Mid Devon District Council has been charging thousands of social housing tenants the wrong rents for over twenty years in what a government regulator has judged are “serious failings” that have resulted in dozens of evictions.
A judgement by the Regulator of Social Housing found that Mid Devon District Council had incorrectly applied the Rent Standard, a national formula for setting social housing rents, resulting in 1,243 of its tenants being overcharged and 1,622 undercharged.
The council referred itself to the regulator last September after an external auditor raised concerns about how its rental charges were being calculated.
The regulator found that Mid Devon District Council had incorrectly calculated property valuation data to use as the basis of its 2002 rent calculations and did not rectify the mistake until the error was highlighted by auditor Bishop Fleming last year during its first audit of the council’s finances.
Mid Devon District Council headquarters in Tiverton.
Photo: Martin Bodman under Creative Commons licence.
Mid Devon District Council estimates that it has overcharged some tenants a total of £7.5 million since 2002 while undercharging others £8 million at the same time.
The local authority, which is responsible for nearly 3,000 social housing homes, sought external legal support once the errors were found.
It says that, following legal advice, it plans to refund rent overpayments made over the past six years to overcharged tenants. It estimates that this could cost around £1.8 million.
The council has also confirmed that the rents it is now charging these tenants have been corrected and that undercharged rental rates would only be corrected upon tenancy changes.
In a report to its March audit committee, the council said it had identified 70 instances in which its tenants had been evicted where “rent arrears were the sole, or contributory factor” and that these would be reviewed once “current cases and repayments have been resolved”.
The report adds that officer resources have been dedicated to error correction, with some staff redeployed to assist.
