Summary: Ms X complains about the Council’s decision to refuse her application for a Discretionary Housing Payment causing distress and financial hardship. We have found no evidence of fault in the way the Council consider Ms X’s request for a Discretionary Housing Payment. But we found fault in the Council decision letter to Ms X about her application. The Council has apologised and provided a full explanation for its decision to Ms X which is suitable action for it to take. So, we have completed our investigation.

The complaint

1. I have called the complainant Ms X. She complains the Council has unfairly refused her request for a Discretionary Housing Payment (DHP) to help her move to new accommodation. Ms X says she has been caused distress and financial hardship due to the Council’s decision.

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The Ombudsman’s role and powers

2. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word fault to refer to these. We consider whether there was fault in the way an organisation made its decision. If there was no fault in how the organisation made its decision, we cannot question the outcome. (Local Government Act 1974, section 34(3), as amended)
3. 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(i), as amended)

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How I considered this complaint

4. I have read the documents submitted by Ms X. I considered information from the Council and the supporting documents it provided.
5. Ms 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

Discretionary Housing Payments

6. A council may award discretionary housing payments (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)
7. The guidance manual says DHP’s can cover a rental deposit, rent in advance and costs associated with taking up a new tenancy, for example removal costs.
8. Government guidance gives councils choice (discretion) about when to offer a DHP; there is no statutory right to payment. However, guidance stresses that DHP decisions must follow the ordinary principles of good decision making. Councils must act fairly, reasonably, and consistently, and must decide each case on its 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)

The Council’s policy

9. The Council’s policy explains it has two discretionary payments scheme. The first is for help with Council Tax payments, the second for help towards housing costs.
10. It says that ‘Discretionary' means the Council can choose who it pays, how much it will pay and how long the payments last for. The policy gives the Council the flexibility to help people who fall outside the normal welfare benefits schemes. Unlike Housing Benefit or Council Tax Support it has no obligation to make payments. It aims to make consistent and fair decisions and will consider each claim on its merits.
11. For a DHP the policy says there needs to be a shortfall between the amount of benefit an applicant receives and the amount of rent they are charged. This is a legal requirement set by the government.
12. The Council asks for claims in writing using a claim form so an applicant can be sure they are giving the Council all the information it needs. When making a decision the Council looks at why the applicant has financial difficulty paying rent. And will look at applicant’s finances and efforts to improve their financial situation such as looking to move to a more affordable property.
13. If the Council decides not to make an award, the applicant can appeal the decision.

What happened in this case

14. What follows is a brief chronology of key events. It does not contain all the information I reviewed during my investigation.
15. Ms X lived in privately rented property with her family. In February 2023 Ms X made an DHP application to the Council to help with rent arrears. Ms X said her landlord had served a section 21 notice on her to leave the tenancy in April 2023, but she owed two month rent arrears of £1300. Ms X confirmed she had made a homelessness application to the Council. The Council responded and asked Ms X for more information about the need to leave the property, proof of rent arrears and other costs.
16. In March 2023 Ms X advised she had been able to find another privately rented property available in April 2023. But she needed a payment of £2775 to secure it being two months’ rent in advance plus a month’s deposit. Ms X said her landlord would waive the two months of outstanding rent if she left on the final date of the section 21 Notice in April 2023. So due to changing circumstances Ms X asked the Council for an immediate DHP to help her secure the accommodation rather than a request for the rent arrears.
17. The Council says due to sporadic contact from Ms X it was only able to confirm the section 21 notice and accept a homeless duty towards her in early April 2023. It sent Ms X an income and expenditure form to complete to get an accurate assessment of her financial circumstances. The Council referred Ms X to an officer (a private rented sector coordinator) for advice about properties and her situation.
18. The officer told Ms X of her legal right to remain in her current property after the final date of the section 21 notice until the landlord obtained a possession order. The officer said the Council could negotiate with Ms X’s landlord to see if she could remain in the property, but Ms X was reluctant to do so. The Council says it did not hear from Ms X about contacting her landlord and she did not send in the financial information it requested.
19. The Council decided Ms X’s DHP application and refused it. The decision letter explained that DHP’s could not be awarded to help with rent in advance and rent deposits. Ms X appealed the decision as she had already moved into the new property. Ms X explained she borrowed money from friends to ensure she could move to the property, or she would have been homeless. Ms X said she needed the DHP so she could repay the money she borrowed. Ms X said the Council had taken time to make a decision and she considered the outcome unfair.
20. The Council considered Ms X’s appeal but refused it. Ms X complained to the Council about the decision and said government guidance allowed paying DHP’s for rent in advance. The Council considered Ms X’s complaint. It noted she had received DHP’s before at her previous property to help with rent arrears where the rent was £650 a month. Ms X had also received help with Council Tax arrears which it considered showed she was struggling financially.
21. The Council said a DHP was a short-term solution to help prevent homelessness and help tenants improve their financial situation. Ms X had not provided the financial information it sought to carry out a full affordability assessment. But it noted that Ms X was struggling to pay the rent at £650 a month so her new property at £925 was unaffordable. It considered that awarding her the DHP would have been irresponsible as it would have made her financial situation worse placing Ms X and family at risk of homelessness. And be an inappropriate use of public funds.
22. The Council said Ms X was advised she did not need to leave her property in April 2023 after the section 21 notice period. This was because she had a legal right to remain in the property until the landlord gained a possession order. The Council said it had offered to negotiate with the landlord on Ms X’s behalf, but she did not agree to this. The Council considered Ms X had not engaged with the Homelessness Assessment team and chose not to take the advice she was given.
23. The Council explained it had limited funding for DHP’s and its intention was to use the payments to help residents remain in their properties and help with short term financial difficulties. So, does not usually use them for rent in advance or rent deposits. It accepted Ms X had correctly highlighted government guidance says DHP’s can be used for rent in advance and rent deposits. This meant the decision letter wording in April 2023 was incorrect and it apologised for the error.
24. The Council said it would reconsider Ms X’s request for a DHP for the 2 months’ rent in advance totalling £1850.00. This was because it considered that as Ms X’s landlord had foregone two months’ rent arrears it was more affordable for Ms X to pay the rent deposit herself. It had also reviewed decision letter wording to ensure it gives full reasoning to explain the decision. The Council reviewed its decision but did not agree to Ms X’s request for a DHP.
25. In commenting on the complaint, the Council says that it must carefully target DHP’s to those people deemed to be in most need. And where the financial support must be linked to a long-term improvement in their circumstances. In cases of rent deposit requests, it must consider if it is enabling a resident to move to more affordable accommodation. As the aim of the DHP is to prevent homelessness any decision to award a DHP will look at whether the new property is affordable.
26. The Council will consider a DHP for rent in advance or a deposit to support a resident who is moving to more sustainable, appropriate, and affordable accommodation. It says if a resident has shown difficulty paying rent in their current property and chosen to move to a property with a significantly higher rent, it could be helping to worsen a financial position. In these circumstances the Council encourages residents to work with and engage with its Housing Services to complete an affordability assessment. In the same way, if a resident was moving to a more sustainable property which would help their situation in the long term the Council would consider this in its decision-making progress.

My assessment

27. The Council’s documents show it responded to Ms X’s request for a DHP to help with her financial situation. The request was for two months’ rent arrears and then changed to rent in advance and a deposit for a move to alternative property. The evidence shows the Council gave housing advice to Ms X and requested financial information from her. While Ms X did not respond to the request the Council was able to assess the financial consequences of Ms X’s request and proposed move as part of its decision-making process. The Council refused Ms X’s request for the DHP.
28. I am aware Ms X does not agree with the Council’s decision to refuse her request. However, the Ombudsman is not an appeal body about the Council’s decisions. So, it is not our role to substitute our view for that of the Council regarding a DHP application. We can consider the way the Council makes its decisions. But if there is no fault in the decision-making process, we cannot question the outcome.
29. Ms X may feel the Council has not addressed her continuing financial and housing difficulties in the DHP process. But from the evidence provided I consider the Council took relevant information into account and came to a reasoned decision about her application. The decision was in line with Government guidance and the Council’s own policy on DHP’s. In the circumstances, given the wide discretion allowed to it in determining DHP applications, I consider the Council reached a decision it was reasonably entitled to reach in Ms X’s case. So, I do not consider we have sufficient grounds to interfere with the Council’s decision in Ms X’s case because of any fault in the decision-making process.
30. But there was fault in Council’s letter to explain its decision as it was wrongly worded and said it did not award DHP’s for rent deposits or rent in advance. The Council has accepted the error and apologised to Ms X. The fault will have caused an injustice to Ms X through her uncertainty about the Council’s consideration of her request and whether she would be awarded a DHP.
31. However, the Council has apologised to Ms X for the error and explained its decision-making when responding to her complaints about the matter. I consider the apology and detailed explanations are suitable action for the Council to take to remedy any injustice caused to Ms X. And I cannot add anything further to investigation already carried out by the Council or achieve the outcome Ms X is seeking which is the award of the DHP.

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Final decision

32. I have completed my investigation. There is no evidence of fault in the way the Council consider Ms X’s request for a DHP. But there was fault in the Council decision letter to Ms X about her application. The Council has apologised and provided a full explanation for its decision to Ms X which is suitable action for it to take.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman