‘Serious failings’ led to rent error that saw thousands of Cambridge council tenants overcharged

“Serious failings” led to the council tenants in Cambridge being overcharged for rent, the Regulator of Social Housing (RSH) has said. Cambridge City Council announced earlier this year that it had identified errors in how it had set its rent and service charges, with some errors going back 20 years.

The authority referred itself to the regulator after it identified the mistakes. RSH has now said “significant improvement” is needed at the city council. Two historic errors were identified by the city council in how it had set its rent and service charges. The first error related to a failure to apply a one-per cent reduction required for around 300 affordable rented properties between 2016/17 and 2019/20.

The second error related to a policy put in place in 2004 that de-pooled service charges for gas and lift maintenance erroneously from rents, which the regulator said resulted in a “significant number of tenants” being overcharged in subsequent years. The city council has apologised for the mistakes and is working on refunding those who were overcharged. It is estimated that the city council will need to refund £1million to people impacted by the first error, and around £3.2million to people impacted by the second error.

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The regulator published its decision today (July 9) after looking at what took place at the authority. It said: “There have been serious failings in how [the city council] has delivered the outcomes of the Rent Standard and we do not have assurance that the council was previously compliant with the Welfare Reform and Work Act 2016. [The city council] has overcharged about half of its tenants as a result of errors that it has made in setting rents over a prolonged period.”

The RSH added that the city council had been “transparent” and was “engaging constructively” with the regulator, recognising the steps taken so far to address the issue, including rectifying the rent levels and contacting affected tenants. The regulator said it will continue to have “intensive” engagement with the city council to seek evidence and assurance that “sufficient change and improvement is being made”.

Kate Dodsworth, chief of regulatory engagement at RSH, said: “Landlords must provide safe and decent homes for tenants, have an effective complaints process, and put things right when there are problems. The judgements we published today show that each of these landlords have issues which they need to address promptly."

The city council said it is currently working out how much tenants are owed, but said it may still be “some months yet” before it starts to make refunds. Councillor Geri Bird, executive councillor for housing, said: “Our intention has always been to make what tenants pay transparent and to set rents as low as possible.

“When we created the Affordable Rents policy, we could have set rents higher than we did without breaching government guidance, but because of misinterpreting the guidance we have unfortunately overcharged some tenants. We are really sorry and we’re working to put this right as soon as we can. We really appreciate tenants’ patience with us while we work through this.

“I’ve seen some reports that tenants could receive thousands-of-pounds, and while a small number may receive refunds of that amount, the majority won’t. The most common error relates to service charges, which are approximately £2 per week, so any refund owed as a result of this error would only be in the thousands if a tenancy had been in place for 20-plus years.”