Summary: The Council wrongly told Miss X it owed her a large amount of money. The Council caused injustice as Miss X borrowed money from family and friends in expectation of the payment before the Council told her it had made a mistake. Miss X struggled to pay back the loans. To put this right the Council will pay Miss X £150 in recognition of the trouble and distress it caused her.

The complaint

1. Miss X complains the Council wrongly told her it owed her over £5,000 in housing benefit and would pay this to her. Miss X said before the Council corrected this, she had borrowed money from family and friends to buy things for her new home. She said she then had difficulty paying the money back

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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 an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. 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)

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How I considered this complaint

4. I considered the complaint made by Miss X and discussed it with her. I considered the Council’s responses to Miss X.
5. Miss X and the Council had an opportunity to comment on a draft version of my decision. I considered their comments before making a final decision.

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What I found

6. Miss X lived in temporary accommodation provided by the Council. The Council then allocated Miss X a permanent home. On 6 December 2019 The Council told Miss X it had underpaid her £5,499 housing benefit and it would pay this to her. On 17 and 23 December Miss X checked this with several Housing and Benefits officers who all told her she would get the money. She also checked if she had rent arrears and the Council said no.
7. Miss X says she then borrowed money from family and friends to buy things for her new home.
8. On 30 December the Council told Miss X it must pay the money to the landlord she had while in temporary accommodation.
9. Miss X complained and said the Council had put her in financial difficulties.
10. The Council upheld Miss X’s complaint. It agreed many officers had given her the same wrong information. It said especially with such a large payment the officers should have checked who it would pay the money to. It said it would address this with the officers concerned. It apologised but said it was not responsible for Miss X borrowing money on the strength of what the Council told her. It said housing benefit is only for rent.

Finding

11. The Council accepts it is at fault for the wrong information it gave Miss X. The Council has not addressed the extent of the injustice this caused. Miss X acted to her detriment because of what the Council told her. I understand why in the run up to Christmas and in a new home Miss X borrowed money in expectation of a large payment from the Council. Miss X then had difficulties paying back the loans.
12. While housing benefit is for rent, an underpayment may not be. In many cases the claimant has already made up the rent shortfall, so the payment is reimbursement for money they should not have needed to pay. Miss X did ask if there were any rent arrears.

Agreed action

13. To put matters right for Miss X the Council has agreed that within one month of my final decision it will pay Miss X £150 for the distress and trouble it caused by providing wrong information to her.

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Final decision

14. The Council is at fault and had caused injustice. The Council has agreed to provide a remedy for this. I have completed my investigation and closed the complaint.

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Investigator's decision on behalf of the Ombudsman