Summary: Ms B complained that the Council incorrectly used an attachment of earnings to recover council tax arrears directly from her wages when she was making payments in accordance with an agreed arrangement. It also delayed in responding to her complaint. We found fault with the Council’s actions. It has agreed to pay Ms B £250 and improve the operation of its complaints procedure.

The complaint

1. Ms B complained that Sandwell Metropolitan Borough Council (the Council) issued an Attachment of Earnings Order (AOE) even though she was keeping to a payment plan. She also says the deductions continued after the Council said they would stop. This caused her financial hardship and distress along with time and trouble pursuing the complaint.

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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 have considered the complaint and the documents provided by the complainant, the comments and documents the Council provided. Ms B and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Council tax recovery

5. 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).
6. 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.
7. 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. The council can decide which recovery method it wishes to use but it can only use one method for one liability order at one time.

Council complaints procedure

8. The Council says it will acknowledge stage one complaints within three days and respond to them within ten working days or ask for an extension. In respect of stage two complaints, it will acknowledge them within three days and respond in twenty working days.

What happened

9. Ms B was in arrears with her council tax bill for 2021/22. In March 2022 the Council obtained a liability order for £437 (the outstanding amount plus costs). On 6 April 2022 Ms B agreed a payment plan to clear the debt over ten months. The first payment of £39.73 was due on 4 May 2022 and subsequent payments of £39.71 until 4 March 2023.
10. On 3 May 2022 Ms B paid £40. On 27 May 2022 the Council sent her a letter saying it was setting up an AOE because she was behind with the payment arrangement.
11. On 31 May 2022 Ms B paid another £40. On 6 June 2022 she made a complaint, questioning why the Council was setting up an AOE as she had made payments in accordance with the arrangement.
12. The Council did not reply but received £136.78 from the AOE on 28 June 2022. Ms B chased up the Council on 4 July 2022 asking for a response to her complaint.
13. On 1 August 2022 the Council sent a request to Ms B’s employer to cancel the AOE. On 5 August 2022 the Council received a further £143.74.
14. On 11 August 2022 the Council responded to her complaint. It said she had not made payments in accordance with the payment plan and neither had she kept up with the current year’s bill so the Council was entitled to apply for an AOE. It acknowledged that it had delayed in responding to her complaints so agreed to refund the payments collected under the AOE.
15. At the end of August 2022 Ms B escalated her complaint to stage two. The Council responded in September 2022. It upheld its previous response and said Ms B had not paid in accordance with the agreed plan.
16. Ms B complained to us and in response to our initial enquiries the Council said on 3 November 2022:

Unfortunately, the 3rd of May instalment was allocated to the current year instalment and not to the arrears on the account, this showed as a shortfall in the plan at the time. An officer took this as a failure in the arrangement and pushed the account onto an Attachment Of Earnings. Subsequently when checking the account in response to the 6th June complaint, another officer realised the misallocation and corrected it and in turn requested the AOE to be cancelled on the 1st August.

Analysis

17. Ms B paid her first two instalments in accordance with the agreed payment plan. The Council allocated the first payment incorrectly to the current year’s bill. It then said she was behind with the payment arrangement and set up an AOE. This was fault as Miss B had paid in accordance with the agreed arrangement. She was caused confusion and financial hardship by the AOE along with some embarrassment as her employer was now aware of her debt.
18. The Council exacerbated the situation by failing to acknowledge or respond to her complaint for over two months. It then compounded her distress by wrongly saying in both the stage one and stage two responses that she had not kept to the payment plan. This was further fault.
19. It did not admit until November 2022, after our involvement, that the Council had actually allocated the first payment to the wrong account. I do not agree with its view that it noted the error when responding to the 6 June complaint because it did not say so in either the stage one or stage two response. This was further fault which caused Ms B more time and trouble and frustration.
20. If it had properly investigated her complaint and responded to her within ten working days, it could have stopped the AOE at a much earlier point and probably prevented any payments being taken from Ms B’s wages.

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Agreed action

21. In recognition of the injustice caused to Ms B, I recommended the Council within one month of my final decision:
• pays Ms B £250 (not to be offset against the outstanding council tax without Ms B’s agreement); and
• considers what steps it can take to improve its procedures to enable the Council to respond to complaints in accordance with its published complaints procedure.
22. The Council has agreed to my recommendations It should provide us with evidence it has complied with the above actions.

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Final decision

23. I consider this is a proportionate way of putting right the injustice caused to Ms B and I have completed my investigation on this basis.

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Investigator's decision on behalf of the Ombudsman