Increase in collection rate
Improved debt position over 4 months
Luton Borough Council has been using our Collections solution in a truly innovative way since 2022, by using it to collect former tenant arrears (FTA) within temporary accommodation. Luton initially started reviewing and reconciling the FTA debt at the beginning of 2020, across over 9,000 temporary accommodation accounts. The debt kept mounting and there was no resource or strategy in place to stop it. Something had to be done to tackle it.
Read on to see how Luton Borough Council stopped this debt rising by up to £1 million pounds each year with Voicescape Collections…
For FTA on temporary accommodation, the challenges began for Luton where balances on accounts didn’t always reflect a true debt that could be pursued, mainly due to affordability reasons. There are legislative provisions that allow individuals to challenge the affordability of their rent, leading to complexities in reconciling accounts. Consequently, the team found themselves stuck, unable to make significant progress in debt recovery, with the total debt in this area amounting to £10m and rising by £1m each year. The team were trying their best to reconcile these accounts, however, after a year of working on them, only reconciled 3,440 accounts. It is at this point they realised “we aren’t going to be able to get through all of these accounts quick enough”.
An additional challenge stems from the culture surrounding former tenant debt, particularly where tenants leaving temporary accommodation typically expect minimal responsibility for unpaid rent. This idea was fuelled by the historically infrequent chasing of such debts by landlords. When pursued with no prior warning, tenants were caught off guard, making debt collection a particularly challenging conversation. Furthermore, this assumes that the quality of contact information is good enough to get through in the first place.
Moreover, Luton Borough Council has on average 460 homeless households approaching them each month for temporary accommodation, including overflow from central London. The tenure lengths for temporary accommodation span from one to ten years, particularly impacting larger families deeply integrated into the community. The council, therefore, faces an ongoing struggle to address the escalating homelessness levels. To accommodate homeless families, the council has resorted to renting private flats and B&B rooms, inadvertently contributing to the escalating rent prices in Luton, further exacerbating the financial strain on the council.
To initiate the process, a substantial write-off was approved for accounts deemed uncollectable following an analysis on their propensity to pay. Voicescape Collections was then brought in to automate the vast amount of phone calls that were needed to engage the remaining accounts. The FTA income team then deployed Voicescape Collections, making on average 1,500 points of engagement each week. The controlled inflow of phone calls to the team is a direct result of these ‘nudges’ or reminders sent by Voicescape calls prompting individuals to address their outstanding payments. This often leads to productive conversations, either with people making immediate payments, or discussing their debts. Alternatively, if people don’t respond at that time, they choose to do so at a time of their convenience or opt to self-serve through an alternative payment route.
The results of implementing Voicescape Collections were immediate and significant. Over a four-month period, their former debt position improved by £303,000 against previous years. This performance is also driven by a team which sees an improved officer experience, leveraging the power of Collections in the day-to-day work. Voicescape not only transformed debt management but also instigated a cultural shift, increasing engagement touchpoints between the organisation and tenants. The impact was substantial, allowing the team to efficiently handle two years' worth of calls in a two-week cycle!
"Voicescape Collections transformed our FTA debt recovery for temporary accommodation at Luton Borough Council. Faced with a trend of £1 million annual increase and no clear way to stop this, the automated system led to an immediate and substantial impact, limiting the rise to just £30,000 over four months. It is a vital tool for us to tap into this hard-to-reach debt.”
David Allen, Housing Manager at Luton Borough Council
The system played a pivotal role in achieving financial targets, with one Full-Time Equivalent (FTE) bringing in £10,318.38 in the last full month of reporting, facilitated by the team's skills and understanding of the system. Since the introduction of Voicescape Collections, the generated revenue has amounted to £304,752, averaging £23,442 per month. Importantly, this revenue is in excess of the £500,000 bad debt provision budgeted for FTA in temporary accommodation each year. It is entirely new money that can be redirected into the organisation’s other projects. Additionally, the team’s productivity in terms of quality engagement has soared, facilitated by the technology taking on the bulk of the lower end manual tasks.
"The stunted debt recovery efforts within the temporary accommodation team at Luton Borough Council was transformed by Voicescape Collections. This streamlined approach not only helped us meet financial targets but also fostered a positive satisfaction shift within our team, enhancing engagement with former tenants, and allowing talented staff to do their job more effectively."Shams Ogunmuyiwa, TA Arrears Manager at Luton Borough Council
Already Luton Borough Council have been revolutionising the way that Voicescape Collections can be used. However, the team is always looking at new ways to use the solution, such as identifying missed or incorrect data, which over time can be used to improve the quality of the data the organisation holds – this wouldn’t be possible without Collections.