Summary: Ms X complained the Council changed the amount she needed to pay towards Council Tax each month. Ms X says the Council’s changes resulted in it failing to take direct debit payments causing an accrual of a large balance. Ms X complained the Council would not allow her to pay off this balance in instalments. We found fault with the Council failing to signpost Ms X to its discretionary Council Tax support or relief services and for failing to consider a discretionary payment arrangement. While we found fault, this fault did not cause a significant personal injustice to Ms X.

The complaint

1. Ms X complained the Council sent monthly letters changing the amount she needed to pay for Council Tax. In each instance, the Council pushed back the payment date to the following month. Ms X says this resulted in a balance owed of £350.83 in March 2023.
2. Ms X complained the Council would not allow her to pay this balance in instalments and demanded payment within seven days. Ms X says this caused her stress and distress and caused her financial hardship by needing to use a credit card to pay off the debt.

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The Ombudsman’s role and powers

3. 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)
4. 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)
5. The law says we cannot normally investigate a complaint when someone can appeal to a tribunal about the same matter. However, we may decide to investigate if we consider it would be unreasonable to expect the person to appeal. (Local Government Act 1974, section 26(6)(a), as amended)
6. The Valuation Tribunal deals with appeals against decisions on council tax liability and council tax support or reduction.
7. 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

8. I have considered all the information Ms X provided. I have also asked the Council questions and requested information, and in turn have considered the Council’s response.
9. Ms X and the Council had opportunity to comment on my draft decision before I made my final decision.

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What I found

Council Tax liability and billing

10. Council tax is a combination a tax on the value of property and a tax on individuals living in the property.
11. The occupier or owner is liable to pay Council Tax. An occupier with a freehold or leasehold interest in the property is the primary person responsible for Council Tax. This is followed by an occupier with no interest and then ultimately the owner of the property. (Local Government Finance Act 1992, section 6(2))
12. The Council Tax (Administration and Enforcement) Regulations 1992 SI 613 covers both the way councils collect payments of council tax and the way councils can recover council tax debt.
13. The council tax bill for the year is due on the 1st April. Councils have discretion to decide when instalments will be payable but it can only request one instalment in any month. Any decision on payment instalments must be taken before the start of the tax year and cannot be changed during the year.
14. By agreement a council and a taxpayer may make a special arrangement outside the normal instalment scheme.

Council Tax collection

15. Councils will usually collect payment through ten or twelve monthly instalments. If any instalment is missed the Council will send a reminder to the resident. If a payment is still not made or a further payment missed then the entire outstanding balance will be due (i.e. the full amount for the rest of the year).
16. In order to use the various powers available to it to recover unpaid council tax, the Council has to apply to the Magistrates Court for a liability order against the person or persons it believes should have paid the bill.
17. Once the Council has obtained a Liability Order it can begin legal recovery action. A liability order obtained through a Magistrates Court is not the same as a County Court judgement and so is unlikely to affect a person’s credit rating score. 

Council Tax reduction schemes

18. From 1 April 2013 council tax benefit was replaced by council tax reduction schemes (also known as council tax support). Each council in England has its own scheme setting out who is entitled to a reduction in their annual council tax bill.
19. In exceptional circumstances, councils can effectively waive some or all of a council tax liability or debt, by using their discretionary powers under S13A(1)(c) of the Local Government Finance Act 1992 (as amended).
20. Under Section 13A(2) a Council must have a discretionary scheme available. A Taxpayer can appeal for a discretionary discount and the Council should have some mechanism to consider such requests, with criteria against which they are judged. The Council's decision to grant or refuse a discretionary discount is appealable to the Valuation Tribunal.

What happened

21. In March 2022, the Council issued Ms X’s Council Tax bill for the forthcoming year. This bill detailed her total charges, discounts and set out a payment schedule for the forthcoming year.
22. In April 2022, the Department for Work and Pensions (DWP) told the Council Ms X’s income had changed. This prompted the Council to change Ms X’s entitlement to Council Tax Support and issue a revised Council Tax bill to Ms X. The revised Council Tax bill pushed the payment schedule back to the next instalment. The Council took its first payment towards Ms X’s Council Tax in May 2022.
23. Further information from the DWP about changes to Ms X’s income in June and July 2022 prompted changes to her Council Tax Support. Following a series of rebills the Council took payment in August 2022 and September 2022. In both instances, the Council had increased the monthly direct debit to reflect the shortened time for payment.
24. From October 2022 to March 2023, the DWP told the Council about changes to Ms X’s income every month. On 16 March 2023, the Council issued a final Council Tax bill to Ms X detailed a balance outstanding of £350.83 for the past financial year asking for payment by 31 March 2023.
25. Ms X contacted the Council on 23 March 2023 about the Council Tax bill. The Council discussed the bill with Ms X and explained why the balance had accumulated. Ms X advised she would pay with her credit card and pay it off monthly. Ms X made a formal complaint to the Council on this date expressing concerns about the Council not taking payment throughout the year. Ms X said she asked the Council to make a payment arrangement for the balance but it rejected this.
26. The Council provided its Stage 1 complaint response to Ms X on 11 April 2023. The Council said:
• Ms X received Council Tax Support and her earnings had changed throughout 2022 which affected her Council Tax Support entitlement.
• Because of the changes to Ms X’s Council Tax Support it needed to rebill her Council Tax account each month there was a change. The change in billing caused a change in the payment schedule, pushing back the payment date to the next month.
• When it produced the Council Tax bill in March 2023, the financial year was over so payment of the outstanding balance of £350.83 became payable in full.
• It must act in line with the Council Tax Administration and Enforcement Regulations 1992 and give a person 14 days’ notice of any changes in payment in line with an instalment plan. This is the reason payment kept being pushed back.
• Ms X had not paid towards her Council Tax since September 2022, through no fault of her own.
• Ms X’s Council Tax billing would be impacted by the same issues in the year 2023 to 2024 and advised her to cancel the direct debit and pay on receiving the bill instead.
• It could not offer a payment arrangement to Ms X because it had reached the end of the financial year and it could only offer a payment arrangement once it had issued a summons as part of its recovery process.
27. Ms X responded to the Council on the same date seeking consideration of her complaint at Stage 2 of its process. Ms X said she had no choice but to pay the full balance and complained the Council did not give her 14 days to settle the final balance but instead only allowed her seven days.
28. The Council provided its Stage 2 complaint response on 3 May 2023. The Council said its response in the Stage 1 complaint response was correct. The Council said the new information each month from the DWP necessitated a revision of Ms X’s Council Tax bill requiring a 14-day billing notice. The Council said it must adhere to the regulations in following this process. The Council explained the same situation will occur this financial year with it not taking the direct because of bill revisions. The Council advised Ms X to make monthly payments based on the monthly revised bills or set money aside.

Analysis

Billing for Council Tax

29. Ms X complained the Council changed the amount she needed to pay towards Council Tax each month.
30. Before the start of the 2022 to 2023 financial year, the Council wrote to Ms X to explain what each of her monthly payments for Council Tax would be for the forthcoming year. The Council calculated this based on her Council Tax band against the level of Council Tax Support she received. The Council calculated her Council Tax Support from the information it held about her income from the DWP. The Council calculated Ms X’s monthly Council Tax payments correctly and I do not find fault.
31. In April 2022, the DWP contacted the Council to advise Ms X’s income through her Universal Credit had changed. The Council was obliged to change Ms X’s Council Tax Support level to coincide with the change to her income. The change to Ms X’s Council Tax Support in turn caused a change to the Council Tax billing and monthly instalments. The Council needed to rebill Ms X based on the new information and I do not find fault with the Council for issuing a rebill.
32. A council must provide a person with suitable notice about any changes to an instalment plan. Had the Council taken payment in the same month it changed the instalment plan, this would not have been sufficient notice. Doing so, would have been fault. The only option available to the Council was to push back the payment date to the next month. This ensured Ms X received suitable notice of the changes to her Council Tax instalment plan. I do not find fault with this.
33. The DWP told the Council about changes to Ms X’s income at various stages in 2022 and 2023 following this first contact in April 2022. This caused a repeat of the Council’s need to rebill and push back payment on various occasions. This caused the Council to take sporadic payments through the direct debit. The Council had to follow the regulations and its policies and in doing so had to push back the instalment plan on each occasion. While the result of this was a large outstanding bill at the end of the financial year, I cannot find fault with the Council for the need to repeatedly rebill Ms X.

Discretionary support

34. At the end of the 2022 to 2023 financial year, Ms X owed the Council £350.83 because of the repeated rebilling by the Council.
35. When Ms X contacted the Council about this outstanding balance, the Council failed to direct Ms X to discretionary council tax support or relief. While Ms X may not have received discretionary council tax support or relief, as this can only be decided by the Council, the Council should be signposting a person to this service. Failure to signpost to this service with the Council was fault.
36. Ms X complained the Council failed to offer her a payment arrangement during the telephone conversation on 23 March 2023. In the Council’s Stage 1 complaint response, it told Ms X it would not offer a payment arrangement given it had reached the end of its financial year. The Council has also accepted that it is unlikely it offered a payment arrangement to Ms X.
37. The Council has discretion about when payments towards Council Tax will be payable. A council’s standard approach is to decide on any payment schedule before the start of the tax year but a council can make a special payment arrangement outside the normal instalment scheme should it consider it appropriate. The Council has shown no evidence it considered offering Ms X a special payment arrangement outside the normal instalment scheme. Given that failure to meet the original payment plan was through no fault of Ms X’s, the Council should have at least given consideration to offering a discretionary payment plan. Not doing so was fault.
38. While the Council failed to offer Ms X a payment arrangement, Ms X was able to settle the balance in full with the Council. Ms X says she needed to pay this balance off over several months but has presented no evidence of financial hardship caused by this. Additionally, Ms X was only asked to pay the Council Tax she owed over the course of the year with no extra charges. As such, the Council’s fault did not present a significant personal injustice to Ms X.

Council Tax re-billing mechanism

39. The Council completed a review of its Council Tax Support scheme in 2022, considered by the Council’s Strategic Governance Board before passing this to the Council’s Overview and Scrutiny Committee later in the year.
40. This review, amongst other things, considered an approach to mitigate the issues caused by the need to rebill every month based on fluctuating income. The Council considered two main methods it could look to put in place to prevent the need for repeat rebilling causing the underlying issues detailed in Ms X’s complaint.
41. To date, the Council has not decided what, if either, of these approaches it will take to address this underlying issue. However, the decision about what course of action to take, if any, is a matter for the Council to decide.
42. The Council is following the relevant legislation and guidance and, as such, we cannot find fault. When the Ombudsman cannot find fault it cannot make recommendations for a council to consider a new way of working. The fact the Council has considered potential approaches to resolve this issue demonstrates it has already recognised the issue and is taking proactive measures to address it.

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Final decision

43. I have completed my investigation as the fault by the Council has not led to a significant injustice to Ms X.

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Investigator's decision on behalf of the Ombudsman