The weight of managing arrears during the COVID-19 crisis
Today Laurinda Hornblow, head of income management at Sovereign, blogs on income management during current crisis. This links in with the CIH best practice notes on supporting tenants with arrears and COVID-19.
You’ll probably have seen in the news that more than a million people have applied for Universal Credit in the past few weeks.
According to the Department of Work and Pensions, 950,000 successful applications were made between 16 March, when people were advised to work from home, and the end of the month.
We’ve experienced a similar spike in enquiries at Sovereign, seeing more than 600 confirmed new UC claims coming through from 16 to 31 March – which is almost double the number we would usually expect to see in a month.
Prior to the coronavirus outbreak we were already working closely with the DWP on the planned ‘Move to UC’ managed migration of Universal Credit to customers across our geography.
We’d trained all of our income teams - more than 80 people - and felt prepared for the incoming changes. We’d established protocols already, where we used data to look ahead. When we knew that a geographical area was switching to UC, we could call ahead to those customers, preparing them for the changes to their benefits.
In that regard, nothing has changed. But now, instead of handling around a few queries a day about Universal Credit, the number of calls our Tenancy Support Advisors took reached more than 500 in the first week following the Covid-19 lockdown, and has continued to escalate since.
Coronavirus has sent the world into economic meltdown. Overnight, some set-ups have switched from being a two-person working household, to both being at home, either due to being furloughed, laid off, or having to take on childcare responsibilities, following school closures.
Our responsibility, during this time, is to stay calm and use our expertise to guide and reassure our customers.
Our team set-up
Even before government guidance on evictions was announced, Sovereign decided that no one would lose their home due to Covid-19.
Our income officers quickly got on board with a new way of working – not only physically – as they were set up to work from home – but mentally. Just two days after lockdown began, we changed their role to be able to support our customers further, drawing on the expertise of our Tenancy Support Advisors (TSAs). A raft of tools, standard texts and emails and benefit call guides helped them to navigate the advice world at a time where the benefit legislation seemed to be changing daily.
We also backed up those on the phones by making sure that we kept our messaging for customers consistent and clear, using our website, social media channels and even our contact centre welcome message to keep the channels of communication flowing cleanly. An internal Workplace Group allows discussion between the income teams, the TSAs and employment and training officers and provides regular updates from the gov.uk website on all the benefit changes, but also decisions being made about the service as we responded to customer feedback.
We removed formal referral routes to the TSAs and the Employment and Training Service making it easier for customers to get advice. We’ve also extended our hours of contact so customers can call us from 8am to 6pm every day. Changing the ‘wrap up’ codes used at the end of calls ensures that we’re tracking all of the data relating to financial enquiries as accurately as we can, for future analysis.
Proactive use of data
As well as answering reactive calls about income and rent, a key part of our approach is being proactive in our support for our residents, calling them to check in, before they’ve even thought of coming to us. Using a system called ‘RentSense’ we’re able to look at patterns of payment – and predict where there may be a change. For example, it can spot situations where rent’s previously been paid regularly but now nothing has been received. We use this as a trigger to call our customer to find out what their situation is, offering help and advice if they want it. We’re also using our data on cancelled and rejected direct debits to proactively call customers to understand their situation.
When calling we find out how they are coping, and suggest levels of payment dependent on what they feel they can manage. We’re encouraging them to talk to us, as we understand that people need to prioritise paying for food or for electricity, but we don’t want them to get caught out.
We’re also explaining that although they may be struggling to pay just now, they will need to make a claim for Universal Credit, sick pay or ESA – and that we can help them do that.
We’re using the model we’d previously developed for the UC roll out. But instead of calling people up to see if they are ready for the UC changeover, instead we’re using the UC verifications to call customers and check that they understand the UC journey. We can also explain that, although there is still a five week wait for their money, they can apply for an advance. This could be as much as £1,000 or more, though they do need to be mindful that they will then have to pay that back.
Payment plans – the art of flexibility
In terms of reactive calls, broadly, they fall into three categories:
● Someone who can and wants to pay their rent, but can’t physically get out to do so – i.e. they usually pay weekly at the Post Office or similar
● People who are already on UC or are a low income household – but are struggling to make ends meet and want to know if they can take a payment break or reduction and how this works
● People who were previously able to pay, as they were in employment, but now need to make a new claim for Universal Credit, Employment Support Allowance or statutory Sick Pay
The support we can offer
We have 11,000 customers of state pension age, with the majority of those customers now being advised to shield themselves from coronavirus by staying home. Of those, 3,000 normally choose to pay us at the Post Office and now can’t do so. In theory, though, they should be able to carry on paying, as their income is unaffected. They may have previously resisted switching to Direct Debit or online or over the phone payments, because, for them, their trip into town to make payments was part of a social interaction, getting out and seeing people. With these customers, some are opting to ‘put aside’ the money to pay us at a later date, where others are paying over the phone, or if they are online using our portal or doing a bank transfer.
With our 16,000 customers who already receive housing benefit, and the further thousand who are set up for us to receive their UC payment direct, many may be able to continue paying, though they may be paying less than usual. Again, if they let us know, we can be flexible.
Finally, our tenancy support advisors are able to talk customers through how to make changes to their UC online journey if they already have one, or support them in how to make a new application if they don’t.
A moment on the lips…
Anyone who’s ever been on diet will know the expression ‘a moment on the lips, means a lifetime on the hips’ – basically it’s a lot harder to lose weight than it is to put it on in the first place.
The same is true of arrears. We know that most of our residents wouldn’t choose to be where they are in terms of non-payment of rent, but at some point, whatever arrears have been added on, will have to be repaid. If they work with us, engage with us, we really can be flexible.
We are already forecasting for the next three months, six months and nine months, as clearly, coronavirus will have a massive impact on the work that we as a business can afford to do in the future.
Whether that’s catching up on the repairs, maintenance, or planned works to improve people’s homes that have not been completed over the last couple of months, or its working with government to get building again, we will need to see money coming in to achieve these aims.
However, I am confident that if we continue to keep talking and working with each other, then we will be financially fit and healthy for the future.
You can read CIH’s briefing notes on our website.