Kirklees Council hires debt team amid fears rent arrears could rocket

A TEAM of debt recovery officers will be recruited amid concerns that Kirklees Council could be left millions of pounds out of pocket by housing benefit changes.

A TEAM of debt recovery officers will be recruited amid concerns that Kirklees Council could be left millions of pounds out of pocket by housing benefit changes.

Kirklees Neighbourhood Housing (KNH) fears the number of council tenants who struggle to pay their rent could double as changes to the welfare system, due to take effect next April, reduce housing benefit payments to many recipients.

Previously £48m of the £76m council housing bill was paid directly to the council but under the new Universal Credit (UC) system, tenants will be responsible for paying their rent.

Kirklees Council officers have forecast the changes could leave them £1.3m out-of-pocket each year.

Yesterday, Kirklees Council’s Cabinet heard that the welfare reform may result in up to 12,000 tenants falling behind on their payments – up from the current level of 6,000.

Officers fear tenants will be unable to manage their budgets and could then fall prey to loan sharks and short term money lending companies.

Now a fund of £451,000 has been approved to tackle the predicted crisis through the recruitment of 16 new KNH posts.

KNH has already spent £220,000 of its own reserves on the project but has asked the council for the cash to hire eight new permanent workers and eight temporary ones.

The permanent roles include six housing workers and two debt advisors.

But with rent arrears predicted to rocket, KNH is set to recruit seven temporary debt recovery officers to try to claw back some of the missing cash over the next three years.

A housing advice officer will also be taken on to try and move people into smaller accommodation.

Clr Peter McBride, said: “Two thirds of tenants are benefit claimants so the threat to rent payments is significant.

“If 6,000 more tenants get in arrears it could run into millions.

“To protect the housing revenue account we propose employment of these advisors.

“There’s no doubt people will be prey to loan sharks so this in the interest of all tenants.

“I think it’s a sensible measure both as a social issue and a strategic issue for the council.”

Clr David Sheard, added: “These changes will put a lot of pressure on families, landlords and charities who are trying to help people out”.

 

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