8. Rent arrearsThe impact of the range of changes above, reducing welfare benefits and changing the way inwhich they are paid, together with other general factors relating to the economy and wages,has increased the risk of rent not being collected.Rent arrears as at 31st March 2018 were £921k, compared to 31st March 2017 at £739k and31st March 2016 at £511k. This is an increase of £410k (80%) in the 2 years since UC wasintroduced. The table below shows a 12 month rolling average for rent arrears over a 23month period and the trend is clearly upwards, though with a reducing average growth inlater months (confirming the improved management of rent arrears). With the extension ofthe ‘Full Service’ UC to the rest of the district and the migration of existing claimants by2023, it is expected that in the pressure on arrears will continue for a period until newclaimants adjust to the very different system of benefit payment.12 Monthrolling averageThis table includes pre-payment of rent as well as rent arrears resulting in a lower debt level.A range of mitigating measures have beentaken to ensure that the rise in arrears ismanaged and reduced over time, andadditional provision made for bad debtrepayment to take account of this issue.A range of actions have been taken thatappear to be having an impact:•Improved tenancy sign-ups witha comprehensive council serviceoffered, including a UniversalCredit claim process;•Appointment of a FinancialInclusion Officer;•ICT system improvements andnew analytics to be introducedto bring ‘smarter’ debt recoveryprocesses.24 East Suffolk HRA Business Plan 2018 - 20489. Increased Bad DebtProvisionThe bad debt provision at the end of2017/18 was calculated using actual rentarrear statistics as well as outstandingdebtor payments as at 31st March 2018.The provision for bad debt was budgetedat 4.4% (£902k) of budgeted income in2018. However, the outturn position as at31st March 2018 was 3.34% (£690k).10. Debt Repayment ReserveAs at 31st March 2018 the debt repaymentreserve balance of the HRA increased to£9m. We increased the transfer to the debtrepayment reserve in 2017/18 to reducethe HRA working balance from 34.58% oftotal income to 23.87% as at 31st March2018. This gave the HRA the ability toreduce future year transfers to the debt
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