Incorrect rent formula could see council residents refunded £1.8m

At the time, external auditors Bishop Fleming revealed that approximately 1,200 tenants had been overcharged and more than 1,600 had been undercharged.

The council is planning to refund money owed to tenants dating back up to six years, in line with the “statutory limit”, although the rent errors date back further.

Mid Devon District Council will wait until the repayments have been made before reviewing any evictions and conducting a “legal review and any next steps on a case-by-case basis”.

A Mid Devon housing service delivery report said it was satisfied that the overpaid rent “had not been a material factor in any evictions”.

The council said the estimated £1.8m will be paid to tenants out of the Housing Revenue Account.

Simon Newcombe, head of housing and health at Mid Devon District Council, said: “Following the discovery of our housing rent error, the council took immediate steps to rectify the error, and this work remains ongoing.

“All tenants were contacted towards the end of 2024 and are aware if they have been under or overcharged. As of January 2025, rents were also corrected for any overcharged tenants. As previously stated, the council is not looking to recoup any money from underpayments and rent for those in the undercharged category will stay the same unless there is a change in tenancy.

“In terms of overpayments, the council is planning to refund money owed, dating back up to six years, which is based on the legal advice given to us. Six years is the statutory limitation, meaning the maximum time after an event that legal proceedings can be started.”

The council will issue refunds in tranches, with tenants who have not been in receipt of either Universal Credit or housing benefit likely to be refunded first, followed by those in receipt of housing benefit and finally those who may have had some of their rent paid for via Universal Credit.

Mr Newcombe added: “We hope to issue these first refunds in the upcoming months. For those on Universal Credit, refunds are likely to take longer than we hoped. This is because the calculation of Universal Credit payment sits with the Department for Work and Pensions (DWP) and we cannot process these refunds until the DWP has calculated the amounts and shared this information with us.

“Although this may take some time, we continue to work closely with them to ensure we can process refunds as quickly as we can. We will also be writing to tenants in due course to issue this update.”

A DWP spokesperson said: “We’re aware of the issue affecting Mid Devon and are currently exploring options for how we can support them.”