Summary: Miss X complains the Council wrongly awarded a council tax exemption and later sent her a bill for over £1,000. This fault by the Council caused Miss X distress and financial hardship as she did not budget for this expenditure. A suitable remedy for the injustice caused is agreed.

The complaint

1. Miss X complains the Council awarded her a council tax student exemption only to later tell her this was an error.
2. Miss X says the Council’s demand that she pays over £1,000 has caused her distress and hardship.

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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. 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

5. As part of the investigation, I have:
• considered the complaint and the documents provided by the complainant;
• made enquiries of the Council and considered the comments and documents the Council provided;
• discussed the issues with the complainant;
• sent my draft decision to both the Council and the complainant and invited their comments.

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What I found

6. Miss X moved into a property in November 2017 and applied to the Council for a council tax discount as she was a part- time student. Miss X filled in the necessary forms and provided evidence to the Council about her course. The Council wrote to Miss X saying she had nothing to pay. Miss X says she rang the Council to query this and was advised she was exempt because she was a student.
7. Miss X subsequently moved to a different property. She contacted the Council to advise it of her move and to ask for the exemption to be transferred to the new property. The Council told Miss X she would need to complete a new form but she did not need to provide any additional evidence.
8. Miss X says the Council contacted her by telephone to ask why she had not ticked the full time student box. She explained this was because she was a part time student. Miss X had not previously ticked the full time student box. The Council realised it had made an error by awarding Miss X an exemption when she was a part time student. The Council sent Miss X a backdated bill for over £1,000.
9. Miss X complained to the Council. She said that she applied for a council tax discount because she was a part time student and believed she was entitled to a reduction. She said she was shocked to be told she was exempt but she had provided the correct information to the Council and had also telephoned to check the exemption was correct, so she assumed the decision was correct.
10. The Council replied saying it had issued amended council tax bills as follows:
• £317.33 for the year 2017/2018 and
• £767.02 for the year 2018/2019.

The Council apologised for awarding the exemption in error but said the bills were correct and payable. The Council said it would allow Miss X to pay in instalments if unable to pay the amount in full.

Analysis

11. There is clear fault in this case. Miss X applied for a reduction in her council tax because she was a part time student. The Council wrongly gave her an exemption thinking she was a full time student. There is nothing to suggest Miss X provided any incorrect or misleading information about her status.
12. As fault is identified I have to consider how Miss X has been affected. Miss X is now being asked to pay council tax she thought she would not have to pay. However, if the Council had acted without fault originally, Miss X would have known sooner that she had to pay the amount now demanded. Looking at the issue on this basis, Miss X is not in a worse position than she would have been but for the fault.
13. However, Miss X did not budget for this expense. As a part time worker on a limited income, Miss X says she carefully budgeted her money to ensure she could meet her expenses. She says she has made financial decisions based on the fact she did not have to pay council tax. She is now faced with a debt of £1084.35 which she cannot afford to pay and has not budgeted for.
14. I consider Miss X is in a worse position because of the Council’s fault. If the Council had told Miss X of the charges at the correct time not only could she had adjusted her spending and budgeted for the charge, she could also have applied for council tax reduction and/or discretionary hardship. It is possible this may have reduced the amount of council tax Miss X has to pay. However, she is left not knowing if she would have been entitled.
15. When I spoke to Miss X she said she hoped the Council would write off the debt. Even though there is fault, I am not persuaded it justifies asking the Council to write off the debt in full. I am aware Miss X’s personal financial position has changed recently and she says she will need a long time to repay this debt. I consider the Council should allow Miss X as long as necessary to repay the debt, even if this takes several years. As the debt is a direct result of the Council’s fault, Miss X should not be penalised by having to pay more than she can realistically afford. I also consider the Council should make a payment to Miss X to recognise her distress.

Agreed action

16. To remedy the injustice caused to Miss X as a result of the Council’s fault it will, within one month of my final decision;
• Pay Miss X £300 to recognise the distress caused by the fault. This payment can be offset against the amount owed; and
• Enter into a realistic payment schedule with Miss X based on her actual income and expenditure. The Council should agree to a repayment schedule as long as necessary to ensure Miss X does not experience any further financial hardship.

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Final decision

17. I have completed my investigation with a finding of fault for the reasons explained in this statement. The Council has agreed to implement the actions I have recommended. These appropriately remedy the injustice caused by fault.

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Investigator's decision on behalf of the Ombudsman