Summary: There was no significant fault in how the Council handled payments to a Business Improvement District levy account. For this reason, the Ombudsman has completed his investigation.

The complaint

1. The complainant is represented by his daughter. I will refer to them as Mr F and Ms B respectively.
2. Ms B complains the Council obtained a Liability Order for a debt on Mr F’s Business Improvement District (BID) levy account, and then passed it to an enforcement agency. She says the debt had already been paid, and that both the Council and enforcement agency had been sending correspondence to the wrong address.

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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. 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 reviewed Ms B’s correspondence with the Council, a breakdown of Mr F’s payments over several years, copies of the BID levy demands for 2016/17, 2017/18 and 2018/19, and of the reminders and summons sent to Mr F, and the Council’s case notes.
5. I also sent a draft copy of my decision to both parties for their comments.

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What I found

6. Mr F owns a takeaway food company, which has two outlets. One is in Lambeth, and is the premises to which the BID levy applies. The other is in Wandsworth, a different authority area. The Wandsworth outlet is also the registered business address.
7. On 7 April 2017, the Council sent a demand for the 2017/18 BID levy to the Wandsworth outlet. It said the levy for the year was £344.25. The first instalment of £172.25 was payable by 21 April, and the second of £172 was payable by 1 October.
8. On 22 May, the Council issued a reminder notice, as it had not received the first instalment. Mr F paid this on 7 June.
9. On 20 November, the Council again issued a reminder notice, as it had not received the second instalment.
10. On 7 February 2018, the Council says it sent a final notice, asking for the outstanding balance to be paid in seven days, and warning recovery action would start if it was not. Ms B says they did not receive any such letter.
11. On 13 March, the Council issued the demand for 2018/19. This was also for £344.25, with payments due on 1 April and 1 October respectively.
12. On 16 March, Mr F paid £344.25. The Council’s system allocated this to the 2018/19 account and closed it. The second payment for 2017/18 remained unpaid.
13. On 3 May, the Council sent a summons, explaining that it had added £145 costs to the outstanding debt, and that Mr F now owed £317. The summons said Mr F could attend magistrates court on 25 May to explain why a Liability Order should not be issued.
14. After obtaining a Liability Order, the Council passed the debt to an enforcement agency. The debt was now £342.
15. Having received correspondence from the enforcement agency, Ms B called the Council on 7 August. She said the BID levy for 2017/18 had been paid, and that Mr F always paid his bill in full when he received it. The Council explained that it had only received half the payment, and the half due in October remained outstanding.
16. Ms B immediately paid £172.25 to clear the debt, but said she would make a complaint as she felt her father was being treated unfairly. She asked for a copy of the call recording when Mr F had made the payment in June 2017. The Council agreed to hold the enforcement action while her complaint was being investigated.
17. The Council responded to the complaint on 25 October. It set out a chronology of events, and said Mr B’s payment of June 2017 had been made bank transfer and not over the phone. It also said it had no record of any phone calls from Mr B at all with respect to the 2017/18 levy.
18. The Council considered it had followed the correct procedures with respect to the debt, and so did not uphold the complaint. It said it would now lift the suspension on the enforcement action. Although the Council had informed the enforcement agency that the levy debt itself had been paid, the agency would continue to pursue the outstanding court costs and its own fees.
19. Ms B made a complaint to the Ombudsman on 30 October.

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Analysis

20. Ms B says Mr F believed he had paid the full year’s levy in June 2017. She says he had always made a single full payment in previous years, and did not know anything was outstanding until he received a letter from the enforcement agency. She says the Council should have cleared the 2017/18 debt when Mr F paid in March 2018, and had it done so, he would not have incurred court costs and enforcement fees.
21. Ms B also says she has previously asked the Council to send correspondence to the Lambeth outlet’s address. This is because the Wandsworth outlet shares its address with a block of residential flats, to which they do not have access, and its post is sometimes delivered there.
22. There is a set process which authorities must follow when pursuing a debt for business rates (including a BID levy), which is similar to the process for council tax debt. In this instance, I can see no fault in how the Council pursued the debt.
23. Ms B says Mr F believed he had paid the full year’s levy in June 2017, when in fact he had only paid the first instalment.
24. I have reviewed the breakdown of Mr F’s payments, going back to 2014/15. While it is true he had always previously paid the full year in one go, this appears to be because his payments were always made some time after the second instalment had also become due. Mr F paid the 2014/15 levy in March 2016, the 2015/16 levy also in March 2016, and the 2016/17 levy in January 2017.
25. So it was only in 2017/18 that Mr F paid when only the first half of the levy was due. This may explain his confusion about what he had paid.
26. Whatever the reason, I cannot say it was the Council’s fault Mr F was unaware he had only paid half the levy in June 2017. It is Mr F’s responsibility to keep track of his accounts, and, at that point, there was no reason for the Council to alert him he had only paid half, as that was all it was expecting.
27. The Council issued the demand for 2018/19 on 13 March 2018. Three days later, Mr F paid the full amount. Ms B believes the Council should have allocated half to of this to the 2017/18 account, clearing it, and the other half to pay the first instalment of the 2018/19 account.
28. I can appreciate the logic of this. Mr F had, essentially, paid everything he owed at that point. However, the fact remains the Council had issued a demand to Mr F for £344.25 on 13 March, and three days later, received £344.25 from him.
29. It is clear Mr F was still, at this point, unaware he had only paid half of the 2017/18 levy, and so he evidently did not ask the Council to treat his March payment as ‘half and half’. Without such an instruction, I cannot say it was fault for the Council to assume Mr F was paying the money for which it had just sent him a demand.
30. Ms B also says the Council, and then the enforcement agency, repeatedly sent correspondence to the Wandsworth address. This meant it was sometimes delivered to the flats, rather than the business, and so they did not receive it.
31. The Council has provided me with copies of its initial demands for 2016/17, 2017/18 and 2018/19, along with the reminder notices, summons and the notice of enforcement sent by the agency on 14 July 2018. All documents have the same address, with the name of Mr F’s business printed clearly at the top.
32. Ms B says she has asked the Council a number of times to use the Lambeth address for correspondence, instead of the Wandsworth address. But the Council says the only record it has of this was in an email of November 2018, where Ms B asked for a copy of the Liability Order to be sent to the Lambeth address. It has given me a copy of this email.
33. I cannot say the Council, or agency, is at fault for posting correspondence to what is, without question, the correct address. This is especially so when considering that Mr F has obviously received at least some of this correspondence in the past, such as the reminder notice for the first 2017/18 instalment. The Council had no reason to believe Mr F was not receiving its correspondence.
34. And I have seen no other evidence that Ms B, or Mr F, have previously asked the Council to use the Lambeth address instead of the Wandsworth one.
35. There is one minor element of fault by the Council here. When Ms B contacted the Council in August 2018, it told her the outstanding debt for 2017/18 (not including the costs and enforcement fees) was £172.25, which she paid. In fact, the correct figure was £172, as Mr F had paid the extra 25p with the first instalment.
36. However, I do not consider this to represent a significant injustice, nor do I consider it significant enough to merit a formal finding of fault.

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Summary

37. I appreciate Ms B’s dissatisfaction the Council allocated the March 2018 payment fully to the 2018/19 account, rather than using half of it to clear the 2017/18 account. This is unfortunate, as the subsequent costs and fees would have been avoided if so; but without clear instructions from Mr F that this was his intention, I cannot find fault the Council did not do so.
38. Ultimately, Mr F had a responsibility to be aware of what he had paid and what he still owed. It is not the Council’s fault he was not. It is also not the Council’s fault Mr F did not always receive its correspondence.
39. I accept that Ms B overpaid 25p on the outstanding debt, but this is not a significant matter and so I will not investigate it further.

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Final decision

40. I have completed my investigation with a finding of no fault.

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Investigator's decision on behalf of the Ombudsman