I also had the same for a recent applicant and it was the first time I’d ever had an applicant ‘fail’ referencing. I had six months of bank statements though, so I could see enough to know that they were a safe bet financially even though technically they failed Open Rent’s affordability by a mere £11. Open Rent automate this process so the lack of a human involved meant that their system could not spot a recent change for the better in my applicant’s financial circumstances.
I feel for you regarding not being able to apply for RGI although after nearly 30 years renting property I prefer to guarantee my rent up front rather than in retrospect by doing my due diligence with each applicant. If you have any doubts about them at all, I’d say don’t offer them the tenancy.
A void is always cheaper than an eviction.