Summary: Mr B, complains that following a long history of queries about council tax and benefits, the Council failed to recall a council tax debt from bailiffs when a special payment arrangement was put in place in August 2017. Bailiff action took place as a result, causing distress. The Ombudsman finds there was fault by the Council both in the recovery process and in its complaint handling. That led to injustice for Mr B, for which a remedy has been agreed.

The complaint

1. The complainant, whom I shall call Mr B, complains that following a long history of queries about council tax and benefits, the Council failed to recall a council tax debt from bailiffs when a special payment arrangement was put in place in August 2017. Despite the special payment agreement, the debt remained with the bailiff who then took recovery action, causing distress.

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What I have investigated

2. I have investigated the actions of the Council in respect of the recovery of a debt of council tax owed by Mr B, leading up to and following court action in August 2017.

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The Ombudsman’s role and powers

3. 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)
4. The law says we cannot normally investigate a complaint when someone can appeal to a tribunal. However, we may decide to investigate if we consider it would be unreasonable to expect the person to appeal. (Local Government Act 1974, section 26(6)(a), as amended)
5. The Valuation Tribunal deals with appeals against decisions on council tax liability and council tax support or reduction.
6. 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)
7. 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

8. I considered all the information provided by Mr B about his complaint. I made written enquiries of the Council and took account of the information and evidence it provided in response. I provided Mr B and the Council with a draft of this decision and considered all comments received in response.

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What I found

Legal and administrative background

9. The primary legislation for council tax is the Local Government Finance Act 1992. The main secondary legislation concerned with collection and recovery is The Council Tax (Administration and Enforcement) Regulations 1992.
10. The tax is payable by monthly instalments. Councils have discretion to decide when the instalments will be payable, but the law says there can only be one instalment for one taxpayer in any one month. The council decides on the dates before the start of the tax year and they cannot be changed during the year.
11. Once a demand has been issued, if an instalment due is not paid, a reminder will be issued. If the payment is still not made, the full sum for the year becomes due as the right to pay by instalments is lost. A summons can then be issued, and the magistrates’ court may issue a liability order for the sum due. Once a liability order has been obtained, the council can seek to recover the debt by using enforcement agents (sometimes called bailiffs). Charges will be added at various stages of this recovery process.
12. The taxpayer can also enter into a formal arrangement to pay the council what is owed. It will be up to the council’s discretion what sort of arrangement to accept. Typically, the council will look to have the debt cleared by the end of the financial year and, if the debt is for a previous year, will also want to see payments for the current year kept up.

The process followed in this case

13. The Council sent Mr B his council tax bill for the 2016/17 financial year on 7 March 2016. It showed a total of £2158.19 for the year, to be paid in one instalment of £178.19 to be followed by 11 instalments of £180. This did not include the sum carried forward from 2015/16 which at 26 February 2016 stood at £136.80.
14. On 3 February 2017 Mr B sent an email to the Council asking for some information and stating that he had started paying his council tax for 2016/17 and could not afford to pay more than £200 a month. The Council did not treat this as a request for a payment arrangement. The Council says Mr B had had three previous liability orders for this account and four for a previous property, and it considers he is aware that statutory instalments are payable and that when recovery action takes place for non-payment an opportunity arises to set up a payment arrangement with the Council. The Council accepted, when it replied later to Mr B’s complaint, that it should have responded to this suggestion that a payment arrangement was being requested. But, as the account had not yet reached the relevant stage in the recovery process, it was not fault not to agree a payment arrangement at this time. Mr B was still liable to pay the instalments as billed.
15. On 7 March 2017 the Council sent Mr B the bill for his council tax for the 2017/18 financial year. It showed a total of £2251.78 for the year, to be paid in one instalment of £183.78, to be followed by 11 instalments of £188. This did not include the sum carried forward from 2016/17 which at 24 February 2017 stood at £2094.99.
16. On 19 May 2017 the Council sent Mr B a bill which showed the balance brought forward at £1894.99 (made up of £136.80 from 2015/16 and £1758.19 from 2016/17), plus £2251.78 for 2017/18, less £400 paid, giving a total of £3746.77 due. The Council required one instalment of £371.77 on 5 June 2017 followed by nine instalments of £375.
17. On 15 June 2017 the Council issued a reminder for a sum deemed owing from 2015/16. Mr B telephoned the Council. Its records of the call note that for 5 June he should have paid £371.77 but had only paid £171.77, and he declined to make a payment at this time. Mr B says this is not correct as he had paid £200 on 6 June, so the note should have referred to an underpayment of £171.77. However, if that was an error in the Council’s note making it did not impact on the fact that Mr B had not paid as billed and was still deemed to owe a significant sum.
18. On 6 July 2017 the Council issued a summons for a council tax debt of £136.80 for 2015/16 (an accumulated figure, starting with £0.11 from 2013/14) and £1758.19 for 2016/17, giving a total of £1894.99.
19. At court on 1 August 2017 the Council obtained a liability order. That was automatically passed to bailiffs on 15 August 2017 for recovery of the relevant sum.
20. However, the Council then made a special payment agreement (SPA) with Mr B on 18 August 2017. The agreement was that Mr B would pay £170 per month on 25 August 2017 monthly thereafter to 25 June 2018, followed by one instalment of £159.99 on 25 July 2018. He was still required to pay his current financial year’s council tax at the same time, in monthly instalments of £185.34.

The first opportunity to recall the debt from the bailiffs

21. At this point, having made an agreement with Mr B, the Council should have recalled the debt from the bailiffs. But it did not do so, and that was fault.

The second opportunity to recall the debt from the bailiffs

22. Because the debt was not recalled from the bailiff, it continued its action to recover it. The bailiff had issued a notice of enforcement on 16 August 2017, and then it issued a second enforcement warning letter on 30 August 2017. Having received the letter Mr B contacted the Council on 7 September 2017. The Council’s records from this call record that the Council acknowledged there was a SPA in place and it apologised and said it would request return of the account from the bailiffs. But it failed to do so, and that was fault.

The third opportunity to recall the debt from the bailiffs

23. On 18 September 2017 the bailiffs visited Mr B’s home. Mr B was out. The bailiffs records state: “No contact (residence confirmed) – called at rated address – neighbours tried”. Mr B says however that although he was out, his wife was home and she spoke to the bailiffs from an upstairs window. When he found out about the visit he telephoned the bailiff and advised he had a SPA with the Council. He then rang the Council. Its notes show that on this occasion the Council did call the bailiff to request the case be returned to it. No further bailiff action was then taken.

Mr B complains to the Council

24. The Council’s published complaints procedure says that the target response time at each stage is 20 working days, and that if it is likely to take longer to resolve then updates and a revised timescale should be provided to the complainant to keep them informed. The published complaints procure also acknowledges that where complaints are upheld, the remedy needs to be appropriate to the complaint, and notes that if the Council cannot put the person back in the position they would have been but for the fault then financial remedy might be the most appropriate approach.
25. Mr B complained to the Council on 3 December 2017, and the Council received this on 5 December 2017. It sent a holding response on 3 January 2018 apologising for the delay and promising a full response by 10 January 2018.
26. The Council’s records show it made two attempts to call Mr B on 8 January and that a message was left, although they do not show what the message was. The Council issued its response at stage one of its complaint procedure on 18 January 2018. The delay in providing its response was fault. The Council said it apologised for the actions of the bailiffs and for any distress caused, and said that due to a lack of communication between the bailiff team and the council tax department the bailiffs had continued to pursue Mr B for the debt even though he had an arrangement in place. The Council should have been clearer in its response that in fact the bailiff had acted appropriately according to the information and instruction it had received from the Council, and it was fault on the part of the Council in not having recalled the debt when it should have done so.
27. On 4 April 2018 Mr B requested escalation of his complaint to the second stage of the Council’s complaint procedure. The Council acknowledged this on 10 April 2018 and said its response would be due by 2 May 2018 and that it would advise if there was to be a delay. The response was issued on 31 May 2018. In the interim, on 3 May 2018 the Council had sent Mr B an email saying there was a delay in providing the response to him due to the complexity of the case, but it anticipated responding by the end of the following week. The Council also offered Mr B the opportunity to attend the Council’s offices to go through the response with him, once it was ready. Mr B declined this offer. In its response of 31 May the Council apologised again for the delay. The Council accepted it had failed to notify the bailiffs about the SPA and said it was sorry for any ‘misunderstanding’. There is no reasoning given for why the Council considered that what had happened resulted from a misunderstanding. The Council offered no financial remedy.
28. The delays in dealing with the complaint, the failure to clearly acknowledge that there was fault in failing to recall the debt from the bailiff on two occasions, and the failure to consider a remedy for the impact of these failings were flaws in the Council’s complaint handling, and were fault.

Injustice to Mr B

29. As a result of the failings referred to above, Mr B and his wife were caused distress by the action of the bailiffs which could and should have been prevented. In addition, Mr B was put to some time and trouble pursuing his complaint about the matter.

Agreed action

30. In recognition of the injustice cased to Mr B, I recommended that within four weeks of the date of the decision on this complaint the Council pays him £250. It may offset this against outstanding debt owed to it by him.
31. I further recommended that within three months of the date of the decision on this complaint the Council:

• reviews relevant procedures to ensure so far as possible that failings in the recovery process as highlighted by this complaint do not recur, and demonstrates to the Ombudsman what action has been taken in this regard; and
• reviews its complaint handling to ensure that where there are delays, updates are provided, and where there is fault this is clearly acknowledged with remedy offered where appropriate.

32. The Council has agreed to my recommendations.

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Final decision

33. I have completed my investigation on the basis set out above.

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Parts of the complaint that I did not investigate

34. For the reason set out in paragraph 3 above, I did not investigate any matter prior to 2017. Mr B could have complained sooner to the Ombudsman about that period and there are no grounds for the Ombudsman to exercise discretion to look at that period now.
35. For the reasons set out in paragraphs 4 and 5 above, I did not investigate matters relating to the calculation of Mr B’s entitlements to benefits associated with his council tax liability. Decisions on entitlement to benefit carried appeal rights which it would have been reasonable for Mr B to have exercised, and there are no grounds for the Ombudsman to exercise discretion to look at those matters.
36. For the reason set out in paragraph 6 above, I did not investigate any matters which were put before the court.

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Investigator's decision on behalf of the Ombudsman