Summary: We have concluded our investigation without a finding of fault. The Council refused the application on the basis of the level of savings evidenced at the time and it was entitled to take this into account when assessing financial hardship. I have not seen evidence of an inappropriate credit search or that Ms X was prevented from pursuing her complaint. Concerns about compliance with data protection are for the Information Commissioner’s Office.

The complaint

1. Ms X complains the Council failed to properly consider her application for a Discretionary Housing Payment. She says the Council used incorrect expenditure figures, relied on inaccurate assumptions about her future financial position and wrongly concluded she was not experiencing financial hardship. Ms X also complains the Council carried out a credit check without her consent and mishandled her personal information. In addition, she complains about the accuracy of advice given by the Council about how she could challenge the decision. Ms X says the refusal of the Discretionary Housing Payment caused her financial hardship and distress. Ms X would like the Council to investigate the conduct of the officers involved, review how her financial information was assessed, consider whether any credit search affected her credit record, ensure her personal data is securely handled and reassess her application.

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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 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)
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(1), as amended)

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How I considered this complaint

4. I considered evidence provided by Ms X and the Council as well as relevant law, policy and guidance.
5. Ms X and the Council were offered an opportunity to comment on my draft decision. I considered any comments made before making a final decision.

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What I found

Relevant guidance and legislation

Discretionary Housing Payment (DHP)

6. A council can 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 May 2022, section 2.3)
7. Government guidance allows councils to choose (discretion) when to offer a DHP; there is no statutory right to payment. However, guidance says DHP decisions must follow the ordinary principles of good decision making. This means councils must act fairly, reasonably, and consistently, and must decide each case by considering individual circumstances. Councils can decide:
• what questions to ask applicants;
• what award to make (if any); and
• how long to make payments for.
8. The council must tell the applicant about its decision and explain its reasons if the decision is not to make a payment. The guidance says councils should make a decision as soon as it can and avoid unnecessary delay

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What happened

9. I have included a summary of some of the key events in this complaint. This is not intended to be a comprehensive account of everything that took place.
10. In mid-January, Ms X applied to the Council for a Discretionary Housing Payment (DHP). As part of her application, she provided financial information. Around this time, a Council officer spoke with Ms X about her circumstances. Ms X explained she had been made redundant the previous year, was seeking employment and had taken out a loan to assist with rent payments.
11. Around the same time, the Council carried out its assessment of the application. Towards the end of January, the Council emailed Ms X stating that, having considered her circumstances and the personal loan she had taken out, it would not recommend a Discretionary Housing Payment. It suggested that earning a specified monthly amount could lift the benefit cap and signposted her to other sources of support.
12. Ms X responded shortly afterwards, querying the Council’s reasoning. She said the loan would not be sufficient to sustain her housing costs in the coming months and asked for further explanation of the assessment.
13. In response, the Council explained that a DHP is paid as a last resort where financial hardship is apparent in the present. It stated there was no imminent risk of homelessness and encouraged Ms X to continue seeking employment and to obtain debt advice if needed.
14. In early February, the Council issued a further response. It stated it was satisfied Ms X was not experiencing financial hardship because her savings were approximately £11,000 as at mid-January. The Council therefore refused the application.
15. In that response, the Council explained it had considered Ms X’s projected financial position over the following months. It set out its calculation of how her savings would reduce over time and stated its view of when financial hardship might arise based on the assumptions it had used.
16. Ms X remained dissatisfied. She queried the financial calculation and said certain expenditure had not been properly reflected. She also raised concerns about the handling of her personal information and about advice she said she had been given regarding how she could challenge the decision.
17. Ms X subsequently pursued her concerns through the Council’s complaints procedure. As part of her complaint, she maintained that incorrect financial information had been used, questioned whether a credit check had been carried out and expressed concern that she had been told the only way to challenge the decision further would be to seek legal advice.
18. The Council considered Ms X’s concerns at Stage 1 and Stage 2 of its complaints procedure. In its Stage 2 response, it maintained its position on the DHP decision. It also explained the route available to challenge a DHP decision and said that, if Ms X wished to submit a further application, it would arrange for this to be considered by a different officer or team.
19. Ms X brought her complaint to the Ombudsman. She says the refusal of the DHP caused her financial difficulty and distress, and that the Council’s handling of the matter, including the credit check and advice about further challenge, was unfair.

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Analysis

Consideration of the Discretionary Housing Payment application

20. Discretionary Housing Payments (DHPs) are awarded at the Council’s discretion to provide short-term assistance to claimants experiencing financial hardship. It is for the Council to decide whether to award a payment, provided it considers the application properly and takes relevant information into account.
21. Ms X applied for a DHP and provided details of her income, expenditure, savings and a loan. The Council refused the application. In its decision letter dated early February 2026, it stated Ms X had savings of approximately £11,000 as at January 2025 and that it was not satisfied she was experiencing financial hardship. This savings figure is evidenced by the bank statements provided with the application.
22. The Council also explained it had considered Ms X’s likely financial position over the following six months, noting that any DHP would normally be awarded for 13 or 26 weeks. It calculated that, with continued Universal Credit and Council Tax Support payments, her savings would reduce by approximately £3,000 over that period, leaving a projected balance of approximately £7,500 as at July 2025. It further stated that, based on the assumptions set out in its letter, her expected point of financial hardship would be around September 2026.
23. Ms X says the Council used incorrect expenditure figures and did not properly reflect her reported monthly overspend. The evidence indicates the Council used standardised expenditure figures derived from Office for National Statistics (ONS) averages when modelling her projected financial position. While these figures may not have reflected Ms X’s exact stated expenditure, the central basis for refusal was the level of savings available and the Council’s assessment that she was not currently in financial hardship.
24. Even if the Council had used Ms X’s preferred expenditure figures, this would have affected only the projected date at which her savings might be exhausted. It would not have altered the fact that the Council did not consider Ms X to be eligible at the time for a DHP. It was open to the Council to take the level of savings into account when deciding whether she was experiencing financial hardship.
25. In its Stage 2 complaint response, the Council said that if Ms X wished to make a further application for a Discretionary Housing Payment, it would arrange for this to be considered by a different officer or team. It explained this was to address her concerns about the original assessment. The Council did not prevent Ms X from seeking further consideration of her circumstances should she choose to reapply.
26. Ms X has also expressed dissatisfaction with the tone and wording of the Council’s correspondence, which she considers dismissive and unfair. I have reviewed the email exchanges. While the language used may have caused Ms X frustration, I have not seen evidence that the Council’s communication was inappropriate to the extent that it amounts to administrative fault. The correspondence set out the Council’s position and the reasons for its decision, even though Ms X disagreed with that reasoning.
27. In these circumstances, I am not satisfied there was administrative fault in the way the Council reached its decision to refuse the DHP. As I have not found fault in the decision-making process, I cannot conclude that the financial difficulties Ms X describes were caused by fault by the Council.

Advice about further challenge

28. Ms X says a senior officer told her the decision on her DHP application was final and that her only option was to instruct a solicitor.
29. The evidence shows that, at that stage, Ms X was seeking to challenge the Council’s decision not to award a DHP. The Council had considered the application and an internal review had taken place. Once the assessment and review have been completed, the mechanism to challenge the lawfulness of the decision is by way of Judicial Review.
30. In those circumstances, it was correct to explain that any further challenge to the merits of the decision would need to be pursued through legal proceedings. The advice given related to how the decision itself could be challenged. It did not prevent Ms X from using the Council’s complaints procedure to raise concerns about service or officer conduct. In fact, her complaint was accepted and considered at both Stage 1 and Stage 2.
31. I am therefore not satisfied there was administrative fault in the advice given about the available routes of challenge.

Alleged credit check

32. Ms X says the Council carried out a credit check in relation to the loan she declared in her DHP application without her consent. She is concerned this may have affected her credit record and future employment prospects.
33. The evidence shows the Council carried out a soft credit search as part of its assessment of the information provided in support of the DHP application. The Council has said it does not undertake hard credit searches and does not provide lending or financial services.
34. When applying for a DHP, applicants are required to provide information about their financial circumstances. It was open to the Council to take reasonable steps to verify the information provided as part of that assessment. I have not seen evidence that the Council carried out a hard credit search or that the soft search adversely affected Ms X’s credit record.
35. Whether the Council was required to obtain explicit consent for the search, or whether it complied with data protection legislation, is a matter for the Information Commissioner’s Office (ICO). The Ombudsman does not determine breaches of data protection law.
36. On the information available, I am not satisfied there was administrative fault in the Council’s decision to carry out a soft search as part of its financial assessment.

Handling of personal data

37. Ms X also raised concerns about the way the Council handled her personal information, including copies of her passport and bank statements. She says these were sent to or stored in a shared email account and that she was concerned about the security of her data.
38. When applying for a DHP, applicants are required to provide personal and financial information so the Council can assess eligibility. The Ombudsman does not determine whether an organisation has breached data protection legislation or whether its information security arrangements comply with statutory requirements. Those matters fall within the jurisdiction of the Information Commissioner’s Office (ICO).
39. I have not seen evidence of administrative fault in the way the Council considered Ms X’s complaint about these matters. If Ms X remains concerned about how her personal data has been handled, she may wish to raise the matter with the ICO.

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Decision

40. I have completed my investigation and do not find fault by the Council. The Council refused the application on the basis of the level of savings evidenced at the time and it was entitled to take this into account when assessing financial hardship. I have not seen evidence of an inappropriate credit search or that Ms X was prevented from pursuing her complaint. Concerns about compliance with data protection are for the Information Commissioner’s Office.

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Investigator's decision on behalf of the Ombudsman