The Cost of Tenancy Failure 2011

Introduction
This briefing is an update of an original piece of research by the Scottish Council for Single Homeless (SCSH) on the cost of tenancy failure which was carried out in 20071. The previous work showed: Local Authorities bear large direct costs as a result of tenancy failure. The large cost of tenancy failure provides an independent economic rationale for investing in tenancy support. Additionally, homeless prevention measures and support help reduce rates of tenancy failure and that any reduction in support provision would entail an increase of costs for the local authority. The overall conclusion from this research was that investing in homeless prevention makes sense in order to reduce overall costs.

How the Research Was Carried Out

Two local authorities2 were sent costing sheets and given two 'typical' tenancy failure scenarios to work costings - the same scenarios were used in the original research. These scenarios have been left deliberately without detail in order that they can more easily be applied in most regions, however they supply sufficient comparable costs to be robust. In each case it is assumed the person in the scenario is unintentionally homeless and in priority need. Where the scenario did not fit exactly with the local authorities' perception of a typical case, for example the exact duration spent in temporary accommodation, these were calculated on an 'as if' basis.

http://www.scsh.co.uk/information/briefings/07%20Tenancy%20Failure%20Briefing.pdf In the original research, three local authorities were approached.

SCSH, Suite B, Stanhope House, 12 Stanhope Place, Edinburgh EH12 5HH Telephone 0131 337 8243 Email admin@scsh.org.uk www.scsh.org.uk SCSH is a charity registered in Scotland SC002734 and a company limited by guarantee SC77026

The Cost of Tenancy Failure 2011

Scenario 1: Frederick 12 months in temporary accommodation

Frederick is a single young man, aged 24. He has a history of rent arrears and was in his tenancy four years prior to failure due to rent arrears of four weeks. He moved into emergency hostel accommodation for four weeks and has now been in temporary accommodation for 48 weeks with support in place. His possessions were stored by the local authority for 52 weeks.
Cost LA1 Tenancy Breakdown Costs Lost rent / arrears Re-letting / repairs Possession order etc. Detailed breakdown (where available) LA1 LA2

LA2

396.40 1,583.51 191.36

256 5,350 499

4 weeks 2 apt rent 198.20 plus rent arrears 198.20 Average void re-let cost Service of Summons 28.85. Service & Action of Eviction Notice 96.05. Warranting Case at Court 66.46 (incl. recorded post) 36 hours x housing advisor @ 11.17/hr 3 hrs x supervisor @ 17.85/hr 2 hrs x manager @ 20.50 per hr

4x 64 5,100 Re-let repairs- dec grant 250 Court expenses 356 Service of charge 43 Eviction fee 100

Landlords admin

496.67

2,172.92

1023.12 Housing Management Officer 3 hrs/wk, 521.76 Day care Officer( 48 hours total), 130.44 Outreach 373.20 Accommodation Officer (30 hours), 124.40 housing needs assessor (10 hours) Uplift cost and storage cost per week uplift 200 & 110/wk [for full container]

Storage Fee Sub-total Accommodation Hostel Accommodation Temporary Accommodation Total excluding support Support Support during emergency stay Support during temporary accommodation stay Total including support

3,580.00 6,247.94

5,720 13,997.92 6,478.16*

460 Uplift cost, 60 storage cost p/wk

124.58 per week 267.40 p/wk x 4 wks 269.50 p/wk x 48 wks

1,069.60 12,936.00 20,253.54 390.80 2,424.90 20,476.08 4,320

5 hrs per week x 18 19.54 per hr - 5 hours per wk = 97.70 x 4 wks 18.73 per hr 3 hrs per wk x 26 wks (plus) 2 hrs per x 26 wks

23,069.24

24,796.08

*LA2 has no hostel accommodation so accommodation costs in both scenarios are calculated for the cost of accommodation.
SCSH, Suite B, Stanhope House, 12 Stanhope Place, Edinburgh EH12 5HH Telephone 0131 337 8243 Email admin@scsh.org.uk www.scsh.org.uk SCSH is a charity registered in Scotland SC002734 and a company limited by guarantee SC77026

The Cost of Tenancy Failure 2011

Scenario 2: Lesley six months in temporary accommodation

Lesley was evicted six months ago for rent arrears. For the last ten years she has failed to pay the rent consistently, which resulted in her eviction. Currently the rent arrears balance is 4000. She has been staying in local authority temporary accommodation for six months with support in place. Her possessions have been stored by the local authority for six months.
Cost LA1 Tenancy Breakdown Costs Lost rent / arrears* Re-letting / repairs Possession order etc. 216.28 1,583.31 191.36 Detailed breakdown (where available) LA1 LA2 4 weeks - 4 apt. rent 216.28 plus rent arrears 4000.00 Average void re-let cost Service of Summons 28.85. Service & Action of Eviction Notice 96.05. Warranting Case at Court 66.46 (incl. recorded post) 41 hours housing advisor @ 11.17/hr 4 hrs x supervisor @ 17.85/hr, 2 hrs x manager @ 20.50/ hr 4x 64 5,100 re-let repairs- dec grant 250 Court expenses 356 Service of summons charge 43 Eviction fee 100

LA2 256 5,350 499

Landlords admin

570.37

4,704.80

1023.12 Housing Management Officer 3hrs/wk 521.76 Day Care Officer (48 hours total), 130.44 Outreach, 373.20 Accommodation Officer (30 hours), 124.40 Housing needs assessor (10 hours), Uplift cost and storage cost per week uplift 200 & 110/wk [for full container] 124.58 per week

Storage Fee Sub-total Accommodation Hostel Accommodation Temporary Accommodation Total excluding support Support Support during emergency stay Support during temporary accommodation stay Total including support

3,340.00 5,901.32

2860 13,669.80 3,239.08

540 Uplift cost 100 storage cost p/wk

7,007.00 12,908.32 390.80 2,191.54

267.40 p/wk 269.50 p/wk x 26 wks 16,908.88 2,160 19.54 per hr - 5 hours per wk 18.73 per hr 3 hrs/ wk x 26 wks (plus) 1.5 hrs per wk @ 28.10 x 26 wks 19,068.88 5 hours weekly @ 18 for 6 months

15,490.66

*Not including the 4,000 lost in rent arrears.

SCSH, Suite B, Stanhope House, 12 Stanhope Place, Edinburgh EH12 5HH Telephone 0131 337 8243 Email admin@scsh.org.uk www.scsh.org.uk SCSH is a charity registered in Scotland SC002734 and a company limited by guarantee SC77026

The Cost of Tenancy Failure 2011

Conclusions

In simplest terms, it is unsurprising to find that the costs of tenancy failure have increased since 2007. What is perhaps more interesting to observe is that the costs of emergency and temporary accommodation make up an increasingly larger proportion of the overall costs than support - between 10% and 20% percent of overall costs is comprised of support (the 2007 proportion spend on support was between 12% and 29% of total costs). The difference in costs between the original research and this updated research is also in part as a result of the rise in cost of temporary accommodation and storage costs. This cost would likely further increase if there were to be a rise in tenancy failure rates due to increasing demand. In summary: Tenancy failure places large direct costs on Local Authorities. Costs related to tenancy failure have increased in the last four years. Support has previously been shown to reduce tenancy failure. The cost to support those in their tenancies is less than bearing the costs for each failed tenancy.

SCSH, Suite B, Stanhope House, 12 Stanhope Place, Edinburgh EH12 5HH Telephone 0131 337 8243 Email admin@scsh.org.uk www.scsh.org.uk SCSH is a charity registered in Scotland SC002734 and a company limited by guarantee SC77026