A major London-based RSL is set to trial an incentive system for tenants in the wake of a successful experiment by Irwell Valley Housing Association.
Consultant RDHS is holding talks with the unnamed association ahead of a final decision by its board.

In the north, New Fylde Housing and Manchester Methodist Housing Group are both introducing loyalty schemes of their own.

The moves, which offer bonuses for "good" tenants, could form the basis of the government's equity stakes scheme.

They are strongly backed by Housing Corporation chief executive Norman Perry. At last week's launch of Irwell Valley's final report on its 'gold service', Perry said that this concept might prove to be a "defining moment" in social policy.

The report showed that Irwell Valley had saved almost £2 for every £1 invested in the scheme. Bonuses, awards and discounts cost the association £400,000 between 1998 and 2001. But savings on empties, repairs and management totalled £700,000.

A tough rent collection regime has transformed Irwell Valley from a below-average performer to well above average, with 100 per cent collection rates in the last three years. Arrears have halved to 4.8 per cent, while those of other landlords in the region rose.

Collection is now part of legal services, and tenants with arrears are issued with a notice seeking possession after only three weeks. The 20 per cent of tenants not in gold service receive only essential repairs and no improvements to their homes.

RDHS director Andrew Gray said Irwell Valley had challenged the view that asset management was more important than customer relations. "How can you pay for improvements if the tenant is not paying the rent?" he asked.

Chief executive Tom Manion called on the government to relax housing benefit rules to aid his plan to offer dividends based on the association's annual surpluses. He warned the government must build in qualification rules to its equity stakes scheme.

"It has to be earned, and you must be able to take it away again," he said.