Summary: Following a cyber-attack the Council failed to update its housing register meaning Ms X was unable to make bids for three-bedroom properties. This is fault. The Council’s failure to provide a proper housing allocations service caused Ms X uncertainty because she does not know if she would have secured suitable accommodation before now. The Council was also misleading in its complaints response about whether she would have been the highest bidder for a property. A suitable remedy is agreed.

The complaint

1. Mr Z, on behalf of Ms X, complains that following a cyber-attack the Council refused to update Ms X’s details on the housing register which would have moved her into a higher band.
2. Mr Z says that Ms X has missed out on the offer of a suitable three bedroom house and remains in unsuitable accommodation.

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The Ombudsman’s role and powers

3. 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 the decision making, we cannot question the outcome. (Local Government Act 1974, section 34(3), as amended)
4. Service failure can happen when an organisation fails to provide a service as it should have done because of circumstances outside its control. We do not need to show any blame, intent, flawed policy or process, or bad faith by an organisation to say service failure (fault) has occurred. (Local Government Act 1974, sections 26(1), as amended)
5. 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

6. As part of the investigation, I have:
• considered the complaint and the documents provided by the complainant;
• made enquiries of the Council and considered the comments and documents the Council provided;
• discussed the issues with the complainant;
• discussed the case and proposed remedy with council officers via a Teams meeting; and
• sent my draft decision to both the Council and the complainant and taken account of their comments in reaching my final decision.

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What I found

7. Ms X currently lives with her husband and four children in a one bedroom flat. In July 2020 she was on the Council’s housing register and eligible to bid on available two bedroom accommodation. On 23 July, Ms X gave birth to her third child. This additional child in the family meant that Ms X was then eligible for a three bedroom property. As a result of needing two extra bedrooms, Ms X should have moved into a higher band giving her higher priority for rehousing.
8. However, on 11 October 2020 the Council suffered a cyber-attack which affected many of its computer systems including the housing register. The Council says that its choice based lettings system continued to operate for any housing applicants that were on the system prior to the cyber-attack. However, it was unable to update existing accounts or add new bidding accounts. This meant Ms X’s housing need was not updated from a two bedroom to a three bedroom requirement and she remained in the lower priority band.
9. In response to a complaint made on behalf of Ms X, the Council said in February 2021 that it was unable to run a “shadow system” because its back up system was also severely affected by the cyber-attack. It decided not to set up a contingency system to update bidding accounts as it considered the time taken for a successful bid meant the delay caused by the IT disruption would have no significant effect. It suggested Ms X contact its Housing Options and Advice Team for assistance in securing a larger private sector property.
10. In October 2021 the Council introduced a new housing allocation policy. This reduced the number of priority bands from five to three. The second, third and fourth bands were merged into one band. Ms X argues this reduced her chances of making a successful bid.
11. Ms X escalated her complaint to stage two of the Council’s complaints process as she was dissatisfied with the stage one response. She said that if the Council had updated her details on the housing register then she would have made a successful bid for a three bedroom house. Ms X provided details of one property which she believed she would have been the highest bidder on and therefore, rehoused.
12. The Council replied to Ms X in a letter dated 13 April 2022. It accepted it had not updated Ms X’s housing register file following the birth of her third child but disagreed that Ms X had definitely missed out on an opportunity to be rehoused. In respect of the specific property mentioned by Ms X, the Council said that while Ms X may have been the first placed bidder, she would not have been shortlisted because this was a housing association property and Ms X would not have met its lettings policies.
13. It also explained that in the year 2019/20 a total of 409 properties were available to let of which 63 were three bedroom properties. It said that based on the number of people on the housing register Ms X would have waited approximately two years for a property when in the urgent band under the previous allocation policy. However, after the introduction of the new allocation policy in October 2021, Ms X would now have a waiting time of approximately nine years.
14. The Council said it was not possible to set up a contingency system after the cyber-attack and that it had no option other than to set up a new system from scratch. It said that for most applicants, based on average waiting times, they would not wait longer under the new allocation policy. It explained that under its now allocation policy from October 2021, it no longer deemed households requiring two additional bedrooms to be a higher priority than a homeless applicant in temporary accommodation and also requiring a three bedroom property.
15. The Council accepted that the delay in processing Ms X’s change in circumstances on the housing register coupled with the issues related to the cyber-attack, could have resulted in a disadvantageous outcome in her case. It therefore said it would make a one time direct offer of a suitable three bedroom home to Ms X. It said that due to lack of availability in Ms X’s area of preference then this could take 12 to 18 months. It said this would be considerably quicker than the waiting time on the housing register and places her in the same situation as a higher band applicant.
16. Ms X remained dissatisfied with this response. She said her position remained that she had missed more than one opportunity to be rehoused before the change to the allocation policy in October 2021. She worried that the direct offer of accommodation would move her into an area she does not want to live in. She restated her request for a compensation payment of £10 per day while she remains in unsuitable accommodation. She said she is severely overcrowded as a family of six is living in a one bedroom flat.
17. The Council responded on 6 July 2022. It apologised for the problems associated with the cyber-attack but said this was outside of the Council’s control. It said that it did not consider Ms X had missed out on properties as there were 656 households ahead of Ms X on the housing register waiting for a three bedroom property. It said that under the previous allocation system there were still 174 households ahead of Ms X meaning a waiting time of three years from July 2020. It said it was unable to offer compensation because it was not persuaded Ms X had been disadvantaged in the way she claimed.
18. Dissatisfied with the response, Mr Z complained to the Ombudsman on behalf of Ms X.

Analysis

19. There was a cyber-attack on the Council’s IT systems which meant its housing allocation system could not be updated but it was still able to operate for existing applicants. As a result, Ms X’s change of circumstances following the birth of her third child could not be inputted and she was not moved into a higher band or able to bid on three-bedroom properties. I accept this was not an intentional act by the Council but it did not have an operational system which was service failure. I find there was fault by the Council that had a direct impact on Ms X.
20. In response to Ms X’s complaints, the Council says that it did not consider she had missed out on a suitable property. However, in response to my enquiries on this complaint, the Council said Ms X probably would have been the highest bidder on a property in her preferred area. Based on the information provided by the Council, I took the view Ms X had missed out on a suitable property in September 2021 and I sent a draft decision statement and recommended a remedy for the injustice caused.
21. The Council disagreed with the proposed remedy and a meeting was held between ourselves and council officers to discuss this. At this meeting, the Council changed its position and said it no longer considered Ms X had missed out on a suitable property. It says that other residents were similarly affected meaning that approximately 550 households had a change in circumstances that could not be updated because of the cyber-attack. The Council says some of these will be in need of a three bedroom property and so Ms X may not have been the highest bidder if all the changes in circumstances had been processed in a timely way.
22. I agree with the Council’s explanation and my view is that there is no way to say with any certainty that Ms X did miss out on a property because of the cyber-attack and the failure to update her change in circumstances. However, its response to my enquiries was misleading and resulted in me taking a position which raised Ms X’s expectations. This is fault.
23. The Council has already offered Ms X a direct let and I welcome this action. However, I note this offer will not be made for a least a year and that there are 262 households ahead of Ms X who are also waiting for a direct offer. I am therefore not persuaded this is a suitable remedy for the injustice caused by the Council’s fault and make further recommendations below.

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Agreed action

24. To remedy the injustice caused to Ms X and her family as a result of the fault described above the Council will, within one month of my final decision, take the following action;
• Provide a written apology to Ms X;
• Pay Ms X £500 for her uncertainty;
• Pay Ms X £250 for her raised expectations and time and trouble in pursuing this complaint; and
• Keep Ms X updated on a regular basis regarding her likelihood of receiving a direct offer. Let us know how the Council intends to do this.
25. The Council should provide us with evidence it has complied with the above actions.

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Final decision

26. I have completed my investigation with a finding of fault for the reasons explained in this statement. The Council has agreed to implement the actions I have recommended. These appropriately remedy any injustice caused by fault.

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Investigator's decision on behalf of the Ombudsman