Scope and Approach 

Background

 It was recommended to the Panel to review the recharge process at North Devon Homes as this would follow up/link up with their recent Voids review. The review commenced on 9th November 2023 and has been completed on 21st March 2024. 

Scope of the review was: 

1. Examine and understand the recharge process at North Devon Homes. 
2. Review communications around recharges. 
3. Make recommendations to improve the efficiency of the procedure. 

The Panel looked at: 

1. The North Devon Homes Recharge Policy. 
2. The North Devon Homes Recharge Procedure. 
3. Recharge sample letters. 
4. Recharge complaint examples. 
5. Examples of information from the sector; Livewest, Aster, Plymouth Community Homes, Cornerstone, Red Kite. 
6. Reviewed 6-month data report on recharges. 
7. Reviewed a breakdown of data from Income Manager on recharges.  

Process 

Step one: 

The Panel requested to meet with the Income Manager and Customer Care Team Leader to have a detailed insight on the process and procedures internally on managing recharges. 

Step two: 

Scrutiny requested to see some sector examples on other housing association policies and information. The Panel reviewed the following:- Livewest – website content Aster Housing – website content Cornerstone – website content Plymouth Community homes – website content Redkite – website content The panel noted that other than mentioned under rechargeable repairs there was not much information provided by other housing associations or visible to look at. 

Step Three: 

The panel received input from the Financial Controller, Business Improvement Analyst, Customer Care Team Manager and Head of Asset Management. The panel also received examples from our Specialist Support Team. The Customer and Housing Services Manager and Customer Experience Manager also attended all sessions. 

Step Four: 

The panel met to consider the Report and Recommendations, including feedback from service leads. 

Step Five: 

The Chair of Scrutiny to present the report at Customer Board Partnership for approval and comments on Wednesday 1st May 2024. 

Key Themes 

From the detailed discussions, key themes emerged: 

1. There is sometimes a lack of clarity and some conflict in the system of raising recharges. 

• Recharges are often raised by contractors following works and the customer is not notified until the Customer Care Team become involved. The lack of notice leads to dispute and some conflict. 
• The recovery rate for recharges is much higher where customers have advanced notice of the charge and agree it before the repair. 
• Discretion is used by some areas of the business either in not raising a recharge or waiving the recharge after it has been raised by the Customer Care Team. 

This leaves the Customer Care Team ‘caught in the middle’ and acting without the discretion available to other departments. 

2. Recharges for void works are often amongst the more significant recharges. There can be delay in getting these charges clarified and the prime opportunity to recover these costs is lost. Recharges issued months after a customer has left NDH are often either ignored or disputed. The ’Transfer Ready’ approach, which seeks to provide early intervention and advice to customers looking to move, should help to reduce the level of recharges associated with voids. This helps explain why the majority of total recharge debts are held by former customers and why the average debt held by former customers is much higher: 

£147,504.62 total recharge balance (excluding leaseholders) 288 accounts

Formers = £111,369.73 (119) - average £936

Current = £36,138.89 (169) - average £214

High recharge debts held by former customers will include cases of eviction and property abandonment, which tend to result in high void costs. Abandonment, eviction and bereavement combine to make up the majority of former customer recharges in the last 6 months, but ‘customer notice’ is still the largest single cause of former customer recharges: 

The graph below shows the spread of sources of current customer recharges (so excluding voids) – what issues North Devon Homes are recharging for and how many recharges are being raised in each category:

3. Our data reporting on recharges is not sufficient to give clarity to our Income Team on what is happening. This makes it difficult to direct resources efficiently, to know what is being paid by who, and what approach to recovery is effective. There is a balance to be found between principle and pragmatism in recovering recharges, as some smaller debts can cost more to recover than the amount charged. However, North Devon Homes shouldn’t be seen to routinely provide services which are the customer’s responsibility for free. Better data and reporting are required to inform the approach taken to this difficult issue – how and when to hold the line and when to use discretion. 

4. Vulnerabilities are a consideration. The majority of currently outstanding recharge debts are held by customers who:

• Have pre-existing rent arrears, and
• Have low incomes (receipt of Universal Credit and / or Housing Benefit)  

Furthermore, a significant proportion of customers with outstanding recharge debt have a known vulnerability. 

We are obliged to prioritise rent arrears over recharge debts, so will not collect a recharge until existing rent arrears are cleared. 

Not everyone who has a known vulnerability is necessarily on critically low income. Some benefits, such as Personal Independence Payments, are designed to cover the costs of tasks the recipient is unable to perform for themselves. Some recharges will fit into this description.  

There is a link here to the work of the Specialist Support team. Case studies show that tenancy support can help stabilise incomes and address debt issues over time. They will often also work with our Money Matters team. 

The panel concluded their review with the following recommendations: 

Table of key findings more detail 

Recommendation 1 

NDH should Introduce a checklist to enable discretion for the Customer Care Team on minor recharges where financial and personal vulnerabilities – or other mitigating factors - are present. Consideration: Do we have a reasonable maximum level for discretion, or is discretion of the team processing recharges applied to all recharges? Is there sufficient scrutiny of re-charges that are being raised before they are issued? 

Recommendation 2 

Where discretion is used, recharges should still be raised to help us budget and track the charges, but a new standard letter will notify the customer that on this occasion the recharge will not be pursued. Data reporting can track levels of use of discretion. 

Recommendation 3 

The Income Manager and Business Improvement Analyst should work together on Data and Reporting to enable better profiling of customers, tracking of payments and outcomes. 

Recommendation 4 

NDH should introduce a tiered level of estimated recharges for void works to speed up invoicing & enable recovery of debt / payment plans before departure of outgoing customer. Consideration: Balance between simplicity and accuracy. Do we accept erring on lower estimates to increase chance of recovery and avoid over-charging? Void recharges can be estimated and subject to possible later variation. Refunds can be given if we have overestimated but this should be rare.  We are more likely to find additional works when the property is empty, and issues are more apparent. Estimating recharges on void inspection also gives the customer opportunity & incentive to address issues in notice period to reduce final recharge. Would this require a follow-up inspection? 

Recommendation 5 

NDH should seek to reduce the number of recharges for solicitor’s letters on access through EVM, patch teamwork, support referrals and reasonable adjustments. Consideration: Visibility of access issues – can patch teams see where we have live access issues? Capacity of support teams 33 Solicitor’s letters have been issued in the last year and the trend is increasing. How successful are they? 

Recommendation 6 

The Fresh Ideas group should review scripting around recharges eg Pinnacle 

Recommendation 7 

Staff should have access to clear a customer summary (or dashboard) giving details of vulnerabilities, reasonable adjustments. Consideration: Reliant on work from IT / project team and not a quick fix. However, the same point is made in the Draft Customer Experience Strategy & Draft Vulnerability Strategy In the meantime, a pilot weekly recharges meeting to review recharges raised in the previous 7 days would allow staff to test recharges for defensibility (evidence), practicality and relevant known customer vulnerabilities. 

Recommendation 8 

The Scrutiny Panel should review the progress on and impact of these recommendations after 6 months.