Summary: Ms X complained the Council has not dealt with her application for a discretionary housing payment fairly and it failed to consider her personal circumstances. She also complained the Council failed to tell her that her landlord made the decision on her application. We find the Council was at fault for failing to be transparent that Ms X landlord would make a decision on her application. This did not cause Ms X a significant injustice and the Council has provided evidence it has amended its website to prevent a recurrence of this fault. The Council was also at fault because its decision letter and complaint responses did not address points Ms X had raised about her personal circumstances. While this is unlikely to have affected the outcome, it did cause Ms X some frustration. The Council has agreed to apologise to Ms X and implement a service improvement.

The complaint

1. Ms X complained the Council has not dealt with her application for a discretionary housing payment (DHP) fairly and it failed to consider her personal circumstances. She also complained the Council failed to tell her that her landlord made the decision on her DHP application.
2. Ms X says the Council’s actions have caused distress and upset.

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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 significant injustice, or that could cause injustice to others in the future we may recommend a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. 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)
5. We investigate complaints about councils and certain other bodies. Where an individual, organisation or private company is providing services on behalf of a council, we can investigate complaints about the actions of these providers. (Local Government Act 1974, sections 24A(1)(A) and 25(7), as amended).
6. 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

7. I considered evidence provided by Ms X and the Council as well as relevant law, policy and guidance.
8. 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

9. 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)
10. 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.
  (Discretionary Housing Payments guidance manual May 2022, sections 4.24 and 2.14)

11. 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. The decision should tell the applicant how to ask for a review. (Discretionary Housing Payments guidance manual May 2022, section 4.30 to 4.32)
12. From 1 April 2026, DHPs have been replaced by the Housing Payment strand of the Crisis and Resilience Fund. They are now known as "Housing Payments". However, as the events in this case happened before 1 April 2026, we will refer to the payments as DHPs.

What happened

13. Ms X applied to the Council in June 2025 for a DHP. She said there was a shortfall in her rent, and she was struggling to pay. She also said she was waiting for an outcome to her appeal for personal independence payment (PIP). A PIP is a benefit for people who have a long-term physical disability or mental health condition.
14. The Council sent a letter to Ms X in early July. It awarded her a DHP to help towards her rent from March to June. It said it was the third award she had and so it was highly unlikely it would make another payment to her based on the same circumstances. It said should her PIP appeal be successful it would expect her rent to be affordable. If the appeal was unsuccessful, then she could downsize.
15. Ms X’s representative (Mr Y) contacted the Council in early August and asked for a review. He said the award did not cover Ms X’s ongoing financial hardship. He asked the Council to provide a DHP until the end of the financial year. He said Ms X was a vulnerable disabled transgender person. Despite seeking cost of living and foodbank support, she continued to fall into rent arrears. He said it was not straightforward for Ms X to downsize because she had support networks in place in her local area. Finally, he asked the Council to consider that Ms X was waiting for an outcome to her PIP appeal, and this could take up to 12 months.
16. The Council sent a letter in response to the review request in late August. This letter said it was the third DHP award Ms X had received. While it considered each application on its individual merits, it also had to consider whether someone had received a previous payment. It declined Ms X’s request for an ongoing DHP until the end of the financial year.
17. Ms X complained to the Council in early September. She said her landlord (Provider A) made the decision on her DHP application rather than the Council. Provider A manages the Council’s housing stock. She said Provider A issued decision letters on Council headed paper. This was misleading and a conflict of interest. She also said the Council had failed to consider her transgender status, her mental health and her disabilities. She also said the Council’s decision was based on her previous applications, and it had failed to consider her PIP appeal would not be heard until 2026.
18. The Council responded to Ms X’s complaint the following week. It said councils have discretion over how they administer DHPs, including which team or department handles them. Following a corporate review of its discretionary funding, it decided to delegate responsibility for administering DHPs for Council tenants to Provider A. Provider A was in a stronger position to identify tenants at risk of eviction or experiencing acute financial hardship. The Council said it still had overall oversight and responsibility of the DHP scheme.
19. The Council also said while its award covered Ms X’s rent shortfall for five months before the date of payment, the award put her rent account into credit for four months moving forwards. This gave Ms X time to make reasonable adjustments to address her financial situation in the long term. It said while previous applications are considered as part of the decision-making process, they are not the sole determining factor. Finally, it said it did not state it would not consider future awards. However, it had to ensure discretionary support aligned with its objective of helping residents to secure suitable accommodation without subsidising arrangements that may not be sustainable. It was reasonable to advise that a further payment may be unlikely, so that Ms X could explore more sustainable ways to manage her financial situation.
20. Ms X referred her complaint to stage two in late September. She said she remained concerned the Council had not told her Provider A made the decision on her DHP application. She also said the Council had failed to consider her health issues and that she would have difficulties establishing herself in a new neighbourhood because of her transgender status. She said her ill health prevented her for making reasonable adjustments to address her financial situation.
21. The Council issued its final response to Ms X’s complaint in late October. It said it was satisfied it was appropriate for Provider A to assess DHP applications for its tenants. However, it would recommend to the revenues and benefits services that its website and privacy notices were updated to clearly state Provider A was responsible for assessing DHP applications for their tenants. It also said there was no requirement under the guidance to consider either physical or mental health issues because the main criteria were whether Ms X was receiving sufficient housing element in her Universal Credit. While it acknowledged Ms X had built support networks near to where she lived, it was important she considered all available options to ensure her tenancy remained affordable in the long term. The shortfall in her rent was because she was renting a three-bedroom property, but she only required a one-bedroom property. It had provided her with details for the resizing team so that she could look for suitable alternative accommodation within the same area.

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Analysis

22. Ms X says it was inappropriate for Provider A to make the decision on her DHP application. She is concerned Provider A could consider other factors that are not relevant when making decisions. The Council has explained why it delegates responsibility for administering DHPs for Council tenants to Provider A. That was a decision it was entitled to take, and it is not one I can criticise. However, the Council should have had some information on its website to explain this arrangement. Its lack of transparency is fault. I do not consider this fault has caused Ms X a significant injustice. But for the Council’s fault, it would have still delegated its decision making to Provider A.
23. When the Council responded to my enquiries, it explained it had not yet updated its website because it was waiting for an outcome on an investigation connected to how it handles DHPs. I therefore made a recommendation in my draft decision to amend the website. When the Council responded to my draft decision, it provided me with evidence it has now amended the website. I have therefore removed this recommendation.
24. Ms X says the Council failed to consider that her PIP appeal would not be heard until 2026. I have reviewed a copy of the decision-making records. The officer said they would provide a DHP to cover underoccupancy while Ms X waiting for the PIP appeal. This award put Ms X’s rent account into credit for four months. Therefore, there was some recognition that Ms X was waiting for an outcome to her PIP appeal. While it would have best practice for the Council to have explained this in its decision letter, it subsequently clarified this in its complaint response.
25. The officer noted Ms X had no intention of downsizing and that continuing to pay DHPs did not meet the Council’s policy of supporting people to secure sustainable and affordable accommodation which they can maintain without the need for ongoing DHP awards. Therefore, Provider A, and the Council, decided not to award an ongoing payment until 2026. That was a decision they were entitled to take. I do not find fault.
26. Ms X says the Council wrongly told her it was likely to refuse further DHP applications. When the Council responded to Ms X’s complaint, it explained it was reasonable to advise that a further payment may be unlikely, so that Ms X could explore more sustainable ways to manage her financial situation. The Council’s policy states that customers benefiting from discretionary support will be expected to take action to prevent the need for further awards. If repeat applications are made for the same set of circumstances, customers may be required to demonstrate that they have taken steps to change their circumstances before discretionary support can be awarded. I do not consider the Council was at fault for managing Ms X’s expectations about a further payment, as this is line with its policy. The Council also did not say it would not consider Ms X’s application for a further DHP.
27. Finally, Ms X says the Council failed to consider her physical and mental health and that she is transgender. She refers to internal correspondence where Provider A said the fact she was transgender was not a relevant consideration. She says this is wrong because she wishes to remain in her property because she has local support networks and feels safe.
28. The decision letter in response to Ms X’s review request fails to address the points Mr Z raised about Ms X’s vulnerabilities, her transgender status and that she would struggle downsizing. This is fault. The letter only refers to Ms X receiving three previous DHP awards. This fault caused Ms X frustration, and I can understand why she felt the Council had failed to consider her personal circumstances. The decision letter should have fully addressed the points Mr Z had raised.
29. When the Council issued its stage two complaint response, it said there was no requirement under the regulations to consider physical or mental health needs. This was poorly worded as the Council’s policy does allow it to consider whether it should provide support to people who cannot move to more affordable accommodation due to reasons such as health or disability.
30. The Council also said in its stage two response Ms X could contact the resizing team and find more affordable accommodation within the same area. Therefore, I am satisfied it eventually addressed her concerns about moving to a new neighbourhood and the difficulties she could face.
31. However, the Council failed to comment on Ms X’s points about her mental and physical health. This is fault. When the Council responded to my enquiries, it said Ms X did not provide any medical evidence that she could not move to alternative accommodation, that alternative accommodation would be unsuitable because of health-related factors, or that the current property was required to meet disability-related needs. While I accept this, it should have provided a response to Ms X’s points. Its failure to do so left Ms X with the impression it had failed to properly consider her circumstances. Given that Ms X had not provided evidence to support her position, it is highly unlikely that but for the Council’s fault the outcome would have been different. However, the Council’s fault caused Ms X some frustration.
32. In two internal emails, Provider A told the Council Ms X being transgender was not relevant to the application. In its written response to my enquiries, the Council said a person's transgender status may be relevant where it gives rise to specific housing needs. However, transgender status is not, of itself, a determining factor within the DHP scheme. The comments reflected the officers' views that a protected characteristic, in isolation, does not determine entitlement to a DHP award.
33. I would agree with the Council that being transgender, in isolation, would not warrant a DHP. While further detail may have been helpful, I do not criticise the officers’ comments. However, we would expect the Council to consider whether Ms X’s transgender status meant she would find it more difficult to move to alternative accommodation because of her support networks and safety concerns. As I have stated above, the Council considered Ms X could contact the resizing team and find alternative accommodation within the same area. This would mean she could still access her support networks and feel safe. I do not find fault.

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Action

34. When a council commissions or arranges for another organisation to provide services we treat actions taken by or on behalf of that organisation as actions taken on behalf of the council and in the exercise of the council’s functions. Where we find fault with the actions of the service provider, we can make recommendations to the council alone. Here we have found fault with the actions of Provider A and the Council and make the following recommendations to the Council.
35. By 27 October 2026 the Council has agreed to apologise to Ms X for the injustice caused by fault in this statement.
36. By 24 November 2026 the Council has agreed to issue written reminders to relevant officers to ensure they address all the points an applicant has made during a DHP application/review request.
37. The Council should provide us with evidence it has complied with the above actions.

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Decision

38. There was fault by the Council, which caused Ms X an injustice. The Council has agreed to my recommendations and so I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman