GPSJ - SPRING 2025 - Flipbook - Page 32
GPSJ
LOCAL AUTHORITY & COUNCIL
Flexible payments: why the public sector must
step up for financially vulnerable communities
By Wayne Campbell, Head of Presales, Access PaySuite.
As in昀氀ation, interest rates and
the cost of living continue
to test the resilience of UK
households, the public sector
faces a dual imperative:
safeguarding its own 昀椀nancial
stability while ensuring that the
most vulnerable communities
aren’t left behind.
than £3.1 million.
These numbers are not only
a barometer of the cost-of-living
crisis and its impact on tenants,
but a clear signal that the existing
rent collection systems used by
local authorities are struggling
to keep pace with what is now
required of them.
Although the annual in昀氀ation rate
has eased from its peak - hitting
2.6% in April, which is less
than expected and the lowest
it has been since 2021 - it still
remains stubbornly above the
Bank of England’s 2% target and
households continue to feel the
strain of cumulative economic
shocks.
Latest 昀椀gures report that
20.3 million people are now
living in 昀椀nancially vulnerable
circumstances across the UK, up
by 16% from 17.5 million in 2022.
While a number of factors are to
blame, persistently high energy
costs, rent hikes and soaring food
prices are three of the core issues.
Flexibility as a necessity,
not a luxury
A growing crisis in public
sector rental arrears
This 昀椀nancial tension is particularly
evident in the social housing
sector, where data shows a sharp
and sustained increase in rental
arrears.
Our recent Rental Arrears
Index revealed a sharp and
sustained increase in the number
of council-owned housing units
falling into arrears. As of March
2024, the average local authority
reported more than 4,400 social
housing units in rental arrears, up
signi昀椀cantly from 3,700 in 2019.
This means that, on average,
41% of council-owned units are
now behind on rent - compared
to just 35% 昀椀ve years ago. At
the same time, the average value
of rental arrears per council has
surged from £1.8 million to more
32
An economically turbulent few
years have exposed the fragility
of many household budgets,
while also demonstrating how
responsive, compassionate
policies - such as mortgage
holidays and deferred utility bills
- can provide vital and much
needed relief during times of
昀椀nancial need.
Flexibility is no longer a
hopeful request - it’s a baseline
expectation. In the private rental
sector, three quarters of landlords
are supporting tenants with the
rise of cost of living, and the public
sector must meet this evolving
standard.
After all, allowing residents
to manage payments in a way
that re昀氀ects their own unique
circumstances reduces the
chance of them falling behind
on rental payments, improves
cash 昀氀ow and helps prevent
more severe outcomes like
homelessness or spiralling debt.
To deliver this, more 昀氀exible
digital tools such as managed
planned payments, Open
Banking, Direct Debit schedules
and automated noti昀椀cations
are key for empowering sta昀昀 to
o昀昀er informed, empathetic and
adaptable solutions.
Digital transformation with
inclusion at its core
These tools enable real-time
visibility, align payment dates with
income cycles, and allow quick
GOVERNMENT AND PUBLIC SECTOR JOURNAL SPRING 2025
adjustments when circumstances
change. Just as important,
however, is how these processes
are communicated to tenants.
A personalised, empathetic
approach encourages
engagement, and by reframing
payment as a shared
responsibility, local authorities
can build trust and cooperation,
rather than driving avoidance and
escalation.
The UK is now well on the path
to becoming a cashless society,
but modernising payments is not
just a matter of e昀케ciency - it is
a matter of access, dignity and
fairness. Digital transformation
must not come at the cost of
social inclusion.
Around 8.5 million people in the
UK still lack the basic digital skills
required to con昀椀dently navigate
online services. This includes
some of the most 昀椀nancially
vulnerable groups - older people,
those on low incomes, or
residents in rural areas with poor
connectivity - who are most in
need of public support.
This is why a true
transformation strategy must be
WayneCampbell
inclusive by design. No one should
be forced into a digital channel
they are not equipped to use.
The time to act is now
For too long, the public sector
has grappled with outdated
infrastructure and fragmented
systems. Every day, residents
fall further behind on their rent
payments because they can’t
navigate rigid systems that don’t
meet them where they are.
Secure, simple and adaptive
payment solutions can empower
residents to stay on top of their
obligations, rather than feeling
overwhelmed by them. They
can also free up public sector
sta昀昀 from time-intensive manual
processes, enabling them to focus
on the human work of service and
support.
The public sector doesn’t just
have an opportunity to lead. It has
a duty to. By embedding agility,
compassion and innovation into
the way payments are collected,
a source of friction can be
transformed into a channel for
trust, inclusion and stability.
