Summary: Ms X complains about a debt of several thousand pounds the Council decided she owed in 2015. She says it was wrong to say she owed it and has not acted properly in its efforts to recover the debt since. The Ombudsman found the Council’s decision it overpaid Ms X’s housing benefit and council tax support happened too long ago for us to investigate now. And its general approach to recovering the debt from Ms X since January 2018 has been without obvious fault. However, there was fault in its actions since issuing its final complaint response to Ms X which caused her a personal injustice and it has agreed to remedy this.

The complaint

1. Ms X complains about the Council’s decision in 2015 she had been overpaid several thousands pounds of housing benefit and council tax support. She also complains about the Council’s actions in reclaiming the money it says she owes. This includes instructing enforcement agents and taking money directly from her salary at what she says is an unaffordable level.
2. Ms X says the Council has been dismissive of her concerns and has caused her financial hardship and stress.

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What I have investigated

3. I have investigated Ms X’s complaint. This includes, to a very limited degree, some of the events of 2015 and 2016.
4. The decision the Council took then is directly linked to Ms X’s current complaint as it forms the sole basis for the debt it is now asking her to repay. Where I have exercised discretion to investigate events in 2015 and 2016, I have done so to find out whether the Council can show it properly explained Ms X’s rights to a review or how to appeal its decision at the time. This means my investigation has focused on how the Council communicated with her at the time.
5. Given my findings in the statement below, I have concluded there is no good reason to extend my investigation to consider the rationale for the Council’s decision in 2015. I have instead decided to look at events from January 2018 onwards. That is 12 months before Ms X complained to the Council. She was involved in its complaints process from then onwards and so there is good reason to look at that period of time.

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The Ombudsman’s role and powers

6. 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)
7. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word ‘fault’ to refer to these. If we are satisfied with a council’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)
8. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)

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How I considered this complaint

9. I spoke with Ms X and read the complaint she made to the Ombudsman. I wrote to the Council to make enquiries and reviewed the information it sent in response.
10. I shared a copy of my draft decision with Ms X and the Council and I invited them to comment on it.

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What I found

11. Housing benefit helps people on low incomes to pay their rent. It is a means tested benefit, taking into account both income and savings. The benefit is administered by local authorities on behalf of the Department of Work and Pensions. The rules for the scheme are therefore set by the government.
12. Council tax support is a way of reducing a council tax bill for those on a low income. Eligibility for this is also means tested. Council tax support schemes are created and administered by local authorities directly and so eligibility changes from place to place.
13. In late 2015, the Council wrote to Ms X to ask for evidence in support of her housing benefit claim over the previous two years. When she did not respond, the Council wrote to tell her it had overpaid her housing benefit. Consequently, some of the council tax support it had provided was also retrospectively withdrawn due to the change in her housing benefit eligibility. This left Ms X with council tax to pay from previous years as well as her current annual bill. The Council told Ms X she now owed it around £4,000. The decision letter it sent to her explained how she could ask for a review of its decision if she disagreed.
14. Ms X says she did not know she could ask for a review at the time. She says her home life was complicated then and she was significantly affected by stress and general mental ill health. Ms X says she telephoned the Council in 2016 and asked how she could appeal the decision she owed the money. She says she was told she could not appeal. The Council accepts Ms X called it in 2016. But it says its record of the call shows it advised Ms X to request a review as soon as possible.
15. By January 2018, Ms X’s debt had not significantly reduced. The Council says it has been reclaiming the housing benefit overpayment debt by making deductions from Ms X’s housing benefit since 2017. It also states it has made a number of recalculations since 2015 and these have largely been in her favour. It points out when Ms X complained about the debt again in 2018, it offered advice on evidence she could produce to give it grounds to reduce her liability, even if it could not remove it completely.
16. The Council says because Ms X made few repayments to her council tax debt, it went to court and obtained liability orders. These are court orders which enable it to take further action to recover the debt. Ms X says the need to pay back for previous years affected her ability to pay for the then current year, and the situation has never really improved. Ms X says the Council never recognised her financial vulnerability and limited means, and continued to seek repayment of the debt even when it was obvious she could not afford it.
17. The Council told the Ombudsman it made a number of attempts to agree payment arrangement with Ms X, both directly and via enforcement agents, but she failed to keep to them.
18. The Council’s records show Ms X told it she had financial problems in January 2018. A debt advice group asked for a suspension in recovery action while a payment arrangement was agreed. The Council refused then but, in March 2018, it spoke with Ms X directly. It explained a payment arrangement could not be made because the case was with enforcement agents. Shortly afterwards, it agreed to recall the case from the enforcement agents. It replaced repayment with an Attachment of Earnings (AOE) order.
19. AOE orders are sent in this type of case by a council to someone’s employer. The order requires the employer to deduct a set percentage from their employee’s wages and sent it directly to the council to repay a council tax debt. The rate of deduction is fixed by the government in law and is not set by councils. A maximum of two council tax AOE orders can be in place at one time. The Council accepts it sometimes used two AOE orders in Ms X’s case but said it did this because her council tax debt related to two different addresses and therefore two different accounts.
20. Around three weeks after the AOE orders were put in place, the Council asked Ms X to complete an income and expenditure form so it could review her circumstances. Ms X took around a month to return the income and expenditure form to the Council. An officer spoke to Ms X but decided her offer to repay only £50 per month was not enough. The available records suggest communication between Ms X and the Council continued through the summer but, as no payments were received, the debt was returned to an enforcement agency in October 2018. Ms X was visited by the enforcement agent and incurred £620 in statutory fees as a result. Although Ms X made several payments totalling £410 to the enforcement agent, the debt therefore increased.
21. The following month the Council again tried to come to a payment arrangement with Ms X but was unable to agree on an amount. Around this time, Ms X told the enforcement agent she was not liable for the original debt. He contacted the Council while visiting her at home. There is evidence officers from the council tax section suggested Ms X should contact the benefits section if she wanted to appeal against the housing benefit overpayment.
22. Ms X asked the Council to review the 2015 decision in November 2018. It refused, saying the limit for a review was 13 months. Ms X made a formal complaint to the Council in January 2019 and received a final response in March 2019. The Council decided it would suspend the AOE order and other recovery action to explore whether an agreement could be reached with Ms X.
23. It said a meeting could be arranged if Ms X wanted one. However, by the following month no meeting had taken place and telephone calls and emails had not led to an agreement. Ms X says the case officer she dealt with was unhelpful. The Council says Ms X did not insist on a meeting at any stage and it believes it ‘engaged fully’ with her in writing and by phone. Nor is it convinced a meeting would have meant agreement would have been reached sooner. In the absence of an agreement at this point, the Council decided to restart the AOE orders.
24. Ms X took the matter to a more senior officer. They asked the case officer to look at it again and a tentative agreement was soon reached. The Council wrote to Ms X’s employer to remove the AOEs. Conversations between Ms X and the Council continued and they agreed a payment arrangement. Ms X will pay £50 per month only on top of her usual monthly council tax bill and this will last for nearly a decade until the whole debt is repaid. The Council says if Ms X keeps up the agreed payments it will not seek recovery of the debt by other means.
25. Ms X says payments were still taken from her salary after that point. She says this caused her financial hardship. The Council blames her employer for this. It says it wrote asking for the payments to be cancelled. The Council says once it traced Ms X’s money it assigned it to pay off some of Ms X’s debt.

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Analysis

26. After asking for evidence from the Council, I am satisfied it explained to Ms X in 2015 how she could appeal against its decision it had overpaid her housing benefit and council tax support in previous years. The decision letter clearly provides that information.
27. Ms X asked me to take into account difficulties in her life at the time and the stress she was under as a result. Although I accept what she says, this is information she could and should have provided to the Council instead. If she could not do so straight away, she should have done it as soon as possible afterwards. It is not good reason for me to investigate the decision now, as Ms X could have approached the Council or Ombudsman much sooner than she did.
28. Ms X says she had a telephone conversation with the Council in 2016, where she explained some of her issues, but was given wrong advice about challenging the 2015 decision. The Council’s record of the telephone call is different to Ms X’s recollection and, given the time that has passed and in the absence of a call recording, it is simply not possible for me to reliably investigate now what happened then. Likewise, if Ms X wanted to complain about the Council’s decision to use enforcement agents to seek payment of the debt in 2017, when most of that activity took place, she could have done so sooner.
29. I have considered the overall actions of the Council since January 2018 in respect of Ms X’s debt. It is important to note the recovery of public funds is in the public interest and is something councils are entitled and expected to do. Only the more extreme cases of vulnerability would require a council to stop attempts to recover a debt completely.
30. This means councils should recognise when someone is vulnerable, or having genuine difficulty making repayments, and take appropriate measures. Where outside organisations become involved on behalf of a council, such as enforcement agents, the same applies to them. The evidence I have seen shows the Council was in relatively regular contact with Ms X throughout 2018. It asked her for details of her incomings and outgoings more than once, suggested she should seek debt advice and that could submit applications for discretionary housing payments.
31. I have considered if there were opportunities to recognise the reasons Ms X was struggling to pay sooner. However, the Council routinely asked for more information from Ms X and sometimes did not receive it. She made offers of repayment which officers weighed up but decided were not large enough. I cannot say it was fault not to accept these offers. The decision was taken on its own merits by the officers concerned using their professional judgement of what was appropriate. It is not for the Ombudsman to say a certain amount is or is not acceptable. Nor do I agree the Council has been dismissive of her concerns.
32. Ms X asked to meet with the Council to discuss the debt and what she could afford to repay and it agreed, in its Stage 2 complaint response, a meeting could take place. The fact there was then no meeting is fault. Although the Council says Ms X did not insist on a meeting, she should not have been put in a position to have to do that. Although the Council has clearly decided with hindsight a meeting would not have resolved the situation any quicker, there is no evidence that was an active consideration at the time.
33. There was also fault in the Council’s approach to the AOE orders which were paid in error by Ms X's employer in May and June 2019. Although the Council is not responsible for the actions of Ms X’s employer, she clearly told it the deductions had caused her financial hardship. The Council had already accepted she could only afford voluntary repayments of £50 per month, but these payments were £478 in total for the two months in question.
34. The Council says it allocated this money to Ms X’s 2019/20 council tax account as she requested, rather than the older debts. Ms X however says she felt cornered and bullied by the Council into doing this and really could not afford that level of deduction from her salary.
35. I believe it was fault by the Council to not offer Ms X the chance to have some or all of the proceeds returned to her, given the circumstances and the repayment agreement it had only just reached with her. It knew her incomings and outgoings and should have been aware the level of deduction was unaffordable for her. Clearly a decision to repay Ms X some of this money would have left her current year’s council tax liability at a higher level, but that is a choice she should have been offered. There is no evidence the Council considered this approach.
36. I am satisfied a personal injustice has been caused to Ms X as a result of the fault identified in this statement. The failure to arrange a meeting, despite agreeing to do so, caused Ms X frustration and I think is likely to have caused the negotiations over her payment agreement to take longer than necessary. The failure to properly take into account Ms X’s views about the extra AOE deductions caused her some distress through worries about the financial hardship it would cause.

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Agreed action

37. By 6 January 2020, the Council has agreed to:
• Write to Ms X to apologise for not meeting with her as agreed and for the way in which it assigned the income from the AOE orders in May and June 2019 without considering whether her means required some to be paid back to her.
• Pay Ms X £100 as a token gesture to acknowledge the distress caused to her by the way it assigned incoming from the AOE orders in May and June 2019. The Council will allow Ms X to choose whether to receive this payment directly or allow it to assign it to her debt instead.
38. By 6 January 2020, the Council has agreed to reflect on the circumstances of this case and provide written guidance to officers involved in the administration of AOE orders. This should explain what to do if payments are received from an employer in error, where it is reasonable to presume the deduction will cause the subject financial hardship.

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Final decision

39. The Council’s 2015 decision it overpaid Ms X’s housing benefit and council tax support happened too long ago for us to investigate now. And its general approach to recovering the debt from Ms X since January 2018 has been without fault. However, there was fault in its actions since issuing a final complaint response to Ms X which caused her a personal injustice and it should now remedy this.

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Parts of the complaint that I did not investigate

40. For the reasons outlined in Paragraphs 27 to 29 of the above statement, I have decided there is no good reason for me to exercise discretion to investigate the events in 2015 to 2017 any further.

Investigator’s final decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman