Summary: Miss B complained that the Council was preventing her from paying her council tax, because it would not provide a method of payment which did not require a bank account. We have found some fault. The Council has agreed to consider whether Miss B is entitled to a payment card for exceptional reasons and add some information to its website about this alternative.

The complaint

1. Miss B complained that the London Borough of Havering (the Council) is acting unreasonably by not allowing her to pay her council tax in an alternative way, because she does not have a bank account. This causes her distress and inconvenience and means arrears of council tax build up.

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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 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)
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, made enquiries of the Council and considered the comments and documents the Council provided. Miss 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

Methods of paying council tax

5. The Council’s website offers three ways of paying council tax: direct debt, bank transfer or debit card. It says if a person does not pay their council tax the Council will take them to court, and they may incur legal fees.

What happened

6. Miss B does not have a bank account, due to personal preference, lack of trust and cultural beliefs. She says she has enquired about opening a bank account but due to a lack of appropriate ID and a poor credit record she has been refused. She says she has to ask people to make payment so her behalf which can be difficult, and she struggles to pay on time.
7. In July 2022 she asked the Council for a payment card so she could pay with cash at a paypoint. The Council advised her that it no longer issued payment cards and gave details of the express payment line which requires a bank debit card.
8. Miss B asked again in October 2022 for a payment card. The Council responded this time saying it would provide a payment card which she could use from December 2022.
9. In January 2023 Miss B complained to the Council that she had not received the payment card as promised and had now received a summons for non-payment of council tax with court costs. She requested a card again.
10. The Council replied in February 2023. It said it had not issued payment cards since August 2022 when the policy changed due to the extra cost involved in accepting payments this way. It apologised for the error and removed the summons and costs. It said she owed £642 for the current year and suggested a payment plan. It again repeated the three payment methods via a bank account.
11. Miss B escalated her complaint on 30 March 2023. The Council acknowledged her complaint and repeated the available payment options. The Council did not respond to her complaint until 18 May 2023. It apologised for the delay but explained that her email had not been sent to the complaints team until 9 May 2023.
12. The Council apologised for the inaccurate information given in October 2022 about the payment cards. It confirmed the decision to withdraw payment cards was due to budget constraints and historic cards in use would not be replaced once they expired. It offered to hold action on the summons for non-payment for another three months but recommended she started to pay her council tax by one of the available bank methods.
13. Miss B complained to us in February 2024.
14. In response to my enquiries the Council said:
• It will issue a payment card in exceptional circumstances but the council tax payer must show why they cannot use another payment method;
• Miss B’s circumstances had not been shown to be exceptional as she had managed to pay her council tax since 2019;
• 97% of people in England have a bank account; and
• It had not received any other requests of this nature for seven years.
15. In response to a draft of my decision it has suggested Miss B may be able to open a basic bank account if she wishes.

Analysis

16. I accept that it is for the Council to decide which methods of payment for council tax it will accept, and that the vast majority of residents are able to pay by direct debit, debit card or bank transfer. However there remains a small percentage of people who do not have a bank account and in Havering have no means of paying their council tax independently.
17. Miss B says she has been refused a bank account and I am concerned that she has no means of paying her council tax without relying on a third party, when the Council holds significant powers of recovery for non-payment of council tax. The Council has not engaged with this point at all in its complaint consideration but simply repeated the three options for paying via a bank account. This was fault which caused Mis B frustration.
18. The Council says it will provide a payment card to people in exceptional circumstances, but it did not offer this option to Miss B or ask her why she did not have a bank account. It does not mention this option on its website and only raised it in response to my enquiries. The information given to Miss B in the complaint response, that the Council was phasing out use of all payment cards due to budgetary reasons, does not support the existence of an exceptional option. I also note that it has decided Miss B does not have exceptional circumstances but has not asked her for the reasons why she is in this position and based its view on the fact she paid her council tax without difficulty since November 2020.
19. In addition to the inaccurate information Miss B was given over the availability of a payment card I do not consider the Council has properly considered Miss B’s request for a payment card or her personal circumstances which have led to this situation. This is fault.
20. Given the lack of evidence of the operation of a scheme for exceptional cases, I am concerned that the Council is fettering its discretion and not providing any option for the small number of residents who do not have a bank account. While there is no evidence this is discriminatory in Miss B’s case, it could potentially indirectly discriminate against groups of people who are already economically marginalised.

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Agreed action

21. In recognition of the injustice caused to Miss B, I recommended the Council within one month of the date of my final decision:
• asks Miss B to provide the reasons why she cannot use any of the available payment methods and why it remains difficult for her to pay her council tax regularly and on time;
• on receipt of her response, consider whether she qualifies for a payment card for exceptional reasons and if not provides full reasons for its decision; and
• considers adding a note to the website about the existence of an alternative option in exceptional circumstances.
22. The Council has agreed to my recommendations and 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 Miss B and I have completed my investigation on this basis.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman