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The Council loan scheme where almost no money has been repaid

A Liberal Democrat Councillor slammed Luton Council this week for operating a loan scheme to help people find housing so incompetently that almost no money has been repaid.

Luton’s Rent Deposit scheme is designed to help residents who are either homeless or at risk of becoming homeless by lending them a deposit. This money is then repaid, wherever possible, to go towards helping others in a similar situation.

However, a recent Internal Audit Report has found that:

  • Of £114,000 lent out to tenants in 2010/11, only £3,600 had been recovered
  • NO Debt Recovery Procedures of ANY kind were in operation up to the end of 2011
  • The Council is only getting money back when tenants are actively offering to pay

Liberal Democrat Deputy Group Leader, Martin Pantling says:

“ We support the aims of the Rent Deposit scheme. It helps people who might not have a deposit at the time to secure housing, and saves the Council money in the long run.

“ But operating it like this makes Luton look like a Basket case. In one breath Labour say resources are scarce, with the next they are handing out cash hand over fist without asking for it back. Who else would agree loans then not bother to chase any repayments?”

“ Failing to get so much money back also means the pot available to help others is much smaller, and this could make the whole scheme unviable. Labour need to explain just what exactly they thought they were doing, and how they now intend to rescue this scheme.”

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