Summary: Mr X complained the Council incorrectly advised him he was due a council tax refund of £5,750.75 and agreed to send him the money. The Council later said Mr X was not due a refund. By then, Mr X had spent savings and borrowed money based on the Council’s advice, causing emotional distress. The Council was at fault for giving Mr X incorrect advice about his eligibility for a refund. The Council agreed to pay Mr X an increased distress payment for raising his expectations and for the distress and uncertainty its fault caused him.

The complaint

1. Mr X complained the Council advised him he was due a council tax refund of £5,750.75 and repeatedly agreed to send the money to him. However, the Council later said it made a mistake and Mr X was not due a refund. By this point, Mr X had spent his savings and borrowed money because the Council promised him the refund.
2. Mr X has a traumatic brain injury, and the Council is aware he has a severe mental impairment and cognitive issues. Mr X said he incurred financial loss as a result of the Council’s repeated incorrect advice that it would be sending him a refund. He also suffered emotional distress because of the Council’s mistake.

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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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How I considered this complaint

5. I considered evidence provided by Mr X and the Council as well as relevant law, policy and guidance.
6. Mr X 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

What happened

7. I have summarised below some key events leading to Mr X’s complaint. This is not intended to be a detailed account of what took place.
8. Mr X sustained a brain injury in 1992 which went undiagnosed for 30 years. This affects his behaviour and cognitive function.
9. Previously, Mr X received council tax support (CTS) and did not have to pay any council tax.
10. The Council contacted Mr X in March 2025 informing him CTS was ending, and he would have to pay 25% council tax in future.
11. Mr X therefore applied for the severe mental impairment (SMI) exemption on 24 March 2025. He visited a Council office on 31 March to submit medical evidence.
12. The Council awarded Mr X the SMI exemption on 9 May 2025. This again meant Mr X did not have to pay any council tax.
13. The Council confirmed to Mr X that it processed his SMI exemption and sent him a link to claim a refund on 14 May. Mr X queried the amount of the refund, having seen different figures online. The Council confirmed it was £5,750.75.
14. Mr X telephoned to chase the refund on 22 May. The Council told him it took ten working days to process.
15. Mr X telephoned the Council to chase the refund again on 28 and 30 May. The Council sent an urgent internal request for the refund to be paid.
16. Mr X telephoned the Council about the refund on 3 June. This time the Council told Mr X he was not entitled to a refund. The Council explained the credit on his tax account was because, at the time it awarded the SMI exemption, Mr X’s CTS claim was still active. This initially created a credit of £5,750.75 on his account. However, when the Council cancelled the CTS claim this removed the credit.
17. Mr X telephoned the Council again on 4 June wanting to know why the Council previously misinformed him about the refund. He said he spent £700 of his savings and borrowed £300 from his partner as he was told he was entitled to a refund.
18. Mr X then made a formal complaint. He said the Council approved his SMI exemption and said it would process a refund. Multiple Council officers then told him he would be refunded before another officer later told him he was not due a refund, despite earlier assurances. Mr X said, based on the Council’s advice, he spent savings and borrowed money in anticipation of the refund. This caused financial hardship and emotional distress. He said the Council failed to make reasonable adjustments and he wanted to visit a Council office to show bank statements as evidence of the financial impact.
19. The Council sent its stage one complaint response on 18 June. It apologised for the misinformation it gave around the refund Mr X requested, and for the inconvenience this caused. It said it raised this as a training issue for staff.
20. The Council said Mr X did not make payments towards his tax account as he received full council tax support. While his bill showed a credit, this resulted from incorrect advice. It said it was not necessary for Mr X to attend Council offices to provide bank statements.
21. The Council offered Mr X £25 for the delay processing his SMI application, and £25 for the misinformation it gave.
22. Mr X made a stage two complaint. He said it was not about eligibility for a refund, but the incorrect information he received from the Council which led him to believe a refund was due. Based on this incorrect information he spent and borrowed money in anticipation of receiving a payment from the Council which it ultimately did not make.
23. The Council sent its stage two response on 7 July. It accepted staff repeatedly advised Mr X he was due a refund, and that the Council would process it. This information was inaccurate. It appreciated the impact the incorrect information had on Mr X’s financial planning. It acknowledged it gave Mr X repeated assurances, and he acted in good faith based on the Council’s advice. This was a service failure, and it raised this internally as a training issue. It said it cannot issue a refund for tax payments Mr X had not made, but it apologised for the financial impact resulting from the misinformation. It therefore increased its goodwill payment to £150. This was made up of £50 for the delay processing the SMI application, £50 for the repeated incorrect information, and £50 for emotional distress and financial disruption experienced when Mr X acted on the incorrect advice.
24. The Council acknowledged Mr X asked to attend a Council office in person as a reasonable adjustment to submit evidence of the financial impact. It said it added this evidence to his case record, and financial records do not change the outcome. It said, due to the clarity of Mr X’s written account, it did not feel an in-person appointment was necessary. However, it offered to arrange a face-to-face discussion if Mr X thought this would help resolve his concerns.

My investigation

25. Mr X told me he only recently found out about his brain injury. For years the impact it had on him was not understood, and he is only now coming to terms with it. He has behavioural and cognitive problems, and is still seeing a neurologist. He said the Council knows this as it saw his medical evidence as part of his SMI exemption application.
26. Mr X said the Council repeatedly told him it would pay him the £5,750.75, and he had no reason to think it would not.
27. Mr X told me he spent the money on things like hobby items, which help with his brain damage issues. He said the impact of his brain injury meant he could not wait.
28. The Council apologised for the incorrect information it gave Mr X, and for the inconvenience and distress this caused him.
29. The Council said several call centre agents gave wrong advice to Mr X. It has reminded agents to ensure they check records correctly for matters involving payments or enforcement action. Agents have also received further training on refunds and what went wrong in Mr X’s case.
30. The Council offered to increase its remedy to Mr X to £250, taking his vulnerability into consideration. The Council also offered to look at Mr X’s bank statements for the period where Mr X states he used his savings and borrowed money from his partner because he thought he was going to receive a refund from the Council.

Analysis

31. The Council accepts several call centre agents gave Mr X incorrect advice on the status of his council tax account, and whether he was due a refund. That was fault.
32. I found Council officers did not properly look at the notes for Mr X’s council tax account. If they had, they should have realised he had not previously paid any council tax due to receiving council tax support. They should also have realised the Council was in the process of switching the council tax support on Mr X’s account to the SMI exemption. Following Mr X’s complaint, the Council has provided additional training and guidance to its call centre agents. This is in line with what the Ombudsman would recommend, and I therefore do not consider I need to make any service improvement recommendations.
33. Mr X told the Council he spent savings and borrowed money based on its incorrect advice. He wanted to show the Council bank statements as evidence of this, because he wanted the Council to put him back in the financial position he was in before its incorrect advice. I found the Council did not properly engage with this aspect of Mr X’s complaint. While it acknowledged, and apologised for, the distress Mr X suffered and for any financial hardship, it did not consider his evidence and did not consider whether it would be appropriate for the Council to reimburse Mr X for any of this spending incurred as a result of the Council’s fault. The Council also did not address the fact Mr X has a brain injury, recognised by the fact it awarded the SMI exemption, and may therefore not act in the same way as someone with unimpaired mental cognition.
34. The Council’s incorrect advice raised Mr X’s expectations that he was due a significant refund. This caused Mr X avoidable frustration and distress when he learnt he was not in fact due a refund. He also suffered distress because he had spent savings and borrowed money based on the Council’s incorrect advice.
35. The Council offered to increase its remedy payment to £250 for the distress Mr X suffered, due to his vulnerability. During my investigation, the Council also met with Mr X to consider his bank statements. Unfortunately, the Council could not determine whether any of Mr X’s spending occurred as a result of its incorrect advice.
36. I have considered Mr X’s bank statements. As well as hobby items, I found Mr X spent money on takeaway food and online shopping for unknown items. He also withdrew cash. I cannot say how much of this is regular spending Mr X would have had to make anyway.
37. And while I appreciate Mr X has a brain injury which he says makes him buy things impulsively, I cannot say whether the Council should be responsible for some, or all of, this spending.
38. I acknowledge Mr X spent money on hobby items during the period where the Council had promised him a refund. However, the Ombudsman cannot say what or how much of the money he spent was due to poor communication from the Council, or whether Mr X should have waited. And we cannot say the Council should have known Mr X’s brain injury meant he would spend the money before receiving the refund the Council said it would send.
39. Ultimately, I do not consider I have enough evidence or strong enough grounds to say the Council must reimburse Mr X the money he impulsively spent.
40. I consider there is uncertainty about whether Mr X’s spending was as a result of the Council’s incorrect advice. It was therefore more appropriate for me to recommend a distress payment for that uncertainty, and for the fact the Council raised Mr X’s expectations in telling him he was due a significant refund.
41. The Ombudsman’s remedy guidance recommends payments of up to £500 for distress, depending on the circumstances and the individual impact.
42. The fact Mr X has a brain injury means he is vulnerable and he was more affected by the Council’s incorrect advice. It also means he has been affected by the distress more severely than most people. The Council should therefore increase its remedy offer to £500.

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Agreed Action

43. Within four weeks of my final decision, the Council will:
• Apologise to Mr X for its incorrect advice about a council tax refund, which resulted in Mr X spending savings and borrowing money, and for not properly considering all his evidence when responding to his complaint.
• Pay Mr X £500 for the raised expectations, avoidable distress and uncertainty its incorrect advice caused.
44. The Council should provide us with evidence it has complied with the above actions.

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Final Decision

45. I found the Council at fault for giving Mr X incorrect advice about his eligibility for a council tax refund. The Council agreed to pay Mr X an increased distress payment for raising his expectations and for the distress and uncertainty its fault caused him.

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Investigator's decision on behalf of the Ombudsman