Summary: The complaint is about the way the Council bills for council tax when a taxpayer is in receipt of council tax reduction. We cannot uphold one part of the complaint, about when the Council sends out bills. But we do find fault that the Council does not send out calculations when it makes a change to its council tax reduction award. The Council has agreed to our recommendations.

The complaint

1. The complainant, whom I shall describe as Mr L, complains:

• the Council’s council tax system is set up in a way that allows it to overcharge. If a payment has left his account, but not arrived at the Council’s account, any bill issued in that time will be wrong;
• the Council sometimes does not give him the required 14 days’ notice of a change to his direct debit;
• the Council often takes too long to reassess his council tax after he tells it about changes in his circumstances;
• the Council sent revised bills, due to changes to non-dependent deductions. But the Council’s calculations did not make any sense when compared to the non-dependent deduction bands;
• the Council says it is not overcharging him. But he has asked the Council for statements explaining how it worked out changes to his council tax reduction. It has ignored these requests; and
• poor complaints handling by the Council’s customer services.

2. Mr L says:
• because of the problems listed above, the Council has often had to readjust his direct debit payments. But the way it does this, coupled with delays, often means he is paying more than he needs to, meaning budgeting is difficult;
• the Council could decide to only send bills on certain days of the month which would solve the billing issue. Or it could collect a payment and then recalculate over the following months; and
• the lack of statements means he does not understand the reasons for changes, eroding his trust that the Council’s council tax reduction calculations are correct.

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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 Mr L;
• made enquiries of the Council and considered its response;
• spoken to Mr L and considered information provided in emails from him;
• sent my draft decision to Mr L and the Council and considered their responses.

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What I found

Legal and administrative background

Council tax

6. Council tax is a tax made on domestic properties. Councils issue one bill to each household. Residents of dwellings are usually liable for council tax from the date they move into a property.
7. The council tax administration regulations do not specify a list of payment methods which must be offered by councils. But councils often offer a taxpayer the option to collect council tax by direct debit from their bank account. The council then takes an amount on a date agreed in advance with the taxpayer. A council taking payments by direct debit is bound by the direct debit guarantee. This says it will only take an agreed amount on the dates specified; it needs to give 14 days’ notice of any changes. If it does not do this, the bank reclaims the money and pays it back to the account holder.
8. The Council offers four direct debit payment dates for council tax. It offers other ways to pay council tax.

Council tax reduction

9. Each council has its own council tax reduction (sometime called council tax support) scheme; offering help with meeting council tax costs to those on a low income. Eligibility for these schemes is means tested.
10. Council tax reduction replaced council tax benefit some time ago. In contrast to council tax benefit, council tax reduction is part of the main council tax system (like other discounts and reductions). But in many councils, including this one, it is their benefits team that continue to administer the reduction.

Northampton Borough Council’s council tax reduction scheme 2020

11. The Council’s council tax reduction scheme for the year this complaint is about said when it awarded a reduction it needed to include “… a statement as to how that entitlement is to be discharged”.
12. It also noted a person who receives a council tax reduction decision could ask, in writing, for the Council to “…provide a written statement setting out the reasons for its decision on any matter set out in the notice”.

West Northamptonshire Council’s council tax reduction scheme 2021

13. In April 2021, the Council merged to become West Northamptonshire Council. Its council tax reduction scheme carries over many of the provisions set out in the old Council’s scheme.

Principles of good administrative practice

14. In 2018 the Ombudsman published its updated ‘Principles of good administrative practice’ guidance for local authorities. That guidance sets out some benchmarks for the standards we expect when we investigate the actions of local authorities. Some of the core principles are an expectation local authorities will be:
• ‘service-user focused’. One of the ways we outline what that looks like is ‘responding to service users’ needs flexibly…’; and
• ‘open and accountable’. Examples of what that looks like include giving reasons for decisions and keeping proper and appropriate records.

What happened

15. The information provided by the Council to the Ombudsman says, when it made or changed an award of council tax reduction, it sent a new council tax bill. The bill detailed what the new amount of council tax reduction was and for what period. The bill did not have a calculation of how the Council arrived at the amount of council tax reduction. The reverse of the bill said the claimant could request a written statement of reasons. It also advised them of their right to appeal a decision.
16. Mr L is self-employed with a fluctuating income from one year to the next. His adult daughter lives with him. He claims council tax reduction to help with his council tax costs. Mr L pays his council tax by direct debit.
17. In March 2020 the Council sent Mr L its council tax demand for the following tax year. In early April Mr L sent the Council his self-employed accounts for the previous year. He also asked to complain about attempts to overcharge him.
18. The Council did not respond to Mr L’s contact – it says because it wrongly sent the information to its team that dealt with council tax, when it should have gone to the team that dealt with council tax reduction.
19. As the year progressed, Mr L had to report further changes in circumstances: both because of changes to his own income and that of his non-dependent daughter.
20. In May Mr L complained to the Council. He contacted the Ombudsman in July when he had not received a response. We asked the Council to consider Mr L’s complaint. Its August stage one response:
• sincerely apologised for the delay responding to him;
• advised it was not overcharging him. His circumstances meant it needed to often adjust his council tax reduction award;
• confirmed it had considered if it could run a report of the council tax reduction calculations. But it was not possible to do that, due to the number of transactions it dealt with. It apologised it had not earlier advised Mr L it could not run this report.
21. Mr L asked the Council to consider his complaint at the second stage of the Council’s procedure. Its response advised it:
• again apologised for the delay in dealing with his complaint;
• did not provide notifications of revisions to council tax reduction entitlement, as there was no requirement in the scheme to do this;
• had run reports, on request, until 2019. But it had stopped this, as it was not cost effective;
• offered Mr L £50 as a goodwill gesture, in recognition of its delayed complaint response;
• responded to Mr L’s suggestion that it only issued bills on certain days of the month, to avoid the problems he experienced. It said, due to its caseload figures, that was not a practical suggestion.
22. During Mr L’s correspondence with the Council about this complaint he asked it several times for its calculations of his council tax reduction award. This was because he could not understand the figures the Council had used, when compared to the publicly available information – for example about non-dependent deductions.
23. In October 2020, Mr L resubmitted his complaint to the Ombudsman.
24. While we made enquiries, Mr L was in correspondence with the Council about further changes to his daughter’s income. Mr L had to chase the Council for a response. But in March 2021, a Benefit Appeals Officer responded to his contact. In the email the officer:
• provided an explanation of how the Council applied non-dependent deductions to its council tax reduction calculations;
• noted Mr L’s frustrations, due to it having to make eight recalculations of his council tax reduction award in the previous year, due to changes in his circumstances. But this was not something the Council could control;
• acknowledged this made payments difficult, due to the way the direct debit scheme worked. The officer suggested Mr L contact the Council’s council tax team to discuss if there were other payment options that would make budgeting more manageable;
• apologised for a delay in dealing with Mr L’s October email.
25. In response to my enquiries the Council:
• provided a folder with a breakdown of its calculations on Mr L’s council tax reduction, for each change during the period. It said it had produced this information specifically in response to my enquiries, as it did not record it as a matter of course;
• when it merged to become a new unitary authority (April 2021), it would begin to keep records of council tax reduction calculations;
• advised it would be happy to discuss different ways Mr L could pay his council tax, if he was having difficulties;
• advised:

“Payments due but not received cannot be taken into account so demands can be issued when payments are pending. This does occasionally mean an over or under payment is made where the next direct debit request has already been submitted to the bank as the direct debit payment change can take 14 days to take effect. Small over or under payments will result in the final payment of the remaining balance being slightly less or more to ensure the final account balance is zero. Frequent changes in the payment amount close to the direct debit payment date have in this instance meant further adjustments have been requested.”

26. I sent the folder of benefit calculations to Mr L and asked him to check it. His response advised that was “…exactly what I have been asking for all along”.

Analysis

The payment options

27. I can understand Mr L’s frustration with how changes in his council tax reduction interact with his council tax direct debit payments. But that is more a reflection of the common experience of self-employed council tax reduction claimants. This has been exacerbated this year by his daughter’s changes of circumstances, caused at least in part by the COVID-19 pandemic.
28. Mr L wants the Council to only run bills on certain days of the month, to avoid the issues direct debit billing leads to. He also suggests the Council could issue a revised demand but still collect the old payment amount and then recalculate over the coming months. But I cannot agree that these are practical solutions. The Council reasonably needs to provide its officers with a relatively regular turnover of work without adding extra administrative layers.
29. The council tax administration regulations do not specify a list of payment methods which councils must be offer. For this reason the Ombudsman cannot fault the Council for the payment arrangements it offers. So I cannot uphold this part of Mr L’s complaint.

Information about the council tax reduction calculations

30. Mr L asked the Council, on multiple occasions, for a breakdown of how his council tax reduction was calculated. He says he wanted to understand how the Council had arrived at its decisions, so he could check they were correct.
31. I find fault the Council did not, as a minimum, set out the council tax reduction calculation after Mr L asked for it. Taxpayers who request information are entitled to receive it. Without a way to understand how a council has worked out an award, they cannot meet our expectations around openness and accountability.
32. If Mr L had received the information when he asked for it, it would have gone some way to allowing him to understand the reasons for (what I accept are unavoidable) changes of council tax reduction. This will likely have given him a better understanding of what was happening with his account; helping with budgeting and giving him more reassurance the Council was seeking the correct charges.

The complaint responses

33. I also note the Council delayed responding to Mr L’s complaint and an October 2020 email from him. Those delays were fault. But the Council has already apologised for these delays and made a payment to Mr L. These are sufficient remedies.

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Recommended action

34. The Ombudsman is pleased the Council accepts fault: in delays in responding to Mr L, including his complaint, and sending some information to the wrong team. The Council has apologised and provided a token payment in recognition of these faults.
35. However, the Council has not provided a remedy for the problems Mr L had with getting information from the Council on its decision making. So I recommended the Council also, within a month of my final decision:
• writes a letter of apology to Mr L;
• pay Mr L a further symbolic payment of £50 for his unnecessary time and trouble ; and
• pay Mr L a further symbolic payment of £50 for his avoidable stress and frustration.
36. The Council has agreed to these recommendations. It said it accepted it did not act soon enough after Mr L contacted it.
37. In my draft decision I asked the Council for information about the changes it had said were going to happen after the Councils merged. In response it advised, to work in the same way as the council it merged with, it did send out council tax reduction calculations at the same time as its 2021/2022 council tax bills.
38. But the Council said it did not send out detailed calculations with every change in council tax reduction. It noted that most taxpayers’ accounts are straightforward. And, sending out separate calculations for every council tax reduction change would cause unnecessary confusion (it would need separate calculations because the council tax and council tax reduction run on separate computer systems). But it accepted that it did need to send the information, if requested.
39. The Council advised that, in response to Mr L’s complaint it:
• “[had] reviewed our processes advised staff of the incident and its consequences and making the training/reference material more robust.”
• “believe[d] we can also target these requests [for detailed council tax reduction calculations] and send them to a specific priority workstream so they are treated urgently and do not get mixed up with general correspondence.”
• “believe[d] we can change the wording [on council tax bills] from a passive statement to request information to a more informed statement that it is a right to have it should you so wish, something akin to ‘You are entitled to a written statement setting out the reasons for the reduction decision or, details of the appeals procedure. Please contact us within one month to request this … which will be in bold to stand out on the page.’”
40. It also noted it had a ‘customer portal’ where, once registered, citizens can have immediate access to updates.
41. The Council’s planned changes are suitable responses to the issues Mr L’s complaint highlighted. I ask the Council to give me, within a month of the date of this decision, an update on its implementation of these service improvements.

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Final decision

42. I uphold the complaint. The Council has agreed a remedy with the Ombudsman. So I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman