Tenants dodge £400k rent as housing deal under fire
DEMANDS have been made for tighter controls on a housing contract after taxpayers were landed with a £400,000 bill from uncollected rent.
Private letting firm Orchard and Shipman fell behind on rent collection on an outsourced contract with the city council, and at one stage nearly 700 of 1600 tenants were not paying.
Councillors have now demanded closer checks are carried out on the system, while admitting that reclaiming the money would be “virtually impossible”.
The firm – which has since lost the contract – was not liable for the loss but there is expected to be far greater scrutiny on the new system, being run by the Link Group.
The extent of the loss only became clear when the five-year contract came up for renewal.
Housing chiefs were struggling to find accommodation for homeless families in 2005 and struck the deal with Orchard and Shipman because it immediately released 1600 homes on to the market.
The scheme offers long-term contracts to private landlords whose properties are then let by the council to those in “crisis”.
However, many of those housed were in and out of employment and the lettings firm struggled to collect rent from 40 per cent of residents.
Officials have spent the past year attempting to claw back some of the losses, but just £17,200 of £415,400 has been recovered.
City councillors agreed to write off the debts, although officers from a special non-payment team will continue to track down debtors.
Cathy King, head of housing at the local authority, told the finance committee: “The sum became apparent at the cessation of the contract. Orchard and Shipman were not liable and were to transfer information [on tenants to be chased up for rent] which they did for some.
John Taylor, chief executive of the Orchard and Shipman Group, said: “We would refute any suggestion we weren’t effectively collecting rent. We were also audited by the council and we were found to have in fact exceeded our targets for rent collection.”
Mr Taylor highlighted the fact that, under the agreed contract, his firm was liable for collecting rent from tenants who had left the system and the city council was responsible for collecting the £400,000 owed by existing tenants.
Housing leader, Councillor Cammy Day, said: “It makes good financial sense that the council’s budget does not include income which may not be recovered. The vast majority of tenants understand the importance of paying their rent.
“We will continue to work with people who owe these debts to the council to ensure everything is done to ensure these are paid. These arrears represent less than one per cent of the rent due.”
Search for a job
Search for a car
Search for a house
Weather for Edinburgh
Friday 24 May 2013
Temperature: 3 C to 12 C
Wind Speed: 18 mph
Wind direction: North east
Temperature: 7 C to 17 C
Wind Speed: 13 mph
Wind direction: West