Summary: Ms Y complains the Council failed to credit payments she made under a payment agreement to her arrears and current year’s liability. The Council is at fault as it did not clearly explain that a payment arrangement made in January 2020 did not cover the current year’s Council Tax liability. But this lack of clarity did not cause significant injustice to Ms Y.

The complaint

1. Ms X complains on behalf of Ms Y. She complains that the Council is wrongly seeking recovery of Council Tax arrears from Ms Y which she considers she does not owe. Ms X considers the Council has failed to credit the payments she has made to both her arrears and current year’s liability in accordance with the repayment agreement so it wrongly considers she is in arrears.

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What I have investigated

2. I have investigated events from April 2019. I explain at the end of the statement why I have not investigated some aspects of Ms Y’s complaint.

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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. 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’. We provide a free service, but must use public money carefully. We may decide not to start or continue with an investigation if we believe:

• it is unlikely we would find fault, or
• the fault has not caused injustice to the person who complained, or
• the injustice is not significant enough to justify our involvement.

(Local Government Act 1974, section 24A(6), as amended)

5. 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

6. I have:

• Considered the complaint and the information provided by Ms X;
• Made enquiries of the Council and considered the information provided;
• Invited Ms X and the Council to comment on the draft decision. I considered any comments received before making a final decision.

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What I found

Law and administration

7. 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. The Tribunals, Courts and Enforcement Act 2007 and associated regulations cover the way bailiffs may recover debts.
8. The council tax bill for the year is due on the 1st April. A council will usually collect payment through monthly instalments. If any instalment is missed the council will send the liable person a reminder. If a payment is still not made or a further payment missed, then the entire outstanding balance will be due (that is the full amount for the rest of the year).
9. To use the various powers available to it to recover unpaid council tax, a council has to apply to the Magistrates Court for a liability order against those it believes are liable. Once a council has obtained a liability order it can take recovery action.
10. A liability order gives a council legal powers to take enforcement action to collect the money owed. This can include taking deductions from benefits, getting an attachment of earnings (by which deductions are taken directly from earnings by an employer and passed to the Council) or using bailiffs.
11. Councils can agree a payment arrangement if a person has received a summons or liability order. It is a matter for the council to decide what arrangements it can accept. Typically, councils will expect the debt to be cleared by the end of the financial year. If the debt is for a previous year, councils will usually expect the current year’s payments to be maintained.

What happened

12. Ms Y has accrued Council Tax arrears over several years. The Council agreed repayment plans with Ms Y in 2016 and 2018 for her to pay £100 per month. I understand the 2018 arrangement was cancelled in February 2019 as Ms Y did not pay the instalments. I refer to this as way of background as the events of 2016 to March 2019 do not form part of this investigation.
13. Ms Y’s Council Tax bill for 2019/20 amounted to £2874.33. This included arrears of £2356.23 and costs together with her liability for 2019/20. The Council issued a reminder in May 2019 as Ms Y had not paid enough to cover the instalments due by that time. The Council issued a second reminder in September 2019 and a final notice in October 2019 as she had not paid September’s instalment. As a result Ms Y lost the right to pay by instalments and the full amount became due.
14. In October 2019, Ms Y’s representative contacted the Council to query why the final notice had been issued as Ms Y paid an instalment in October 2019. The Council responded in December 2019. It advised the payment made by Ms Y in October 2019 was for the September 2019 payment. It also advised Ms Y needed to pay £480 to avoid further recovery action and costs. The Council also advised Ms Y owed £2356.23 from previous years and she should contact the Council with a separate arrangement to pay this amount. Two days later the Council applied for a summons as Ms Y had not paid £480.The courts granted a liability order in January 2020.
15. In response to a letter from Ms Y’s representative the Council set up a payment arrangement for Ms Y to pay £100 per month. In an email to the representative, the Council said:

“I can confirm the arrangement of £100 has been reset up as this was cancelled back in February 2019. A separate letter will be posted to Ms Y to confirm the arrangement”

16. The statement of account provided by the Council shows Ms Y did not make any payments after December 2019. The Council issued a reminder in March 2020. Ms Y did not make any payments so the Council passed the arrears to enforcement agents to collect.
17. Ms Y has made payments of around £83 per month towards her liability for 2020/21.
18. In July 2020, Ms Y’s representative made a complained to the Council that it had not responded to a complaint forwarded by the Ombudsman in 2015 and set out her complaint about how the Council had dealt with Ms Y’s Council Tax since 2012. Ms Y’s representative said Ms Y has entered into an arrangement to pay £100 per month to cover both the monthly instalments and arrears. The Council responded to Ms Y and said it had never entered into an arrangement for her to pay £100 per month to be split between the arrears and current year’s instalments.

Analysis

Payment arrangement

19. Ms Y considers she entered into a payment arrangement to pay £100 per month towards the arrears and current year’s liability. The Council’s position is the arrangement covered the arrears only and Ms Y had to separately pay the current year’s liability.
20. I understand Ms Y did not have a payment arrangement between February 2019 and January 2020 as the arrangement was cancelled in February 2019. The Council reinstated the payment arrangement in January 2020 so the key issue is whether it clearly explained the terms of the payment arrangement at this time.
21. The Council has not provided a copy of the letter it sent to Ms Y when reinstating the payment agreement in January 2020. But its email to Ms Y’s representative advising it had reinstated the payment arrangement does not clearly explain the payment of £100 per month was only for the arrears and Ms Y needed to pay her current year’s liability separately. The Council did not set out when the instalments should be paid nor the duration of the agreement. It is usual for councils to expect the current year’s liability to be paid when there are arrears for previous years. But the Council should clearly explain the terms of the arrangement. So, on balance, I find the lack of clarity is fault.
22. But I do not consider the fault has caused significant injustice to Ms Y. The statement of account provided by the Council shows Ms Y did not make any payments in accordance with the payment agreement between January and March 2020. So, I cannot conclude the lack of clarity caused the Council to cancel the agreement and refer Ms Y’s arrears to the enforcement agents to collect. However, the Council should ensure payment arrangements clearly set out what the payments are for, when they should be paid, whether separate payments are required for the current year’s liability and the duration of the agreement.

Summons of December 2019

23. The Council applied for a summons just two days after it replied to Ms Y’s representative’s letter querying the final notice. On balance, I consider this was fault, particularly when the Council had taken two months to respond to Ms Y’s representative’s letter. Furthermore, two days may not be sufficient time for a person to make a payment and prevent recovery action. It would have been appropriate to allow a further seven days for Ms Y to make the payment. However, Ms Y was due to pay the full year’s liability of £480 but only made a payment of £76.90 in December 2019. This payment would not have been sufficient to prevent the Council applying for a summons. I therefore do not consider the fault caused significant injustice to Ms Y.

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Final decision

24. The Council is at fault as it did not clearly explain that a payment arrangement made in January 2020 did not cover the current year’s Council Tax liability. But this lack of clarity did not cause significant injustice to Ms Y so I have completed my investigation.

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Parts of the complaint that I did not investigate

25. Ms X has also complained about how the Council handled her Ms X’s Council Tax account since 2012. I have not investigated this matter as our records show Ms Y made complaints to us in 2015 about how the Council dealt with her Council Tax account between 2012 and 2015. I cannot revisit these matters. We also expect people to make a complaint to us within 12 months of when they became aware of their complaint, unless there are good reasons why they could not do so. I have not seen any reason why Ms X or Ms Y could not make a complaint sooner so I will not exercise my discretion to look at events before April 2019.

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Investigator's decision on behalf of the Ombudsman