Perth and Kinross Council Housing Department

At length corruption, like a general flood (So long by watchful ministers withstood), Shall deluge all; and avarice, creeping on, Spread like a low-born mist, and blot the sun. Author: Alexander Pope

Housing failings causing ‘black hole’ in budget

A COURIER investigation today reveals how basic failures within Perth and Kinross Council have resulted in local tax payers filling a budget “black hole.”

Residents have been picking up the tab for housing dozens of homeless people in Perth hostels—even though the authority should be claiming the cash back.

A senior source within the council has blamed incompetence and managerial failure to follow simple procedures for the shocking situation. The whistle-blower claims tax payers have shelled out up to £1 million to effectively bail the council out.

The Courier can also reveal morale levels in the housing department have reached a “dangerous low” as the situation threatens to spiral out of control. However, some staff members are too terrified to speak out against senior management for the fear of reprisals.

Yesterday, after days of questioning by The Courier, the local authority finally admitted well over £100,000 had “not been collected,” although the whistle-blower alleged that sum could be up to 10 times higher.

“If it was any other business, heads would roll and at the end of the day heads should roll,” the insider said. “Sheer incompetence has resulted in a budget black hole of perhaps £1 million opening up—but nothing is being done to tackle it.”

When a homeless person presents him or herself at the local authority the council has a statutory requirement to act. The individual is put up in a hostel or other accommodation and costs can then be claimed back from central government. “It is not cheap to house a homeless person,” the source said. They added, “However, central government should meet the costs—and indeed it does as long as regular returns are made by the authority. “That is where the problem lies. Homeless people in Perth and Kinross have been given tenancies but no rent or revenue accounts have been opened for them. “As such the cash cannot be claimed back and so council tax payers have had to meet the costs,” the insider added. “This has happened in dozens of cases and yet the creation of a rent account is a simple process which takes only two or three minutes.”

Failures within the system have also allowed individuals not on state benefits to escape paying for their crisis accommodation—again leaving local tax payers to pick up the tab. “The whole system of claiming cash back from central government involves homeless people on benefits,” the insider said. “However—and equally incredibly—there have also been failures to chase up individuals who are provided with homeless accommodation but are not on benefits.

“Hundreds of thousands (of pounds) of rent arrears have accrued in this way and yet no action has been taken.” The source placed the blame squarely at the feet of senior management in “ivory towers.” “These problems have been raised by staff on numerous occasions and yet there does not seem to be the will to sort it out. “It has been building up…but seemingly untouchable senior figures in ivory towers do not have the ability to take it forward. “In my opinion those in charge have been inept and a lot of very good and competent staff are extremely upset about it. However, they are too terrified to speak out for fear of reprisals. “Morale at the moment is dangerously low and action must be taken.”

During questioning by The Courier the council made a number of statements: On October 28 it told us it was “extremely concerned” at any suggestion of a “significant deficit.” On November 2 it conceded that 56 tenancies had been created at local hostels for which a rent account had not been generated. It said this resulted in £26,794 of rent still being outstanding and blamed difficulties in operating a new computer system for the problem

Yesterday a spokeswoman admitted that outstanding rent so far this financial year stands at £86,498. She further confessed £83,097 remains outstanding from 2004/05. The council declined to reveal figures for any previous years. “The council actively pursues rent arrears on an ongoing basis with the aim of reclaiming as much money as possible either through processing housing benefits or pursuing the arrears,” she added. However, the whistle-blower said, “I believe the figures involved are much, much higher than this.” In September a letter signed by housing staff across the area outlined serious concerns with senior management. A copy was sent to UNISON and the council. A copy was also leaked to The Courier. It said huge numbers of housing department employees were suffering from low morale and ill health. It seemed to suggest industrial action could be on the cards and revealed that staff were variously suffering from insomnia, irritability, headaches and work-related stress. They claimed senior staff were doing nothing despite being made aware of the concerns. © All copyright D C Thomson & Co Ltd., 2005