Agenda item

Crawley Homes Rent Overcharge

To consider report DCE/11 of the Deputy Chief Executive.


The Commission considered report DCE/11 of the Deputy Chief Executive. The report considered the reasons behind the rental overcharge, the actions being taken to rectify this and the associated financial impact; and requested that Full Council approved the necessary financial changes.


During the discussion with the Cabinet Member for Housing, Chief Executive and Head of Corporate Finance, Councillors made the following comments:

·         Acknowledgement that the report documented a historical error with regards to tenants’ rents, reasons and rectification.

·         Important that the council was seen to be doing the ‘right thing’ in repaying tenants and to ensure consistency with natural justice and transparency.

·         Recognition that the analysis process was significant and complex along with the process for rectification for the teams involved, not just for the council but external organisations.

·         By rightly applying the principles of natural justice there was a return of the money that has been overcharged, placing the financial impact at ‘status quo’, but it was noted that there was a financial impact in terms of resource analysis of the data and that required to rectify the issue which should be made open and transparent. It was subsequently confirmed that costs were borne out of existing hours.

·         Acknowledgement that the implementation of the policy seemed simple (48 to 52 weeks) compared to the cost of the resolution which appeared overly complicated.  It was important to learn how to avoid similar situations in the future as it was noted the Regulator for Social Housing contacted the council following its first mandatory data return.

·         Acknowledgement that the change was made by dividing the existing rent by 52 and then multiplying by 48.  Actual rents were changed but the target rents on the system were not. Confirmation that the information was now fed into the housing system. 

·         It was queried whether the rent charging may not have been consistent with the decision taken in October 2013.  However that decision reflected the 52 week charge for actual rent and it was noted the targeted rent was set by central government. 

·         Recognition that the Council actively monitored actual rents received versus the level forecast and regularly checked and sought reasons for variances. The year that the decision was made the council had 101 RTB properties. The Council budgeted for a similar level the following year (the first year of the new 52 week rent), however sold 66. When completing the budget monitoring the rental income was higher than anticipated but at the time this was put that down to having more properties paying rent than anticipated.

·         Confirmation that the costs would come from the HRA once the process was complete. The budget would be adjusted next year and be reflected in the quarter 3 budget monitoring report.

·         It was noted that existing tenancies would not affected by this change, and neither were new tenancies within properties built since April 2014. Reconciliation had taken place for the current rent to ensure they were correct.

·         Confirmation that rent credit would be transferred into rent accounts and also that the Corporate Debt Team would be liaising with tenants for any outstanding debt.

·         It was noted that communications for tenants would continue over the next few weeks and Housing Advisors would be available to assist with any queries and support.  Correspondence will be issued for former tenants but the priority was to the current tenants.

·         It was felt it would be important for the Cabinet to acknowledge openly, ways to build some degree of public confidence in the council’s ability to minimise this similar error in the future.



That the Commission noted the report and requested that the views expressed during the debate, were fed back to the Cabinet through the Commission’s Comment sheet.



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