Summary: Miss X complained the Council failed to properly consider her application for Discretionary Housing Payment, causing her to fall into rent arrears. We found the Council did not properly consider a recent change in Miss X’s circumstances when assessing her application and in its later review. The Council agreed to apologise, reconsider Miss X’s application, and if it changes its decision, pay Miss X a financial remedy for avoidable uncertainty. The Council also agreed to issue reminders to its staff and review its application form.

The complaint

1. Miss X complained the Council failed to properly consider her application for Discretionary Housing Payment (DHP), made in June 2021. She said the Council based its decision on wrong information about her income.
2. Because of this Miss X said she fell into rent arrears and her landlord served her with notice to leave the property. She said she struggled to buy food for her family, causing her to experience stress and depression. She wanted the Council to reconsider her application with proper consideration given to the evidence she provided.

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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 an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. 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)
5. 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)

How I considered this complaint

6. I considered:
• information provided by Miss X and my discussion with her;
• documentation from the Council about Miss X’s DHP application and review request;
• the Council’s DHP policy;
• the Government’s DHP guidance manual; and
• the Ombudsman’s Guidance on Remedies.
7. Miss X and the Council provided comments on my draft decision. I considered any comments received before making a final decision.

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What I found

Discretionary Housing Payments (DHP)

8. A council may award DHP when someone needs help with housing costs and is claiming Housing Benefit, or Universal Credit which includes housing costs towards rent. (Discretionary Housing Payments guidance manual February 2021, section 1.7, as amended)
9. Although Government guidance gives councils broad discretion, it stresses that DHP decisions must follow the ordinary principles of good decision making. Councils have a duty to act fairly, reasonably, and consistently, and must decide each case on its own merits. Councils can exercise discretion in questions asked of applicants and decisions made. (Discretionary Housing Payments guidance manual February 2021, sections 1.11 and 5.1, as amended)

What happened

10. Miss X finished employment in mid-June 2021 and said the Council told her in a phone call to apply for DHP, which she did a few days later. On her application form, Miss X did not declare any employment income, or any childcare costs, as she had stopped working.
11. The Council assessed Miss X’s income and expenditure based on her June 2021 Universal Credit (UC) statement. As UC is calculated and paid in arrears, Miss X’s previous earnings and childcare costs still showed in her statement even though they no longer applied. The Council included previous employment earnings of over £1,500 in its calculations but did not include previous childcare costs. The Council rejected Miss X’s application in early July 2021, because it calculated she had enough income to meet her shortfall in rent.
12. Miss X asked the Council to review its decision. She told it she had finished work a few days before her application and what her UC payment would change to once this change was reflected. The Council asked Miss X to provide evidence of her most recent UC award. Miss X provided this information but told the Council her most recent statement still included some of her final wages. Miss X also provided evidence of when she had left her previous employment.
13. The Council asked Miss X for more evidence of her UC award effective from mid-July 2021. Miss X provided her August 2021 UC statement. The Council says it then assessed Miss X’s income and expenditure effective from mid-July 2021. The UC statement still included £280 of earnings reported by Miss X’s previous employer within the assessment period, which the Council included in its calculations. The UC statement also indicated £96 of childcare costs, which the Council did not include.
14. The Council issued its review decision in mid-September 2021 and decided Miss X still had enough income to meet her shortfall in rent so did not award DHP. Miss X said she had since applied for DHP again, but the Council told her it could not consider this while awaiting the Ombudsman’s decision on her previous application.

My findings

15. As described at paragraph 9, councils must decide each DHP application on its own merits and can exercise discretion. The Council had conflicting information about Miss X’s circumstances. Her UC statement showed employment income and childcare costs she had not declared in her application form. However, the Council did not ask for clarification from Miss X. Instead, it included her former earnings in its calculation but ignored the childcare costs which her UC statement also mentioned. I am satisfied the Council’s failure to properly examine the evidence it had or resolve the conflict in that evidence was fault.
16. At the review stage, Miss X told the Council she had stopped working before making her application and provided more recent evidence of her income. However, the Council again included earned income in its calculation, even though it had evidence Miss X had finished work before she applied. As UC payments are calculated and paid in arrears, and can include income received some time before, the Council should have again tried to resolve the conflicting evidence before making its decision. I am satisfied its failure to do this was fault.
17. Miss X said the Council told her it would not consider further applications while awaiting the result of the Ombudsman’s investigation. However, if her circumstances had changed, including, for example, if she now had evidence showing a lower income, we would still expect the Council to consider and assess applications. To refuse to do so because Miss X had complained about a previous application is, in my view, fault.
18. Without the DHP, Miss X said she fell into rent arrears, her family experienced financial difficulties, causing her stress and depression, and her landlord served her with notice to leave the property. Since DHPs are discretionary, I cannot say whether her application would have been successful had the fault not occurred. However, I am satisfied the fault identified means the Council should reconsider Miss X’s DHP application. If the Council’s decides it should have awarded Miss X a DHP, this delay in properly assessing the claim will have caused her avoidable uncertainty, for which a financial remedy is appropriate.

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Agreed action

19. Within four weeks of my final decision the Council will:
1. Reconsider Miss X’s DHP application, effective from the date of its original decision. It will:
1. establish Miss X’s actual income and expenditure at that date, seeking more evidence if necessary;
2. consider the DHP budget available when it made its original decision; and
3. backdate any award it makes to the same date it would have done at the time of Miss X’s first claim.
2. If it makes a backdated award because of its reconsideration, pay Miss X £200 to recognise the distress caused to her by the financial uncertainty her family has experienced, due to delays in properly assessing her claim.
3. Apologise to Miss X for the faults identified, including an explanation of steps taken to improve its services and prevent this happening in future.
20. Within three months of my final decision the Council will:
1. Remind staff considering DHP applications that:
1. Universal Credit is calculated and paid in arrears;
2. they should properly consider information provided by applicants, or discrepancies in applications; and
3. they should consider asking for alternative evidence to resolve any such discrepancies.
2. Review its DHP application form and decide if amendments are necessary to properly capture recent changes of circumstances which might affect the evidence required from applicants.

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Final decision

21. I have completed my investigation and uphold Miss X’s complaint. There was fault in how the Council considered Miss X’s DHP application. The Council should apologise and reconsider Miss X’s DHP application. If the Council’s reconsideration shows it should have awarded Miss X a DHP, this delay in properly assessing the claim will have caused her avoidable uncertainty. The Council agreed to our recommendations to remedy this injustice.

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Investigator's decision on behalf of the Ombudsman