Summary: Mrs X complained there was fault in the way the Council calculated her council tax and communicated with her. I found there was no fault in the actions taken to recover arrears. There was fault in the way the Council initially responded to Mrs X’s complaint, but the Council apologised and rectified this in later correspondence. I found no fault that warranted a remedy for Mrs X.

The complaint

1. Mrs X complains the Council made mistakes in the calculation of her council tax liability, did not properly explain changes they made and did not send notifications and reminders that they stated they did. Mrs X also complained the Council failed to communicate with her in a professional and civilised way because it deferred her queries to bailiffs.

Back to top

The Ombudsman’s role and powers

2. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word fault to refer to these. We consider whether there was fault in the way an organisation made its decision. If there was no fault in the decision making, we cannot question the outcome. (Local Government Act 1974, section 34(3), 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)

Back to top

How I considered this complaint

4. I spoke to Mrs X and considered the information she provided. I asked the Council for information and considered its response to the complaint.
5. Mrs X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

Back to top

What I found

Council Tax – Recovery of Arrears

6. The Council Tax (Administration and Enforcement) Regulations 1992 cover the way councils collect payments and how they can recover council tax debts.
7. The council tax bill is due on 1 April. A council will usually collect payment through monthly instalments. If any instalment is missed the council will send 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). A council will issue reminders, but if it does not receive the payments required it can apply to the Magistrates Court for a liability order.
8. A liability order gives a council the legal power to take enforcement action to collect the money owed. This can include taking deductions from benefits, an attachment of earnings (deductions taken directly from someone’s earnings) or using bailiffs. The Council can decide which recovery method it wishes to use.

Guidance on enforcement of Council Tax arrears

9. In 2013 the government issued guidance for local authorities about collection of council tax arrears.
10. Section 3.5 states “A Local Authority should take all reasonable steps to exhaust other options available to them prior to obtaining a liability order. Once a liability order has been granted a Local Authority should explore other enforcement options which are available to them, such as direct deductions from benefit or an attachment of earnings order.”

What happened

11. On 9 January 2020 the Council issued a final notice to Mrs X for council tax arrears of £291.51 for 2019-20.
12. The Council issued a bill to Mrs X for 2020-21 council tax on 5 March 2020. In addition to setting out the council tax due for the year, it stated that Mrs X had arrears from previous years which were subject to recovery action.
13. The Council responded to a query from Miss X in March 2020. The Council wrote to her stating that there had been change in her council tax support entitlement. This affected the council tax due. The Council stated “Just to advise that we have not received any payment from you since 3/1/20. You still owe £244.17 for council tax 2019/2020 and there is an amount of £291.51 for the previous year 2018/2019. Please contact us to discuss a payment arrangement to clear these debts”.
14. Mrs X has no facility to pay council tax by direct debit. Because of the lockdown caused by the COVID-19 pandemic, Mrs X called the Council to say she would not be able to make payments. She says the council officer she spoke to told her to make payments as soon as she was able to.
15. Due to the COVID-19 pandemic, the Council stopped issuing summons or taking court action to recover debts between the end of February 2020 and early November 2020. During this period, it continued to send reminders and bills.
16. The Council issued a final notice for 2018-2019 arrears of £244.17 on 8 December 2020. The total of the arrears from 2018-19 and 2019-20 was £535.68.
17. Mrs X says she started making council tax payments in December 2020 at the post office. She paid £132.00 on 8 December, £132.00 on 17 December, £132.00 on 13 January 2021, £132.00 on 13 February 2021.
18. Mrs X made a further payment of £122.00 on 5 April 2021.
19. The payments Mrs X made between December 2020 and April 2021 totalled £650.00. Mrs X believed they were being used to pay her 2020-21 council tax. However, it is now clear that the first £535.68 was used to clear the arrears from previous years. This left only £114.32 towards 2020-2021 Council tax.
20. I note the amounts due for 2018-19 and 2019-20 were increased after the initial bill was issued because Mrs X lost her Single Person Discount for each of these years.
21. The Council send a reminder letter to Mrs X on 18 March 2021 explaining she was in arrears. It provided a copy of this.
22. On 20 April 2021 the Council obtained a summons for unpaid council tax of £544.12 for 2020-21. This added £115 of summons costs, increasing the amount due to £659.12.
23. In late June 2021 Mrs X paid £100.
24. The Council told us that in total it issued 11 bills to Mrs X for 2020-21. This was because there were many changes to her Council Tax Support entitlement. The Council provided a copy of its records indicating the 11 council tax demands were sent.
25. The bill issued on 29 June 2021 set out what was due for 2020-21 and showed payments of £214.32 had been made towards 2020-2021 council tax.
26. On 5 July 2021 Mrs X received a letter from bailiffs pursuing a council tax debt of £969.12. She was shocked as she had been making council tax payments. When she called the Council they referred her to the bailiffs.
27. On 6 July 2021 Mrs X borrowed money from friends and paid the full outstanding sum. However, she then wrote to the Council to challenge the outstanding amount and question what happened. Mrs X questioned why a debt from 2014 had been referred to by bailiffs.
28. In response to Mrs X’s initial complaint the Council stated she was liable for council tax of £658.44 for 2020/21. This figure took account of a Council Tax Reduction benefit she was entitled to. The Council stated there were no debts from 2012-2019 because Mrs X’s council tax had either been paid by Council Tax Reduction benefit, or paid by Mrs X.
29. The Council stated a demand notice had been sent on 22 February 2021 stating that £658.44 was due and a reminder was issued on 18 March 2021. It stated a payment of £114.32 was received on 15 April which reduced the outstanding balance to £544.12, but as no further payments were received, the Council issued a summons and obtained a liability order to enable it to recover the debt.
30. When the account was passed to bailiffs, they wrote to Mrs X, which incurred a fee of £75. When they received no reply they visited her, incurring a further fee of £235. So, the £310 of bailiff fees added to the £659.12, resulted in the amount bailiffs were seeking of £969.12. The Council did not refer to payments Mrs X had made from December 2020 to February 2021.
31. Mrs X considered the Council should not have pursued the debt because of the difficulties that the COVID-19 pandemic had caused. She also explained the payments she had made and questioned why these had not been taken into account. As it appeared the Council had made an error, she asked for a full refund.
32. The Council’s final response to Mrs X’s complaint stated it had been wrong to say in its initial response to her complaint that no previous arrears existed. It explained that Mrs X did have arrears. It referred back to the 2020 bill which had stated the debt totalled £535.68. It explained how this was made up. The Council stated final demands for these debts had been sent in 2020. The Council acknowledged that payments had been received from December 2020 to April 2021 but these had been used to repay these older debts, this was why her 2020/2021 council tax account was in arrears. The Council provided a table breaking down how each payment had been used.
33. The Council acknowledged there had been some confusion and partially upheld her complaint because its initial response had been wrong. However, the Council found that its actions in pursuing the debt were correct because Mrs X was aware of the previous arrears and she had not responded to bills or asked the Council for assistance. The Council stated it had been supportive where people had made contact with the Council and it had either agreed to delay payments or delay enforcement action.

Was there fault by the Council

34. Council tax is usually payable in instalments. Council officers do not monitor each account and decide where each payment will go. Rather, a computer system will allocate it automatically. Usually, payments which are exactly equal to instalments, or exact multiples of instalments, will be allocated to the current instalment debt. The Council explained that where amounts do not match, they are automatically used for the oldest debt.
35. Although Mrs X had made payments in 2018-19 and 2019-20, unfortunately she was still in arrears. In Mrs X’s case, the amounts she was paying from late 2020 did not match the amounts due. As a result, the Council allocated them to her historic council tax debts rather than the amounts due for 2020-21. This is not fault.
36. We would expect councils to allocate payments to an account in such a way that will avoid someone falling into further debt and being exposed to further costs. I have considered whether the Council’s approach here led to avoidable additional recovery costs. i.e. if the approach meant that Mrs X incurred extra recovery costs for both her historic debts and her 2020 arrears. I found that this was not the case. Although the Council had issued final notices to Mrs X for arrears in 2018-19 and 2019-20, it had not gone on to issue a summons or obtain a liability order. So, no excessive recovery costs had been charged.
37. I found the Council had issued bills and reminders to Mrs X showing the amounts due. I cannot reach a view about what was said to Mrs X on the telephone in March 2020 when she spoke to an officer. She says they advised her to make payments when possible. Although no timescale appears to have been agreed, the Council suspended taking formal recovery action during the height of the COVID-19 pandemic. As it did not pursue any recovery action until December, it had allowed time for Mrs X to make payments as and when she could. Once an account is with bailiffs it is not fault for a council to refer someone to them to deal with queries about repayment.
38. I recognise Mrs X was confused about why the Council took recovery action while she was continuing to make payments. However, given Mrs X was in arrears, this was action the Council was entitled to take. The amounts Mrs X paid did not cover the 2020 council tax as well as the arrears from previous years.
39. The Council’s initial complaint response wrongly stated that Mrs X had no prior arrears and the debt was from 2020 only. The original response amounts to fault by the Council. However, it apologised for this and corrected the situation when sending its final response on Mrs X’s complaint. The final response explained how it allocated the payments Mrs X had made. The Council provided a further breakdown in response to our enquiries which I have shared with Mrs X.

Back to top

Final decision

40. There was no fault in the actions the Council took to recover council tax arrears. There was fault in the way the Council initially responded to Mrs X’s complaint but the Council apologised and rectified this. As a result, I have completed my investigation and closed my file.

Back to top

Investigator's decision on behalf of the Ombudsman