Summary: Miss X complained about how the Council managed her council tax direct debit and communicated with her. The Council was at fault for failing to send Miss X a reminder or final notice when she began accruing arrears without her knowledge. It was also at fault for failing to respond to Miss X’s contact in a timely way and for how it spoke to her on the phone. The faults caused Miss X avoidable distress. To remedy that injustice, the Council will apologise and pay Miss X £100. It will also carry out staff training to prevent the fault occurring again.

The complaint

1. Miss X complained about how the Council managed her council tax direct debit. She said this meant she accrued significant debt which caused financial difficulty and distress. Miss X also complained about the way the Council communicated with her. She said this resulted in further distress.

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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:
• all the information Miss X provided and discussed the complaint with her;
• the Council’s comments about the complaint and the supporting documents it provided; and
• the Council’s policies, relevant law and guidance and the Ombudsman's guidance on remedies.
5. Miss X and the organisation 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

Relevant law and guidance

6. The council tax bill for the year is due on 1 April. A council will usually collect payment through monthly instalments. If a person misses a council tax payment, the council must issue a reminder notice (at least seven days after the missed payment). If the person does not pay the arrears, the balance for the full year becomes due. This is known as a final notice. The council can then apply to the Magistrates Court for a liability order to recover the unpaid tax, usually by passing it to enforcement agents (bailiffs).
7. People with low incomes are eligible for council tax reduction which covers up to 100% of their council tax. If a person’s income changes, the amount of council tax reduction they receive may change also.
8. We issue good administrative practice guidance that sets out the standards we expect councils to follow. This includes, under the heading ‘being service-user focused’, telling service users what they can expect and what the organisation expects of them. It also expects councils to deal with people helpfully, promptly and sensitively, taking account of their individual circumstances.

What happened

9. Miss X set up a direct debit to pay her council tax in early 2020.
10. The Council received a notification that the direct debit had been cancelled by Miss X in late March. Miss X disputes she cancelled the order. She began accruing arrears (debt).
11. For the remainder of 2020, the Council issued many bills to Miss X. This was because Miss X’s income was changing repeatedly. Each time it changed, the Council recalculated how much council tax reduction she received. The Council added the debt to Miss X’s monthly payments. Because it did this, the Council's computer system did not register any arrears. As a result, Miss X’s case did not progress to the issuing of reminders and a final notice.
12. In March 2021, the Council issued an annual bill for the financial year 2021/2022. It did not send any other bills in that period because Miss X’s income had stabilised. In March 2022, the Council issued an annual bill covering 2022/2023.
13. In May 2022 Miss X became aware she had not been making payments since March 2020 when she logged into her council tax account.
14. She contacted the Council, who confirmed she had cancelled the direct debit and now owed £485.62.
15. Miss X disputed this in July 2022 and asked why the Council had not alerted her to the debt sooner. She chased the Council for a response in mid-October. Finally, she called the Council three times in mid-November.
16. Records of all three phone calls show Miss X was confused about how the direct debit had been cancelled and was seeking more information.
17. In the second call, the call handler challenged Miss X for not noticing the debit had not been made for over two years. Miss X became distressed and explained this was because of her disabilities which meant she relied on the direct debits working to manage her finances. She said the issue was having a significant impact on her mental health. The call handler responded in a particularly insensitive manner. The handler then suggested Miss X speak to a manager, after which the call was disconnected. The Council did not call Miss X back.
18. In the third call, Miss X was again distressed and said she would empty her savings the following day to clear the debt. The call handler suggested Miss X may be able to agree to a payment plan but Miss X said she wanted to resolve the issue and would pay it all.
19. Miss X then complained to the Council. She said:
• the Council had not sent her any bills between March 2021 and March 2022 and as a result, she owed a large sum; and
• the call handlers treated her with contempt.
20. The Council responded to say:
• the bills it sent Miss X after she cancelled the direct debit in March 2020 all stated she was on a cash payment system rather than a direct debit. This should have alerted her to the fact the direct debit had stopped;
• it had reviewed recordings of her phone calls. It was “sorry that [Miss X] felt that there was a lack of empathy”. It was also sorry someone had not called her back after the call was disconnected; and
• she should pay each monthly instalment of Council tax and as much of the debt as possible each month. Once she received the 2023/2024 Council tax bill, the Council would redistribute any remaining tax over the twelve months. Otherwise, if Miss X could not afford to pay the monthly instalments, she should pay as much as possible and contact the Council once she received a recovery notice.
21. Miss X escalated her complaint and the Council responded to say in part that it was sorry for responding to her contact slowly and for failing to address all the points she raised.
22. Miss X cleared the debt in January 2023 but said it caused her financial difficulty.

Findings

Direct debit cancellation

23. Miss X disputes that she cancelled her direct debit in March 2020. The Council's system shows it received a notification the direct debit had been cancelled. It is evident something caused the direct debit to be cancelled at Miss X’s end, but I cannot say what the exact cause was. I am satisfied Miss X did not knowingly cancel the direct debit. The Council was not at fault for cancelling the direct debit.

Bills and reminders

24. Due to her disability, Miss X relies on direct debits to manage her finances. She therefore did not notice the direct debit had stopped and payments were not leaving her bank account. She did not understand that the reference to cash on the bills she received meant the direct debit had stopped.
25. The Council did not send Miss X any reminders or final notices. Initially, this was because the Council was issuing numerous new bills in response to Miss X’s changing income. In those bills, the debt was divided among Miss X’s monthly payments and did not register as arrears on the Council's system. That was not fault.
26. From March 2021 Miss X’s income stabilised. The Council therefore did not send any bills beyond the annual bill. That is normal practice and not fault. However, Miss X continued to accrue debt. At that point, the Council should have sent her reminders or a final notice. Its failure to do so was fault because it did not give Miss X clear information about expectations. This fault meant Miss X was not alerted to her debt until May 2022, by which time she owed over £400. This caused her distress.
27. When Miss X contacted the Council to discuss the debt, it offered her a payment plan and later suggested she pay as much of the debt as she could afford each month and it would spread the remaining debt out over 12 months. These were suitable offers to allow Miss X to pay the arrears off with as little difficulty as possible. The Council made these offers when it could, instead, have issued Miss X a new final notice and demanded she pay the full amount for the year within seven days.
28. The Council's offers were suitable to remedy most of the injustice Miss X experienced as a result of its fault. However, I consider it should also apologise and have made a recommendation to that effect below.

Communication

29. In its complaint responses the Council accepted it had not responded to Miss X’s contact quickly enough and that its call handler should have called her back after the phone line dropped. This was fault and caused Miss X distress. I welcome the apology the Council has already offered.
30. However, one of Miss X’s concerns was that the call handlers lacked empathy with her. My review of the phone calls shows one of the calls was poor. It did not follow the service-user focused approach we expect. It did not deal with Miss X helpfully or sensitively. The call handler was dismissive and minimised Miss X’s evident distress. I am therefore disappointed the Council's response to Miss X’s complaint said only that it was sorry she felt its call handlers were not considerate. The Ombudsman expects apologies to show the organisation has taken responsibility for its failings. The Council's apology does not do this, which was fault. This caused Miss X further distress.

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Agreed action

31. Within one month of the date of my final decision, the Council should apologise to Miss X for the distress she experienced as a result of its failure to:
• issue timely reminders and final notices; and
• make a meaningful and effective apology about its call handler’s response to her phone call.
32. The Council may want to refer to the Ombudsman's Guidance on Remedies in preparing its apology. The guidance sets out the standards we expect councils to meet.
33. The Council should also pay Miss X £100 in recognition of the distress she experienced because of its failure to communicate effectively with her.
34. Within three months of the date of my final decision, the Council should:
• review why it did not issue reminders or final notices to Miss X from March 2021 onwards. If the Council identifies failings in its systems, it should draw up an action plan to rectify them; and
• remind staff they should respond to contact from members of the public without delay. People should not be forced to submit a complaint to get an answer.
35. The Council should provide us with evidence it has complied with the above actions.

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Final decision

36. I have completed my investigation. I have found fault leading to personal injustice. I have recommended action to remedy that injustice and prevent reoccurrence of this fault.

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Investigator's decision on behalf of the Ombudsman