Carrot fashion

Will offering a supermarket voucher to a troublemaking tenant convince them to turn down the volume on the TV and cough up their rent? It might seem unlikely but, as the trend for tenant reward schemes gathers pace, the evidence suggests it can.

The idea of rewarding tenants for good behaviour was pioneered by Tom Manion, chief executive of Manchester's Irwell Valley Housing Association. A lot of people thought he was idealistic – or just plain mad – when he came up with the Gold Service scheme, back in 1998. But they don't think that any more. Irwell Valley's costs have fallen 15%, customer satisfaction is up 15%, and it has won praise in recent reports from the Audit Commission and the Office of the Deputy Prime Minister.

On 12 September, Newham council in east London will become the first local authority to offer a reward scheme. Others, including Aberdeen and Edinburgh, are to follow suit.

Newham has long been plagued by antisocial behaviour. In the past 12 months, it has issued three antisocial behaviour orders, 16 good behaviour injunctions, four injunctions and nine possession orders attributable to antisocial behaviour. With the government pushing for greater tenant involvement and the well-publicised success of Irwell Valley's Gold Service, Newham's housing department saw an opportunity to bring tenants on board and ease the crisis – it expects its scheme to reduce antisocial behaviour and rent arrears, although it has not set specific targets.

Newham's scheme
In return for good behaviour and paying the rent on time, tenants will be offered discounts at local shops and leisure centres, plus quicker repairs and renovations for their homes. The discounts have been brokered by a company called Countdown Cards, which also acts for Irwell Valley; the council will send Countdown's cards out to eligible tenants.

"The idea came from a tenants' conference last year," says housing director Aniekan Umoren. "The main concern was antisocial behaviour. People also complained that there was a lot of focus and energy going on problem tenants but very little reward for those who pay their rent on time and have been no trouble to the council for years. This is a way of rewarding that and offering an incentive to those borderline cases who could be encouraged to change their behaviour."

Work on the project started last year when a team of tenants and officers from Newham took a trip to Irwell Valley to see Gold Service in action and get best practice tips.

Then, the talking began, says Umoren. "We set up a project group with the tenants to come up with detailed proposals for the rewards and criteria. We spoke to different departments; we worked with the repairs department on the possibility of an enhanced service according to people's tenancy history; and we took it through the various committee stages. We have to give tenants good information and be very clear with them. There is a lot of administration and data to get through. But I really think it will take off."

The project, called New Gold, begins with a six-month pilot for 1500 homes. So far, £50,000 has come out of the housing revenue account for admin; an estimated £10,000 will be spent on rewards in the first six months.

Newham's main goal is to reduce antisocial behaviour, but other housing providers are more interested in cutting rent arrears. Somerset's SHAL Housing, for example, offers £50 supermarket vouchers to tenants who have a clear rent account all year, or who have cleared their arrears by regular payments. The vouchers come from supermarket Safeway, and have already made an impact: arrears have fallen 8% in the scheme's first year. "We have seen almost a week-on-week reduction in rent arrears," says SHAL chief executive John Thomson.

Vouchers are not the only loot
Derby Homes, Kirklees Neighbourhood Housing and Family Housing Association in Manchester all run prize draws to encourage tenants to pay their rent on time. Tenants with clear rent accounts are sent entry forms in their tenant newsletters. There are no figures available to show how such draws affect rent arrears, but housing officers are enthusiastic about their benefits and also say they improve relations with tenants.

SHAL also runs a scheme that offers £200 to tenants who give four weeks' notice and leave their homes in a decent state. Thomson has misgivings about this. "The tenants who have been eligible for the reward have saved us a lot of money," he says. "But you have to ask: would they have done it anyway?" SHAL is to run this scheme for another year, despite its reservations, and monitor the results.

Recent reports from the Audit Commission (Local Authority Housing Rent Income) and ODPM (Equity Shares for Social Housing), suggested more councils and associations should set up incentive schemes to cut rent arrears and increase tenant involvement.

"It's something everyone will have to consider," says Sam Lister, policy officer at the Chartered Institute of Housing. "It's a way of giving everybody some sort of investment in their property." Tenant reward schemes are seen as a possible alternative to equity shares, which are complicated and expensive to run (HT 21 March, page 11).

If housing providers want to offer their tenants carrots, says Irwell Valley's Tom Manion, there is only one way to go about it. "You have to listen to the tenants," he says. "Ask them the right questions, not the professional questions. Ask them if they think people should get the same service, irrespective of how they behave. And then listen to what they say."