Debt reduction of Former Tenant Arrears 2025
This Memorandum of Understanding (MoU) for supporting the purpose of debt reduction of former Tenant Arrears was agreed and put in place in 2025.
Applies to England
Documents
Details
This agreement is published as part of the Code of Practice for public authorities disclosing information under chapters 1, 3 and 4 (Public Service Delivery, Debt and Fraud) of part 5 of the Digital Economy Act 2017.
The purpose of this data share is to assist Richmond and Wandsworth Councils with holistic debt collection via segmentation of debt and responsible collection activity based on the debtors affordability.
Richmond and Wandsworth Borough Councils currently have a combined Councils Housing stock of 17,674 properties (23,269 including garage and store shed tenancies), with a further 5,819 private rented Temporary Accommodation properties.
The Housing Revenue Account is self-funding through the collection of tenants rents and is used for maintenance of existing councils housing stock and the financing of regeneration projects to provide sufficient affordable housing for those in need.
The current (unfiltered) debt values resulting from former tenants with a tenancy debt remaining outstanding currently amounts to £10.5 million across both councils. Richmond and Wandsworth Borough Councils have a strategic objective to improve their former tenants’ arrears collection rate, so that the outstanding arrears can go back into the Housing Revenue Account to continue to provide sufficient funding for those in need.
Due to many of the tenancy agreements having already ended through eviction, end of tenancy or absconding, debtors have little incentive to provide the councils with forwarding or alternate contact details, which proves difficult for the councils to trace and engage in the resolution of the outstanding debt.
Currently, contact at last known address and subsequent tracing services are utilised by the councils to locate and engage with the former tenant debtors, however these forms of contact or tracing are not always successful and do not provide the necessary level of detail to enable the councils to establish contact or consider appropriate debt collection solutions.
The current process for councils where the debtor is located, and engagement is established is to encourage a payment arrangement plan through the following recovery options:
- deductions from wages
- deductions from benefits
In cases where the debtor does not continue to engage or set up/continue the relevant payment arrangement, a legal referral will be made by the councils for recovery action through a County Court Judgement (CCJ), which can be an intrusive and costly action, impacting on future financial capabilities of the debtor.
Where the debtor is untraceable or unresponsive to attempts to engage or agree resolution of the debt, the case will either be written off or passed to legal for further proceedings, incurring further costs.
Access to HM Revenue and Customs (HMRC) contact, employment and income data would enable different lines of contact to be established and segmentation of debt in affordability bands, enabling the councils to consider different contact approaches and support based on intelligent data.
Where affordability of the debt is evident through an individual’s earnings, an informed contact will be made by the councils. Debtors can then be encouraged to make a payment arrangement to prevent actioning of an Attachment of Earnings order (AoE) (where appropriate information is available regarding employment status and income).
Where affordability of the debt is not evident through earnings, such as low income, councils will offer a supportive approach with applicable signposting for debt advice to help get the debtor out of debt (rather than debt out of the person).
HMRC considers that the disclosure of information to Richmond and Wandsworth Borough Councils is necessary and proportionate to support them in their functions to collect outstanding tenancy debt of former tenants.
This pilot aims to reduce the use of the more intrusive and costly methods of debt recovery, therefore reducing costs to the public purse and providing the right level of support to debtors.
There are no benefits for HMRC other than supporting Richmond and Wandsworth Councils with their aims.