Summary: Miss X complained about recovery action the Council took against her for council tax arrears. There was fault in how the Council took recovery action and responded to Miss X’s complaints. This caused her avoidable distress, upset, time and trouble for which the Council agreed to apologise and pay a financial remedy. It will also credit other payments Miss X had made to her account and review its procedures.

The complaint

1. Miss X complains about recovery action the Council has taken against her for council tax arrears since 2021. She says the Council:
• failed to credit her accounts with payments made from her benefits; and
• should not have used bailiffs to collect the debt or threatened her with prison.
2. Miss X says the Council’s actions have caused her significant fear, distress and frustration. She wants the Council to apologise, apply the payments she had made to the debt she owes and properly recognise the impact it actions has had.

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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 significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. The Local Government Act 1974 sets out our powers but also imposes restrictions on what we can investigate. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
5. 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

6. I considered the information Miss X provided and discussed the complaint with her.
7. I also considered the Council’s comments on the complaint and the supporting information it provided.
8. Miss X and the Council had an opportunity to comment on my draft decision. I considered any comments I received before making a final decision.

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What I found

Council tax recovery

9. The Council Tax (Administration and Enforcement) Regulations 1992 cover both the way councils collect payments of council tax and the way councils can recover council tax debt. The Tribunals, Courts and Enforcement Act 2007 and associated regulations cover the way enforcement agents may recover debts.
10. The council tax bill for the year is due on 1 April. A council will usually collect payment through monthly instalments. If the liable person misses any instalment, the council will send them 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).
11. To use the various powers available to it to recover unpaid council tax, a council must apply to a magistrate’s court for a liability order against those it believes are liable. Once a council has a liability order it can take recovery action.
12. A liability order gives a council the legal power to take enforcement action to collect the council tax and court costs owed. The most commonly used powers are asking for deductions from benefits, getting an attachment of earnings (this means deductions are taken directly from earnings by an employer and passed to the council) or using enforcement agents. The council can decide which recovery method to use but it can only use one method for one liability order at one time.

Background and events before 2021

13. Miss X used to live in the Council’s area. While living there, Miss X accrued some council tax arrears.
14. The Council applied for two liability orders for Miss X’s outstanding council tax; one in 2011 and another in 2013.
15. Mrs X moved out of the Council’s area in early 2022.

What happened

16. In June 2021 the Council asked the Department for Work and Pensions (DWP) to make deductions from Miss X’s benefits to repay her council tax debt. These deductions started in July 2021.
17. The Council applied the payments it received from the DWP to the 2011 liability order and placed a hold on any further enforcement action for the 2013 liability order, until the earlier debt had been repaid.
18. The deductions from Miss X’s benefits continued until April 2022, when the DWP stopped them.
19. In August 2022 the Council wrote to Miss X about the outstanding debts. The letter included the title “pre-committal letter” and told Miss X the Council could take other enforcement action if she did not arrange payments with the Council.
20. Miss X asked the Council about this letter the following month. She told the Council that deductions should be made from her benefits and she did not know why these had stopped. The Council said it sent a new request to DWP for the deductions to restart.
21. The deductions had not restarted by January 2023, so the Council sent Miss X’s accounts to enforcement agents who contacted Miss X about the debts.
22. In April 2023, the DWP began making deductions from Miss X’s benefits again. However, it did not send the first payment to the Council until May.
23. Miss X complained to the Council in late April to explain the deductions had started again but not all the previous deductions had been credited to her account. It appears the Council sent another request for deductions to the DWP around this time.
24. The Council replied to Miss X’s complaint in May 2023. It explained Miss X owed two separate debts and it could take recovery action on the two debts separately. It told Miss X she should come to a payment arrangement with its bailiffs for the 2013 debt.
25. In June 2023, the DWP replied to the Council’s April 2023 request for deductions. It told the Council it could not make deductions as it was already doing so. The Council said, when considering this response, its officer did not check or realise that deductions had restarted in April/May 2023. The Council therefore told Miss X she should still make an arrangement with its enforcement agents. Miss X arranged payments which she paid between June and September 2023.
26. The Council sent Miss X a further letter in July 2023 saying it might consider applying to send her to prison if she did not pay what she owed. Later that month it correctly updated its records that it was receiving deductions for the 2011 liability order. It recalled the 2013 debt from its bailiffs in August 2023 and cancelled the fees the bailiffs had charged.

My findings

27. We can only normally investigate complaints where someone complains to us within 12 months of becoming aware of a problem. In this case, I am satisfied Miss X only became aware of possible problems with the deductions from her benefits stopping in August 2022. Since Miss X complained to us in July 2023, within 12 months of becoming aware of the problem, I have decided to investigate events from the start of the deductions in June 2021.

Recovery action

28. In its response to my enquiries, the Council accepted it should have:
• realised in May 2023 that it was receiving deductions from the DWP in respect of Miss X’s council tax debts;
• responded differently when it received the DWP’s response in June 2023; and
• stopped any further recovery action when the deductions restarted, rather than asking Miss X to make an arrangement with its bailiffs.
29. I agree with the Council’s view on these points and am satisfied these failures were fault.
30. Had this fault not happened, I believe it is likely Miss X would not have:
• received the second letter from the Council in July 2023 which mentioned prison; or
• made arrangement to pay the Council’s bailiffs while the DWP was making deductions from her benefits.
31. Both these caused Miss X avoidable distress and upset, along with some financial strain. The Council offered to pay Miss X £150 to recognise the distress this caused her. However, I am not satisfied this is a suitable remedy.
32. I do not consider there was any fault in the Council resuming recovery action in August 2022. At this point the deductions from Miss X’s benefits had stopped and the Council was receiving no payments from Miss X.

Miss X’s council tax account

33. The Council’s records show it correctly accounted for all the payments it received from Miss X’s benefits apart from two payments in late 2021. The Council identified one of these payments in February 2023 and credited it to Miss X’s account at the time. In response to my enquiries, the Council identified a further payment from October 2021, which it said it would allocate to Miss X’s account as soon as possible. The Council says these payments included an incorrect reference number, which it why it had not identified the payments at the time. I cannot hold the Council responsible for any mistakes or errors which might have been made by the DWP, including which reference number the DWP quoted.
34. Miss X’s council tax account shows that all the other deductions made from her benefits have been credited to her account.
35. However, Miss X’s council tax account does not show the five payments she made to the Council’s bailiffs between June and September 2023.

Complaint handling

36. Miss X made several complaints to the Council about her council tax after April 2023. However, instead of responding under its complaints process, the Council passed several of these complaints to its council tax team to respond to informally. In one response, the Council told Miss X it would not treat her email as a complaint because it did not think it had done anything wrong. The Council seems to have made that decision without investigating Miss X’s complaint.
37. Had the Council properly investigated Miss X’s complaint sooner, I am satisfied many of the issues would have been resolved earlier. This caused Miss X further avoidable time and trouble complaining to the Council.

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Agreed action

38. Within one month of my final decision the Council will:
• credit Miss X’s council tax account with the £50 she paid to the Council’s bailiffs between June and September 2023;
• apologise to Miss X for the errors in handling her council tax account and for the delays in properly responding to her complaints; and
• pay Miss X £250 to recognise the avoidable distress, upset and time and trouble.
39. Within three months of my final decision the Council will:
• remind its complaint and council tax staff that complaints should be processed in line with the Council’s complaints procedure and decisions about fault on the Council’s part should only be made after a proportionate investigation into a complaint; and
• review its procedures for identifying unallocated payments in its council tax receiving account to ensure that unallocated payments are traced within a reasonable period of time.
40. The Council should provide us with evidence it has complied with the above actions.

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Final decision

41. I have completed my investigation. There was fault in how the Council took recovery action and responded to Miss X’s complaints. This caused her avoidable distress, upset, time and trouble for which the Council agreed to apologise and pay a financial remedy. It will also credit other payments Miss X made to her account and review its procedures.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman