Case Study: Magenta Living
Magenta Living, formerly Wirral Partnership Homes, was a stock transfer from Wirral Borough Council in 2005 and has around 12,400 properties on the Wirral, in the North West of England.
Income Officer Capacity Created: 3 (22.2% of 13.5 income team)
Arrears: from 1.55% (Sept 15) to 1.25% (Sept 16)
Missed Cases Flagged: 600 (Projected Arrears Value of £140,000)
Initially Magenta Living looked at deploying RentSense in 2012 but the project was stalled for various reasons, including investing more time in their Housing Management System (HMS). As an organisation Magenta wanted to try and reduce the number of cases the HMS was recommending which they were deleting without action. However, by 2015 according to John Roach, Head of Income, at Magenta Living:
“Any gains from the HMS investment were marginal. By early 2015 we were deleting around 70-80% of the actions being recommended by the Housing Management System.”
The initial delay in investing in RentSense and continuing with their HMS came at a time when social landlords were at a crossroads of welfare reform, with the bedroom tax and the onset of Universal Credit, and according to John:
“At that time Magenta’s arrears grew quickly and it took time for the income team get on top of the arrears and this finally made it clear that we were never going to get the advantages out of our HMS.”
This inefficiency coupled with a review into rising costs prompted Magenta to re-engage with Mobysoft again. Magenta, a trusted pilot partner of DWP, were planning ahead and seeing what the impact would be on their income team if they had 5,000 tenants on Universal Credit.
“Essentially we would have to double the team to cope with those numbers,” explained John. “We would not be able to do that. So we had to become much more efficient, and that’s when we started looking at RentSense again. We visited different organisations and put forward a business case to the board that approved the report.”
The business case focused on how the team would not cope with a couple of thousand people on Universal Credit, and how as an organisation the income function needed to gain efficiencies. Once running efficiently and effectively and if in the future they needed to recruit or bring more staff in they would be in a situation where the income team would be working efficiently.
“We wanted to overcome the fact we were deleting about 70-80% of actions and the amount of time people in the team were spending reviewing cases before they decided not to take any action. That’s why we invested in RentSense to drive efficiencies.”
The RentSense Difference
Magenta was keen that RentSense was able to flag the cases that needed attention rather than the income team wasting time to check if cases needed action.
Once RentSense was deployed there was a caseload reduction, however it was not as dramatic as expected. RentSense was indeed flagging less cases, but it was also catching over 600 cases a week that the HMS was missing, and these cases projected arrears were around £140,000.
“That was surprising,” explains John. “We were aware that some cases were being missed, but not such a volume. Sometimes cases would pop out of the woodwork, when officers looked at all their cases over £500 for example. Unfortunately, officers did not have capacity at the end of the week, when using the HMS, as they weren’t getting through their caseload, then more would slip through the net.”
RentSense however enabled the income team to get through their caseload, or most of it, each week, what’s more the team found it much easier to use and to understand why cases had been recommended for action, as according to John:
“You recognise why RentSense has flagged cases, for example it is because the tenant has fallen behind with their suspended possession order or not kept in line with agreement or whatever. But the HMS would be saying ‘send a letter three out’, so the team would have to investigate why, which would waste time especially if the officer then deleted the case.”
RentSense has helped deliver a more efficient workforce that are able to get through their weekly caseload. RentSense has helped create an officer capacity (or FTE) of three people, within their team of 13.5, that has helped the income function manage their Universal Credit caseload, which is currently around 420 and rising, whilst also driving down arrears.
John credits a change in approach to tackling tenants in arrears and RentSense in helping Magenta reduce arrears from 1.55% to 1.25% in twelve months.
“Just before RentSense we took a conscious step to take a more forceful approach to arrears. The message had to be that ‘we are ringing about your arrears, can you pay it now please’ being the start point, rather than asking for instalments or arrangements.”
There have been other positives from the investment in RentSense, as Magenta has noticed that the number of higher value arrears cases are falling.
“We think the cases RentSense is picking up is allowing us to get on top of cases earlier. So if we look at the profile of arrears cases we can see fewer and fewer higher arrears cases,” explains John.
And asked if Magenta would recommend RentSense to other landlords the response is resounding from John.
“Definitely and for a number of reasons. It is so much better at identifying cases in the first instance, and it is far easier to look at cases and take action in RentSense, the results prove that. But also it easier to manage a team who are on top of their caseload.”