Summary: Miss X complains the Council is incorrectly seeking payment of council tax from her. She says the Council re-calculated her council tax liability and is wrongly seeking payment through the courts. Miss X says the Council’s actions caused her unnecessary stress and anxiety. The Ombudsman finds no fault in the Council seeking recovery of unpaid council tax, but some fault in the way it handled Miss X’s complaint. The Council has agreed to provide a remedy to address the injustice to Miss X.

The complaint

1. Miss X complains the Council is incorrectly seeking payment of council tax from her. She says the Council re-calculated her council tax liability and is wrongly seeking payment through the courts.
2. Miss X says the Council’s actions have caused her unnecessary stress and anxiety.

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The Ombudsman’s role and powers

3. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
5. We cannot investigate a complaint about the start of court action or what happened in court. (Local Government Act 1974, Schedule 5/5A, paragraph 1/3, as amended)
6. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

7. I discussed the complaint with Miss X and considered the information she provided.
8. I made enquiries to the Council and considered the information it provided.
9. Miss X and the Council have had the opportunity to comment on a draft of this decision. I have considered their comments before making a final decision.

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What I found

Council tax and council tax reduction schemes

10. The Local Government Finance Act 1992 gives local authorities the power to levy and collect a dwelling tax. This is known as council tax.
11. The Council Tax (Administration and Enforcement) Regulations 1992 cover both the way councils collect payments of council tax and the way councils can recover council tax debt.
12. In April 2013, the council tax benefit scheme was replaced by locally determined council tax reduction schemes. Council tax reduction (CTR, also known as council tax support) is a discount, not a benefit. If someone is paid too much CTR the Council can reduce the amount of CTR and so increase the amount of council tax owed. We call these changes CTR reversals.
13. If the Council’s CTR Scheme says how it deals with challenges to reversals (sometimes called ‘overpayments’) a claimant can appeal to the Valuation Tribunal. If the scheme does not say how the Council will deal with CTR reversals, the Valuation Tribunal has no jurisdiction to consider an appeal.
14. To use the various powers available to it to recover unpaid council tax, a council must apply to the Magistrates Court for a liability order against those it believes are liable. Before a council can pursue someone for council tax, it must send a demand. It must also issue at least one reminder notice before issuing a summons for a liability order in the magistrates’ court. Once a council has obtained a liability order it can take recovery action.
15. A liability order gives a council legal powers to take enforcement action to collect the money owed. The Council can decide which recovery method it wishes to use but it can only use one method for one liability order at one time.

The Council’s CTR scheme

16. Paragraph 74.1 of the Council’s 2018/2019 CTR scheme policy says “The applicant […] must notify any change of circumstances which the applicant might reasonably be expected to know might affect his entitlement to, or the amount of, a reduction under the authority’s scheme […] by giving notice to the authority”.
17. Paragraph 91.1 of the policy says “The authority will use information provided by the DWP and HMRC for the purposes of Council Tax Reduction, council tax liability, billing, administration and enforcement as outlined within Schedule 2 of the Local Government Finance Act 1992 as amended by the Local Government Finance Act 2012 and the Social Security (Information-sharing in relation to Welfare Services etc) (Amendment) Regulations 2013”.
18. The policy says a person may appeal against the Council’s decisions about CTR entitlement or the amount of CTR to which that person is entitled. Where a person remains dissatisfied with the Council’s decisions, the policy says they may appeal to the Valuation Tribunal.

The Council’s complaints policy

19. The Council’s complaints policy says a Stage 1 response will be provided within 10 working days after it is allocated to a senior manager.
20. The policy says a Stage 2 response should be responded to within 25 working days but can be extended up to 65 working days for complex cases or where there is a reason to extend. It says the complainant will be kept informed of the timescales throughout the procedure.

Universal Credit

21. Universal Credit is a payment to help with living costs. A person may be eligible for Universal Credit if they are on a low income or out of work.

What happened

22. Miss X became unemployed in October 2018 and claimed Universal Credit. The Department of Work and Pensions (DWP) told the Council in November 2018 that Miss X’s entitlement to Universal Credit had started in October 2018.
23. The Council applied a reduction to Miss X’s council tax account in December 2018 based on her receipt of Universal Credit. It backdated its calculation to when Universal Credit was granted. This reduced the amount of council tax Miss X was required to pay. The Council wrote to Miss X in December 2018 to tell her about the CTR and to provide a new council tax bill.
24. At about this time, Miss X found new employment.
25. In January 2019, Miss X called the Council to ask why her council tax bill had reduced. The Council told her it was because she was receiving Universal Credit and that payments were up to date.
26. In December 2018 and January 2019, the DWP told the Council Miss X’s Universal Credit had stopped.
27. In February 2019, the Council updated Miss X’s council tax account based on the information provided by the DWP resulting in a reversal of CTR. The Council wrote to Miss X to tell her about the reversal and said it was because there had been a change in her income. The Council sent Miss X a revised council tax bill.
28. A few days later, the Council re-calculated Miss X’s CTR again. It removed the award of Universal Credit, increasing the council tax reversal applied to Miss X’s account. The Council wrote to Miss X to tell her it had made a correction regarding her income and provided a revised council tax bill.
29. In March 2019, Miss X called the Council to ask about the revised bill. Miss X disagreed with the bill and said the Council had previously told her in January that her payments were up to date. She said she had not applied for CTR.
30. Miss X complained to the Council on 12 March 2019.

The Council’s response

31. The Council replied on 14 March 2019 and explained that CTR had been calculated based on Miss X’s receipt of Universal Credit. It said CTR had been recalculated again when the Council was informed about changes to Miss X’s Universal Credit by the DWP.
32. Miss X remained dissatisfied and escalated her complaint to Stage 2 on 2 April 2019.
33. In July 2019, Miss X moved to a different address outside of the Council’s area. The Council sent a final council tax bill for the outstanding balance.
34. On 15 October 2019, Miss X called the Council and said she had not received a response to her Stage 2 complaint. Miss X maintained she should not have to pay the outstanding balance. The advisor provided an email address for the council tax billing team and told Miss X to contact them if she disputed the bill. The advisor said he would place a hold on recovery action while the complaint was being looked into.
35. The Council responded to Miss X’s Stage 2 complaint on 13 November 2019. It said the information initially given to Miss X regarding her CTR was correct at the time she called, but changes had been subsequently made based on the information from the DWP. It said it had checked Miss X’s account and was satisfied the correct amount of CTR had been applied. It said Miss X was required to pay the outstanding balance.
36. Following the Council’s response, the hold on recovery action for Miss X’s council tax arrears was lifted.
37. On 2 December 2019, the Council sent Miss X an unpaid council tax reminder.
38. On 8 January 2020, the Council issued Miss X with a summons to attend court for unpaid council tax.
39. Miss X remained unhappy with the Council’s actions and brought her complaint to the Ombudsman.

Analysis

40. I have exercised discretion in investigating Miss X’s complaint back to 2018. This is because Miss X became aware of the issue in March 2019 and brought her complaint to the Ombudsman within 12 months of that date.
41. Although Miss X received a court summons, the matter has not been dealt with in the courts.
42. I acknowledge Miss X says she did not apply for CTR. The Council confirms it applied a reduction to Miss X’s account based on the information provided to it by the DWP that she was receiving Universal Credit. This is in line with its policy and there is no evidence of fault in this matter.
43. The Council’s application of a reduction to Miss X’s council tax bill reduced the amount she was required to pay. I am therefore satisfied this did not cause an injustice to Miss X.
44. The Council wrote to Miss X to tell her it had applied a reduction. The notification letter stated Miss X was required to tell the Council immediately if her circumstances changed. The Council’s CTR policy also explains this requirement.
45. Whilst I acknowledge Miss X may not have been provided with a copy of the Council’s CTR policy, I am satisfied the Council’s notification letter states this requirement.
46. Miss X says she did not receive this letter. However, having reviewed the evidence, I am satisfied the Council’s letters were posted to Miss X’s correct address at the time. On this basis, they are deemed to have been correctly served (Local Government Act 1972 (Section 233)). There is no evidence of fault in the Council’s actions regarding this matter.
47. Miss X says the Council told her that her account was paid up to date. However, this was in January 2019 while CTR was still applied. The Council later recalculated Miss X’s bill having received notification from the DWP that her entitlement to Universal Credit had stopped.
48. The circumstances regarding Miss X’s entitlement to CTR changed. Subsequent recalculation of that entitlement based on her new circumstances is not evidence of fault by the Council.
49. Miss X says she subsequently called the Council and was told by an advisor that she should not have to pay the outstanding balance. However, I have listened to all the available call recordings dating back to October 2019 and I am unable to verify that this advice was given.

Recovery of unpaid Council Tax

50. The Council told Miss X it had recalculated her CTR based on her new income. Following this calculation, the Council said Miss X was required to pay the balance of the council tax account.
51. I am satisfied the Council is not at fault in how it sought recovery of unpaid council tax. It informed Miss X of the adjustments made and the reasons why, and issued council tax bills and notification letters accordingly. I acknowledge Miss X says she did not receive some of this correspondence, but as previously stated, the evidence shows the Council’s correspondence was correctly served.
52. The Council told Miss X the council tax arrears were recoverable. Because the arrears remained unpaid, it issued a reminder and subsequently a court summons in line with relevant legislation.
53. I therefore find no fault in the Council’s decision to seek payment of council tax arrears from Miss X.

Delays in processing information from the DWP

54. The Council says it received notification from the DWP in December 2018 that Miss X had started work in November 2018. It did not process this notification until February 2019.
55. If the Council had acted on this information from the DWP sooner, the CTR reversal would have been less. The Council acknowledges there were delays in processing this information.
56. It is positive the Council has acknowledged this delay. However, whilst the Council may be at fault for the delay, this is mitigated by Miss X not telling it about her change in circumstances.
57. Had Miss X told the Council when her entitlement to Universal Credit ended, the CTR reversal would have been less. The Council is therefore not solely responsible for the delay in correcting Miss X’s CTR calculation. Miss X had a responsibility to inform the Council about changes in her circumstances. I cannot therefore hold the Council solely responsible for the delay in correcting her CTR.
58. I acknowledge Miss X would have been required to pay council tax for the period after her entitlement to Universal Credit ended. As a result, whilst the Council may be at fault in this matter, I do not consider this caused a significant injustice to Miss X.

The Council’s CTR policy

59. The Council’s current CTR policy is silent on how the Council treats CTR reversals. It states an applicant may appeal to the Valuation Tribunal if they remain unsatisfied with the Council’s appeal process. The Council’s policy for 2018/2019 said the same.
60. Because the policy does not explain how CTR reversals are dealt with, the Tribunal has no power to consider whether the CTR reversal arose from an error by the applicant or the council. In this case however, I do not consider this caused an injustice to Miss X because she did not appeal to the Tribunal and did not indicate she wished to.

Delays in complaint handling

61. I have found fault in the way the Council handled Miss X’s complaint.
62. Miss X made her complaint to the Council on 12 March 2019 and received a response on 14 March 2019. There is no fault in the way the complaint was handled at Stage 1.
63. But the Council says Miss X asked for her complaint to be escalated to Stage 2 on 2 April 2019. The Council did not provide a response until 13 November 2019. This is considerably more than the maximum of 65 working days and there is no evidence the Council kept Miss X informed of the timescales during this period. The Council has not provided an explanation for this delay. I therefore find the Council to be at fault in this matter.
64. The injustice to Miss X flowing from the fault identified was worry and uncertainty that she would be required to pay the outstanding council tax bill. The Council’s delay in providing its complaint response meant it delayed informing her of its decision and the reasons why.

Agreed action

65. To address the injustice arising from the fault identified, the Council has agreed to take the following action:

• Provide an apology to Miss X within four weeks of the final decision;
• Within four weeks of the final decision, remind staff to adhere to the Council’s complaints policy, specifically to respond within the relevant timeframes, and provide updates to complainants, and
• Ensure its CTR policy is clear about how the Council will treat CTR reversal. If the Council signposts to the Valuation Tribunal, it should ensure the policy brings CTR reversals within the jurisdiction of the Tribunal. The Council should provide evidence of this to the Ombudsman by 26 February 2021.

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Final decision

66. I have found no fault in the Council seeking recovery of unpaid council tax, but some fault in the way it handled Miss X’s complaint. The Council has agreed to my recommendations and I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman