Summary: Mrs X complained about the Council’s billing of her council tax account. We found the Council at fault. It should apologise, assign a missing payment, and make a further payment in recognition of the injustice caused.

The complaint

1. Mrs X complains about the Council’s billing of her council tax. She says the Council issued a court summons order against her but had not responded to her complaint.
2. Mrs X says this issue has impacted her health by causing unnecessary stress after receiving the court summons.

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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(1), as amended)

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What I have and have not investigated

5. While court actions and summons have been mentioned, on both occasions, the Council has cancelled action before it went to court. As the case has not been subject to a legal hearing, we can therefore consider the matter in full.

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How I considered this complaint

6. I considered evidence provided by Mrs X and the Council as well as relevant law, policy and guidance. Mrs X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.
7. I have also considered the relevant statutory guidance, as set out below. Also, I have considered the Ombudsman’s published guidance on remedies.

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What I found

What should have happened

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)
9. The council tax bill for the year is due on 1 April. A council will usually collect this through monthly instalments. If a person who has to pay council tax misses any instalment, the council will send them a reminder. If they still do not pay, or miss another payment, then they must pay all they owe (that is the full amount for the rest of the year).
10. Councils who want to recover unpaid council tax have to ask the magistrate’s court for a liability order against people it thinks owe it the money. Once a council has a liability order it can take action to recover the money and any court costs owed.

What happened

11. Mrs X had an Individual Voluntary Arrangement (IVA) which ended. In March 2024, the Council issued a council tax bill for £1,378.82. Afterwards Mrs X set up a standing order to pay £115 a month.
12. Mrs X received debt collection reminders and made a complaint to the Council about this. Following an investigation, the Council responded to say that it had not allocated all Mrs X’s payments to her account. It told Mrs X that it had now done this and removed her account from debt collection and credited the fees.
13. In the summer of 2024, Mrs X received debt collection letters from the Council about a balance on the account. Mrs X raised a new complaint, and the Council told her the balance is correct. It agreed to remove the debt collection charges if Mrs X paid the balance of £94.65 which she later did.

Analysis

14. Mrs X has sent a bank statement showing payment of £1,380 upon it at £115 per month. The payments were made by standing order, and the standing order mandate has remained the same on the statement.
15. The Council has provided a list of credits and debits it has received and made to the account. The statement shows payments of £115 being received until October 2024 when it applied the charges to the account with a credit for council tax support.
16. Following this the payment received for October 2024 is split however it totals £115. There is no payment for November 2024. In December 2024 a split payment is again received. There is no payment received for January 2025, a transfer for £115 is received in February 2025 and two payments of £115 for March 2025.
17. Overall, the issue seems to occur from when the Council applied the credit and charges to the account in October 2024. The Council has previously admitted that payments were applied to Mrs X’s old account set up under her IVA.
18. The evidence provided by Mrs X shows a consistent standing order payment being made, under the same mandate number. However, the payments made to the Council appear not to be correctly allocated to the account. There is a missing payment of £115 made by Mrs X on 18 November 2024 which does not appear on the statement. Other monthly payments are allocated to the account either split or at different times of the month. This is despite Mrs X’s bank statement showing the payment being made around the same day each month.
19. The evidence supports therefore the Council has not allocated all Mrs X’s payments to the account. By adding the missing payment of £115 to the account and the credit of £19.17 applied for the council tax support, it gives credits which total £1,399.17. This is against a debit of £1,378.82 (council tax charges) which should mean a credit of £20.35.
20. The Council has demanded a payment of £94.65. However, this can be explained by subtracting the missing monthly payment of £115 from the credit balance of £20.35 which leaves a debit of £94.65.
21. To resolve this matter, I find the Council should apply the missing payment of £115 to the account. I consider the failure to investigate this matter to be fault by the Council. Despite Mrs X complaining to it, the Council has provided no detailed explanation on how the balance of £94.65 accrued. If it had, it might have discovered the missing payment and in turn this could have prevented some of the debt collection activity applied on the account incorrectly.
22. Undoubtedly this issue has caused Mrs X a lot of unnecessary distress. Both in feeling the Council were not investigating her concerns fairly and by the incorrect debt collection activity which has taken place. It is also further increased by the Council asking Mrs X to make further payments when in fact it already owed her a credit refund.
23. I have therefore found the Council should apologise to Mrs X and make payment for the injustice this issue has caused her.

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Action

24. Within four weeks of my final decision, the Council has agreed to:
1. Provide a written apology to Mrs X for the unnecessary and avoidable distress caused by the failure to investigate and resolve this matter.
2. Apply the missing payment of £115 to Mrs X’s council tax account.
3. Pay Mrs X £300 for the avoidable distress this issue has caused.
25. 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.
26. The Council should provide us with evidence it has complied with the above actions.

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Decision

27. I find fault causing injustice. The Council has agreed to apologise, add a missing payment to the account and provide a payment for the injustice caused.

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Investigator's decision on behalf of the Ombudsman