Summary: Ms X complained about the Council’s actions undertaken to recover her Council Tax. She said she was unfairly charged recovery fees as, although with delay, she paid all her Council Tax instalments in the months they were due. We find fault in the way the Council carried out the Council Tax recovery. The Council accepted our recommendations to remedy the injustice caused to Ms X.

The complaint

1. Ms X complains about the Council’s actions undertaken to recover her Council Tax. She says for the last few years she has been paying her Council Tax instalments at the end of each month and therefore questions legitimacy of the Council’s decision taken in 2021 to proceed with court summons. Ms X claims she could not contact the Council during the recovery which prevented her from attending court hearing and making payment arrangements. She says she cannot afford enforcement fees. She found the enforcement proceedings and lack of possibility to contact the Council by phone distressing.

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The Ombudsman’s role and powers

2. 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)
3. If we are satisfied with an organisation’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

4. I considered the information supplied by Ms X and spoke to her on the telephone. I considered the Council’s response to my enquiries.
5. Ms X and the Council had an opportunity to comment on my draft decision. They accepted my findings.

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What I found

Legal and administrative background

The Council Tax (Administration and Enforcement) Regulations 1992

6. The main legislation concerned with the collection and recovery of council tax is the Council Tax (Administration and Enforcement) Regulations 1992 (the Regulations). Council tax is payable by monthly instalments, usually ten payments from April to January. 
7. By agreement a council may make a special payment arrangement with a taxpayer outside the normal instalment scheme. The Council has discretion to decide what sort of arrangement it will accept. Usually councils look to have the debt cleared by the end of the financial year and where the debt is for a previous year, it will also want to see payment for the current year maintained.
8. Where payments are made which are different from the instalment schedule set out on the bill, council systems will often automatically credit the payments to any arrears on the account on the basis of the oldest debt first.
9. If a council taxpayer fails to pay an instalment, the Council will issue a reminder. If they do not pay within seven days, the Council can issue a summons and apply to the Magistrates’ Court for a liability order. The Magistrates’ Court must grant an order if it believes that a sum is owed and has not been paid.
10. The Regulations only require a council to issue two reminders for each account in any given council tax year. If a third payment is not made by the due date, the Council is entitled to send a final demand for the entire outstanding council tax for that year, removing the right to pay by instalments.
11. A liability order gives a council legal powers to take enforcement action to collect the money owed.

Council Tax Collection – best practice guidance for local authorities

12. Communications with residents should be designed to prompt timely payment from residents who can pay, and early engagement from those who may have difficulties in keeping up with paying the necessary instalments on their bill and may be in broader financial difficulty.
13. Evidence shows that adapting interventions according to a debtor’s circumstances can lead to fairer treatment for residents and faster, more sustainable debt recovery for authorities.
14. Authorities already hold a wealth of evidence which can help them understand a debtor’s profile. This includes their historic payment behaviour, any existing entitlement to council tax support or other council tax discounts, the use of local authority services, and records of any known vulnerabilities, including severe mental impairment.
15. Utilising these data points can help authorities make more suitable choices on how best to engage with residents and what recovery methods to use. It can also lead to identification of eligibility for additional support, exemptions and discounts that could help to prevent further arrears.
16. Where residents fail to respond to a bill, or miss an instalment, the authority will carefully consider the options available to them in their attempt to engage with the individual.

The Ombudsman’s Good Administrative Practice Guidance

17. Being service user-focused is one of the principles of good administration listed in the Ombudsman’s Good Administrative Practice Guidance.
18. To be service-user focused the organisation should:
• Ensure people can access services easily, including those needing reasonable adjustments;
• Deal with people helpfully, promptly and sensitively, taking account of their individual circumstances;
• Respond to service users’ needs flexibly.

Key facts

Background

19. From 2014 Ms X has been paying her Council Tax by cash in 10 monthly instalments.
20. Ms X’s last recorded telephone contact with the Council was in June 2016, when she asked for a copy of her council tax bill.
21. In July 2019 Ms X asked in an email for her Council Tax payment date to be changed from 5th to 26th of each month, with the start date in August 2019.
22. In response to this correspondence the Council advised, also by email, all Council Tax cash payments are due on 5th of each month. Residents paying via direct debit can choose one of four payment dates. The Council attached a direct debit form in case Ms X wished to use this form of payment.
23. Despite this correspondence, from the end of August 2019 Ms X started making Council Tax payments at the end of each month. Dates of the payments ranged from 22nd of the month to 29th of the month.
24. In November and December 2020 Ms X received two reminder letters. The Council did not proceed with the recovery action following this correspondence.
25. In March 2021 the Council issued a new Council Tax bill for Ms X for the tax year 2021-2022.
26. Ms X continued paying her Council Tax instalments at the end of each month.

Recovery actions before the enforcement stage

27. On 26 April 2021 the Council sent Ms X its first reminder for the April payment. Ms X made a payment for the April instalment on 27 April 2021.
28. On 14 May 2021 the Council sent Ms X its second reminder for the May payment. Ms X made a payment for the May instalment on 26 May 2021.
29. In July 2021 the Council sent Ms X a final notice asking for the payment of the remaining full sum from the Council Tax bill for the year 2021/2022.
30. On 25 August 2021 the Court issued its summons for Ms X setting a virtual court hearing for 16 September 2021. It included advice what to do to avoid further costs. The Court encouraged Ms X to call the Council to make a payment, set up an arrangement or discuss her account. She was also advised her attendance at the virtual court hearing would not be necessary, instead she should call the Council.
31. Issuing the court summons incurred a fee of £117.50, which was added to Ms X’s account.
32. Once Ms X received the Council Tax summons, for several days she tried to call the Council to avoid further recovery actions. After calling the Council’s number she was advised of her place in the queue. Each time, after at least an hour of waiting, the call was cut off.
33. On 26 August 2021 Ms X sent an email to the Council, questioning the reasons for issuing the court summons for her. She explained for the last two years she had been paying her tax instalments at the end of each month, which agreed with the pay cycle in her new job. She asked for the Council to review her account and withdraw the summons. Ms X also asked for the Council to contact her without delay.
34. After many further unsuccessful tries to contact the Council by phone, on 3 September 2021 Ms X asked the Council in the email that she might attend the court hearing remotely.
35. On 13 September 2021 the Council responded to Ms X’s email of 26 August apologising for the delay and explaining the summons were correctly issued following the final notice sent to Ms X. It advised Ms X to contact the office by phone to set up a repayment arrangement to avoid further recovery action and fees.
36. At the hearing on 16 September 2021, which Ms X did not attend, the court issued a liability order with the fee of £15.00.
37. On 20 September 2021 the Council passed the liability order to the enforcement agents (bailiffs).

Enforcement

38. On three occasions bailiffs came to Ms X’s house – twice she refused to open the door and the bailiffs said they would take away her car. They advised her to call the Council. Ms X tried but could not get through. Third time when the bailiffs came Ms X was not at home and they talked to her neighbours.
39. The enforcement agents charged Ms X with the compliance fee of £75, enforcement fee of £235 and uplift fee for debts over £1500 of £12.51.
40. Ms X continued paying her Council Tax instalments at the end of each month and the only outstanding fees on her account for the tax year 2021/2022 are now recovery and enforcement fees.

Complaint

41. On 24 September 2021 Ms X lodged her complaint against the Council.
42. In its Stage 1 complaint response the Council explained the rules applying to Council Tax payments when paid by cash or by direct debit. The Council reviewed Ms X’s Council Tax account and provided details of the communication with Ms X about her Council Tax. The Council did not accept any faults in the way it carried out Ms X’s Council Tax recovery.
43. When addressing Ms X’s claims of her inability to contact the Council by phone, the Council explained its Council Tax department had been experiencing high volume of calls which caused the residents to experience long waiting times.
44. Following Ms X’s Stage 2 complaint the Council confirmed its position on allocating Council Tax instalments across the year. It explained the Council carried out the recovery process correctly. Ms X’s attendance at the court hearing was not compulsory and as, based on her correspondence to the Council, she did not have valid reasons to challenge the court summons, the Court would have issued a liability order even if she had been present.

Analysis

No fault

45. I find no fault in the Council’s actions until and including issuing of the court summons for Ms X’s unpaid Council Tax.
46. The Council followed the Regulation when charging Ms X’s instalments and splitting them into 10, rather than 12, payments.
47. The Council advised Ms X in summer 2019 the payment date was 5th of each month if she paid her Council Tax instalments by cash. She also received information on the benefits of paying by direct debit.
48. As Ms X paid her Council Tax instalments with delay, the Council legitimately started the recovery proceedings by issuing reminder letters. In response to my enquiries the Council explained it uses a system set up to send reminder letters after a minimum of seven days. When building the recovery diary the Council sets dates usually at least nine days from the instalment date.
49. According to the Regulations the Council did not have to send a final notice letter to Ms X.
50. The issuing of the court summons complied with the Regulations.

Fault

51. Unavailability of the Council’s phone services.
• In the court summons letter telephone contact with the Council is suggested as the best way to try to resolve the matter and avoid further costs. In the letter of 13 September 2021 the Council only pointed to telephone communication as the way to prevent the matter from escalating. Despite many tries Ms X could not use this method of contact, which is fault.
• On the review of the evidence of this complaint and following my conversation with Ms X it seems the telephone contact is her preferred way of communication. At times Ms X found written communication confusing. One example of her difficulties is that, despite specific information in the court summons on the court hearing being held virtually, Ms X was convinced the court would hold the hearing in person and applied to the Council to attend remotely.
52. Lack of individual approach to find out Ms X’s profile.
• Ms X never missed payments of her Council Tax instalments. Although from 2019 she has always been paying late, looking at her records it is obvious she never intended to fail in her duty to pay the local tax. Failure to look at her overall profile as a Council Tax payer is fault.
• Considering Ms X’s confusion with the written communication, it is very likely that some support from the Council at the beginning of the recovery process would allow Ms X to make arrangements to pay her Council Tax without incurring extra costs.
53. Lack of timely communication. The Council failed to promptly respond to Ms X email of 26 August 2021. Only after her second email of 3 September 2021, the Council responded to the one from August 2021. We do not have any evidence of its response to the one sent in the beginning of September. Considering Ms X’s sent her emails after receiving the court summons and with no possibility of reaching the Council on the phone, such delay and lack of responsiveness are unacceptable. This is fault.

Injustice

54. The Council’s faults caused Ms X financial hardship. As she could not make arrangements for payments, she incurred extra costs of the enforcement proceedings, totalling £337.51.
55. Ms X spent a long time trying to call the Council. Each time, after a long wait of an hour or more, her call was cut off. This was very frustrating.
56. Ms X experienced prolonged distress when she realised she owed the Council extra enforcement fees as well as her Council Tax payments.
57. Ms X’s distress was increased by the fact that in the past she also received two consecutive reminder letters which did not lead to recovery and enforcement proceedings. Therefore, after she received reminder letters in 2021 and despite their content, she assumed the Council would continue accepting her late payments.
58. The enforcement proceedings, and in particular bailiffs’ visits, caused Ms X high levels of distress. She also felt humiliated in front of her neighbours.

Remedies

59. To remedy Ms X’s financial hardship caused by the Council’s fault, she should be refunded the enforcement fees, which could have been avoided if not for the Council’s fault. This is £337.51.
60. To find out the payment Ms X’s should receive from the Council in recognition of her distress I considered she has never missed any Council Tax payment and obviously has been trying to keep her account in credit by making small extra payments each month. She lives from month to month with no extra cash. For many months Ms X has been very upset by the prospect of being charged additional enforcement fees which she can’t afford.

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Agreed action

61. To remedy the injustice caused to Ms X by the faults identified, I recommend the Council complete the following:
• apologise to Ms X for the injustice caused by the faults identified;
• make financial payment of £337.51 directly to the enforcement agents to cover enforcement fees incurred by Ms X;
• make financial payment of £250 to recognise Ms X’s distress;
• offer Ms X a telephone consultation to explain how to proceed to pay off all the outstanding sums on her Council Tax account. During this telephone call the Council officer will also explain once again the Council Tax rules and options for payments and consider with Ms X the best option for her. The details of this call will be recorded in writing.

The Council will complete the above within four weeks of the final decision.

62. I also recommend the Council review its customer telephone service to identify whether the service is appropriately staffed. If the review identifies the service is not appropriately staffed, and it is preventing residents from being able to contact the Council through the telephone, the Council will decide on an action plan to improve the service to ensure residents can contact the Council through the phone. The Council will outline the actions to take and the timescales for implementation. The Council will provide the Ombudsman with a copy of its review and action plan (if relevant).

The Council will complete the above within three months of the final decision.

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Final decision

63. I find fault in the way the Council carried out recovery of Ms X’s Council Tax. The Council agreed with my recommendations. This completes my investigation.

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Investigator's decision on behalf of the Ombudsman