Housing Executive wrote off £10m in rent arrears
Over £10 million in rent arrears was written off by the Northern Ireland Housing Executive over a five-year period.
The high level of write-offs were made so the public housing body was able meet its corporate target of not allowing rent arrears at the end of one year to exceed those of the previous year, said a report from the Audit Office.
In the years 2002 to 2007 the Housing Executive was able to reduce its gross tenant arrears by an impressive looking £3.3 million - but only by writing off more than three times as much, £10.6m.
The report described it as "a direct and substantial loss to the public purse".
It said while the write-offs had produced a positive performance against the corporate target, the percentage of total rent collected had reduced and there were high levels of individual arrears.
Indeed the report showed individual debt in excess of £10,000 have been run up by tenants - and in one case more than £21,000.
The Housing Executive is at the bottom of the league in gathering in rents compared to English local authorities and the Audit Office said: "In our view these underlying indicators are of some concern and may become more problematic in the difficult economic climate ahead."
It added: "We consider that there is scope for NIHE to enhance its target-setting regime and further develop its approach to benchmarking as a means of driving forward performance improvements."
The report stressed the need for better measures to prevent arrears as it can take a very long time for them to be recouped, given that the maximum arrears deduction permitted is £3 a week.
Preventative measures were an important element in ensuring debts do not escalate to the stage where eviction and legal action may be necessary, said the report.
It noted that eviction for non-payment of rent in Northern Ireland was lower than in England - with an average of 34 evictions a year.
However it said there had been a sharp rise in the last financial year with 45 tenants booted out in the first nine months of the year.
- The £10.6 million write-off had enabled the NIHE to reduce gross arrears by £3.9m, 20.6% in the five years to 2007.
- Current tenant arrears have fallen by £3.5m - a drop of 23.6%.
- Former tenant arrears were down £0.36m, a reduction of 9.1%.
While the average debt of NIHE tenants overall was £158, there are a high number of high individual debts.
As of September 2008:
- Some 2,570 tenants each owed more than £1,000 - amounting in total to over £5.6m.
- Of those, 202 owed between £4,000 and £10,000 - average £5,650.
- Thirty-two tenants owed over £10,000 - average debt £13,221.
- The highest single debt was £21,191.
The report recommended the Housing Executive examined the reasons for the downturn in the percentage of rent collected in 2006-07 to determine whether it was exceptional or symptomatic of a deeper-rooted problem.
It added that in view of the high level of write-offs it should review the stage at which debts were being written off, the reasons behind the write-off and whether more decisive and targeted preventative and recovery action was needed to address specific problems.
The report said:" The Audit Office considers that there is scope for NIHE to enhance its target-setting regime and further develop its approach to benchmarking as a means of driving forward performance improvements."