The Ombudsman's final decision:
Summary: The Ombudsman finds fault with the Council for how it handled the decision to take continuing enforcement action against the complainant for unpaid Council Tax, and for the delay in communicating with the complainant about this. This caused the complainant and her family distress. The Council has agreed to pay the complainant a financial remedy and carry out a service review.
- Miss A complains the Council continues to take enforcement action against her for a debt that she is unable to pay.
- Miss A complains that she has proved on multiple occasions to the Council that she in vulnerable and that her expenses are higher than her income.
- Miss A complains the continued enforcement action is having a significant impact on her health and wellbeing, and the mental health of her son.
The Ombudsman’s role and powers
- We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. 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)
- 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)
- 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
- I considered Miss A’s complaint and information she provided. I also considered information provided by the Council. I considered comments on my draft decision from Miss A and the Council before making my final decision.
What I found
Council Tax debt
- The Council Tax (Administration and Enforcement) Regulations cover both the way councils collect payments of council tax and the way councils can recover council tax debt.
- To use the various powers available to it to recover unpaid council tax, a Council must apply to the Magistrates Court for a liability order against the person or persons it believes should have paid the bill.
- Once a Council has got a liability order it can begin legal recovery action and there is no timeframe in which it must collect the debt.
- Recovery action can take many different forms. Councils will often use enforcement agents to recover debt. The law sets out the fees an enforcement agent can charge when recovering debt.
- Between 2014 and 2018, Miss A amassed Council tax debt from failing to pay Council at a property she previously lived in.
- Miss A did not pay the debt and failed to respond to the Council’s asks for financial information. The Council got liability orders for the debt and the debt was passed to an enforcement agency.
- Miss A tried to negotiate a payment plan with the Council. She provided financial assessment. The Council calculated she could pay £115 instalments towards the debt. Miss A said she could only afford to pay £50 instalments. The Council did not accept this proposed payment plan. Miss A paid two instalments of £50, but failed to make any more payments.
- Miss A could not pay the enforcement agency. The agency accepted it could not recover the debt from Miss A. The agency returned the debt to the Council in April 2018 and cancelled their fees.
- The Council contacted Miss A in April 2019 and advised that she was still liable for the debt. It gave her 14 days to pay the balance before it again sent the debt to a second enforcement agency.
- The Council sent the rest of the debt to a second enforcement agency. The second enforcement agency also returned the debt to the Council as it accepted Miss A could not pay the debt.
- The Council again asked Miss A for financial information, Miss A provided some financial information but did not provide her bank statements as requested.
- The Council accepted that Miss A’s circumstances had changed and offered a new payment plan of £5 instalments. Miss A advised that she could not pay this.
- The Council sent the debt to a third enforcement agency. It did not tell Miss A that it had done this.
- Miss A contacted the Council to ask why a third agency was collecting the debt. Miss A felt that she had proved multiple times that she could not afford the debt, and the continued action taken by the Council was causing distress and impacting her and her son’s disabilities.
- Miss A complained to the Council about its decision to chase the debt. Miss A did not dispute that she owed the debt, but complained that she had proved multiple times that she could not afford to pay it. She did not agree with the Council’s decision to send the debt to a third debt collection, and therefore did not agree she was liable for their fees.
- In its final complaint response, the Council accepted that Miss A suffered from continuing health problems, but said that it needed further information from her about her finances, or the action from the third enforcement agency would resume.
- Miss A’s local Member of Parliament also wrote to the Council to advocate on her behalf, and asked the Council to reconsider the enforcement agency fees that had been added to the debt.
- The Council were also contacted by Miss A’s legal representative, and by the local citizens advice explaining that Miss A and her son were vulnerable and had continuing health issues.
- In July 2020, Miss A paid the Council the rest of the original debt. She did not pay the outstanding amount for enforcement agency fees as she felt this action was unnecessary by the Council.
- The Council remained of the view Miss A must pay the agency fees. Miss A complained to the Ombudsman about the Council’s decision to pursue the debt through a third enforcement agency.
- During the Ombudsman’s investigation, the Council agreed to clear the outstanding debt owed by Miss A as a gesture of good will, therefore stopping enforcement action.
- The Ombudsman has discretion to investigate complaints that are about issues older than 12 months.
- The Council has been pursuing Miss A for the debt of unpaid Council Tax since 2015, however, most of Miss A’s complaint is about the Council’s decision to pursue the debt from 2018 onward, so this is where I will start my investigation from.
- The debt was returned to the Council by the first enforcement agency in April 2018 who concluded they could not recover the debt.
- The Council then did not communicate with Miss A for a year, until April 2019 when it told Miss A she was still liable for the debt, and asked her to pay.
- It is my view that if Miss A was told by the first enforcement agency that it accepted she could not pay the debt, and then did not hear from the Council about it, it is likely she thought she would not be pursued further.
- However, where a Council gets a liability order for a debt, there is no time frame for which the Council must collect the debt. Therefore, the Council was entitled to chase the debt despite allowing a significant of time to pass without contacting Miss A.
- The Council should have communicated in a timelier manner with Miss A about the outstanding debt. The failure to do so was fault by the Council.
- The Council wrote to Miss A and told her she was still liable. It sent the debt to a second enforcement agency who returned the debt to the Council as it also decided it could not recover the debt.
- The Council then sent the debt to a third enforcement agency.
- The Council has a legal right to collect unpaid Council Tax and can employ the method of enforcement agencies to do this. However, the Ombudsman also expects Councils to take reasonable steps to consider any vulnerabilities a debtor may have.
- The Council has said it told the third enforcement agency of Miss A’s vulnerabilities. It has also shown that it did place multiple holds on action while it tried to communicate with Miss A. The Council said that Miss A often did not respond to requests for more information on her circumstances.
- Considering the delay in communicating with Miss A about the debt between April 2018 and April 2019, and having two enforcement agents return the debt, it is my view the Council could have given more consideration to Miss A and the evidence that she was vulnerable and could not pay.
- Miss A has since paid an amount equal to the original debt, and the Council has cleared the outstanding agency fees as a gesture of goodwill. However, in light of the decisions by the previous enforcement agencies, the communications from Miss A and those advocating on her behalf, it is my view the Council could have considered this earlier. This is fault by the Council and has caused Miss A distress.
- The Council has agreed to carry out the following recommendations and provide evidence of doing so.
- Within 4 weeks of my final decision, write to Miss A and apologise for how it handled the outstanding debt and its communication to her. The Council will also pay Miss A £100 in recognition of the distress caused by this.
- Within 12 weeks of my final decision, the Council will also review how it manages communication about outstanding debts, to ensure long periods of time without communication are avoided.
- I find fault with the Council for how it handled the decision to continue enforcement action, and for how it communicated to Miss A about the action being taken. This caused Miss A and her son distress.
Investigator’s decision on behalf of the Ombudsman
Investigator's decision on behalf of the Ombudsman