Summary: Ms D complained the Council made an incorrect credit to her council tax account. Nearly two years later it started sending her threatening letters, but did not provide an explanation why she owed the money. We uphold the complaint. The Council has made an offer for the distress caused to Ms D which is appropriate. It has also agreed to apologise and to our recommendations about improvements to the service it provides.

The complaint

1. The complainant (Ms D) complains that in 2021 the Council made an incorrect credit to her council tax account. Nearly two years later it started sending her threatening letters, but did not provide an explanation why she owed the money.
2. Ms D says this had a detrimental impact on her mental health and wellbeing. She was left confused, in shock and vulnerable. The Council threatened to fine her and send bailiffs to her home. Ms D asked that the Council does not recover the debt and also pays her £120 for the distress the issues caused her.

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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. 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

5. I considered evidence provided by Ms D and the Council as well as relevant law, policy and guidance.
6. Ms D and the Council had an opportunity to comment on my draft decision. I considered their comments before making a final decision.

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What I found

Legal and administrative background

7. Council tax is a tax made on domestic properties. Councils issue one bill to each household. Residents of dwellings are usually liable for council tax from the date they moved into the property.
8. There are laws and regulations that control how councils collect council tax payments and how they can make people pay council tax they owe. (Council Tax [Administration and Enforcement] Regulations 1992)

What happened

9. In 2021 the Council credited nearly £900 to Ms D’s council tax account. It says this was an inputting error by one of its officers. Later in the year Ms D’s council tax account was in credit by over £1100. The Council refunded this money back to Ms D’s bank account.
10. The Council says that in September 2023 a taxpayer advised they had not received a payment of nearly £900 to their account. The Council says it then realised it had incorrectly made Ms D the 2021 payment. It changed Ms D’s account as a result. This led to a debt on Ms D’s account of nearly £900.
11. The Council sent Ms D a bill for the balance, with a payment plan beginning the following month. The bill said the reason for its issue was “AdHoc”. It listed the recovered amount as “Transfers As At Date of Issue”. The Council provided no accompanying explanation of the reasons for the debt.
12. Ms D contacted the Council and in November it provided an explanation. It apologised it had not informed her earlier.
13. Later in November the Council sent Ms D a reminder for the unpaid bill. In early December Ms D complained. She asked the Council for £120 compensation and a refund of the amount the Council had deducted from her account.
14. The Council’s complaint responses advised it did not consider it appropriate to make Ms D a compensation payment, as she should have been aware she had not made the payment the Council credited to her account. It asked her to provide evidence if she had made a payment. It put recovery action on hold for a month to allow her time to do so.
15. Towards the end of January 2024, at the end of the hold period, Ms D paid the Council the balance on her account. She later escalated her complaint.
16. The Council’s second complaint response:
• accepted fault by the Council in its initial payment to Ms D;
• acknowledged it was regrettable it had not earlier provided Ms D with an explanation of the reasons for the bill; but
• noted it had not taken any recovery action before it provided its November 2023 explanation.
17. Ms D complained to the Ombudsman. The Council’s response advised it:
• offered Ms D £120 for the inconvenience caused by its initial fault. It did not believe there were grounds to refund the amount it had originally paid her;
• did not have any policy, procedure or guidance for its officers to provide an explanation, or to contact a taxpayer, before issuing a bill issued due to a prior mistake by the Council;
• had amended its billing information to amend the reason stated to “Payment Transfer”.

Was there fault by the Council?

18. My decision is the original incorrect credit to Ms D’s account was fault.
19. The Council did not realise its error until some years later. My decision is it was fault that, when it then changed Ms D’s account to correct the fault, it did not contact her to explain what had happened.

Did the fault cause an injustice?

20. Ms D asks for the Council to not recover the payment the Council paid her in error. But the amount is for money properly owed to the public purse. I cannot be critical of the Council seeking to collect it after it was alerted to its earlier error.
21. However, the way the Council went about seeking to recover the debt – principally by not contacting Ms D before sending the revised bill – did likely cause Ms D some avoidable distress.
22. The Council notes that, before the first payment was due, it had provided Ms D with an explanation, after she contacted it. It also offered her a payment schedule. That limits the injustice to Ms D.
23. So my decision is the Council’s offer of a symbolic payment for Ms D’s distress is in line with the approach set out in our Guidance on Remedies, if accompanied by an apology that takes account of our guidance on effective apologies.

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Agreed Action

24. The Council has agreed that:
• within a month of my final decision, it will:
1. apologise to Ms D. We publish guidance on remedies which sets out our expectations for how organisations should apologise effectively to remedy injustice. The organisation should consider this guidance in making the apology I have recommended in my findings;
2. Contact Ms D to make the payment it has offered;
• within three months of my final decision, it will develop some guidance or procedure for staff:
1. to have some sort of requirement for them to check on inputted account numbers for credits and debits; and
2. that when a debt is generated because of Council error, that it contacts the taxpayer before sending an unexpected bill.
25. The Council should provide us with evidence it has complied with the above actions.

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Final decision

26. My decision is I find fault causing injustice. The Council has agreed to my recommendations, so I have completed my investigation.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman