you will be
  able to save a regular amount on a weekly or
  monthly basis, however small, in a secure savings
  environment. This money can be withdrawn to pay
  for anything that you are particularly saving
  for. An example of this could be new school
  uniforms or for Christmas.
• Once a member has demonstrated an ability to
  save, they will then be eligible to apply for a
  loan, based on the amounts that they have saved.
  The Credit Union is also able to offer, at higher
  rates of interest, "instant" loans, funded
  separately from their main stream of loans.
  Finally they are also able to offer members
  access to the bill paying service, whereby the
  Credit Union will pay monthly or quarterly bills
  for members, and the members will pay a fixed
  amount into their accounts on a weekly or monthly
  basis.
• Membership of the Credit Union is open to anyone
  who works or lives within this area.
• Discussions are currently taking place with a
  view of expanding in to South Solihull
• Possible establishment via the CU of school banks
• Implementation of measures to help residents of
  North Solihull reduce their dependence on
  doorstep lenders help them plan/save more
  effectively for known events such as Christmas by
  using the Credit Union.

26
Financial Inclusion Strategy

• We are currently in the process of writing a
  Financial Inclusion Strategy, which we see as
  moving on Money Advice to another level in
  tackling such issues as fuel poverty, financial
  literacy, etc
• The Financial Inclusion Strategy will be
  presented to SCH board in October 2007
• Implementation of a pre-tenancy advice package.
• Utilise finder fees from EBICo Affinity
  Arrangement for further welfare benefits take-up
  work
• Establish arrangements with a clearing bank for
  opening basic bank accounts
• Explore potential funding opportunities to expand
  the work of MAT
• Explore opportunities for joint promotion of
  welfare benefits take-up campaigns with the
  Pension Service.
• Consider targeting retirement age tenants for
  AA/HB/CTB/PCG
• Expand present fuel poverty work with Energy
  Efficiency Centre, especially with the provision
  of free low energy light bulbs.
• To work with the Grace Academy delivering some
  Financial Literacy training to 15-16 year old
  students, tying in with their Citizenship
  Training.
• .

27
And finally.Feedback from a recent service user

• The Money Advice Team has made my life worth
  living once more. No matter what I did I could
  not get on top of my situation. Also they reduced
  my feelings of guilt and shame. The whole concept
  and action of going bankrupt is daunting and
  complicated but the Team sorted out all of my
  problems and concerns, and even obtained some
  rent and council tax rebate which I had been
  refused 3 times before by Solihull Metropolitan
  Borough Council. The help that they have given
  others as well is proof of their ability and
  dedication. I just hope that there will be some
  way I can help them in return.
• I have regained my self respect