Summary: Mr D complained the Council incorrectly refused his housing transfer application. I have not found fault in the Council’s decision to refuse the application but there is fault in the ambiguous wording used in the Council’s decisions and a failure to explain how childcare issues were assessed. The Council has agreed to apologise.

The complaint

1. The complainant (whom I refer to as Mr D) says the Council incorrectly refused his housing transfer applications, from April 2023 onwards, because of rent arrear debt. Mr D says the debts are covered by a Debt Relief Order (DRO) and he does not have the option to pay them back. Mr D also says he should be allowed a transfer to meet childcare needs.

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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 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(i), as amended)

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What I have and have not investigated

4. I have considered how the Council dealt with Mr D’s housing transfer applications. I have looked at events from April 2023 through to December 2024. I have not considered other interactions Mr D has had with the Council, for example any homelessness applications, because these would need to first be complained about to the Council. Any events after December 2024 would also need to be complained about to the Council first before they can be considered by the Ombudsman.

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How I considered this complaint

5. I considered evidence provided by Mr D and the Council as well as relevant law, policy and guidance.
6. I shared my draft decision with both parties and considered their comments.

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What I found

What happened

7. In April 2023 Mr D submitted a housing transfer application to the Council. On 12 April the Council wrote to Mr D. Its records showed Mr D had rent debts at two properties. The Council understood a DRO was in place for September 2021 to September 2022 and so Mr D was not required to pay debt covered by the DRO. However, the Council could take account of multiple debts accruing as part of an overall assessment. The Council then stated that whilst Mr D did not have to pay the debt covered by the DRO he could “voluntarily arrange to set up a payment plan to reduce debt”. His transfer application was refused. Mr D subsequently asked the Council to review its decision. The Council sent its initial review response in June. It detailed Mr D’s rent debts which were covered by the DRO. It said the debts were no longer legally enforceable by the Council, but it could be taken into account as part of the assessment whether to accept the transfer application. The Council said because of the multiple debts at current and previous properties it was correct to refuse the application. Mr D asked the Council to reconsider its decision. The Council sent its final review response on 3 July. It reiterated that rent debts were unsatisfactory conduct and could be considered because they were repeated breaches of the tenancy conditions. In August Mr D was in four weeks rent arrears on his current property.
8. On 21 September the Council wrote to Mr D that eligibility checks on his housing transfer application had found debts and to be considered for a tenancy “you must clear the debt in full”.
9. At the end of April 2024 Mr D submitted a new housing transfer application. At this point he was in five weeks rent arrears. On 22 July a Team Manager advised Officers seeking advice on the case. He said the Council took into account previous debt to prove an applicant was reliable with rent payments. Mr D’s rent payments recently had been inconsistent and in arrears. The Council completed its debt checks on the application at the end of July. It found Mr D was in rent arrears. The Council then notified Mr D his application had been refused. I understand Mr D subsequently agreed to set up a payment plan for his rent and to clear the rent arrears.
10. Mr D asked the Council to review its decision, and it responded on 30 September. It explained Mr D had current rent arrears on his property and reiterated how the Council considered an applicant’s rent debt as part of the transfer application process. The Council said Mr D did not have to pay where debt was covered by a DRO, but he could voluntarily arrange a payment plan to clear his account. Mr D’s payment plan started on 2 October.
11. In December the Council received another housing transfer application from Mr D. He supplied information about his childcare arrangements. At this time, he was in nine weeks rent arrears. On 13 December the Council wrote to Mr D. It had assessed his application and the information he had provided. It noted receipt of the childcare evidence and said this did not change the circumstances of its previous refusals. It did not explain how the childcare evidence had been considered. The Council said it was refusing the current application. It explained Mr D had current rent arrears on his property. Previous debts covered by the DRO did not need to be paid but were still considered as part of the Council’s policy to look at an applicant’s payment history. On 18 December the Council emailed Mr D. His applications had been refused because of multiple debts. A DRO prevented the Council from chasing the debt, but it could still reject the transfer application. The Council said Mr D had the “option to clear the balances outstanding to achieve a move”.

What should have happened

12. A Council tenant can apply to the Council for a housing transfer. The Council will check if the person is eligible including a debt check which considers rent arrears at the current property and former accommodation. The Council’s policy says this is to encourage payment culture and deter non-payments. The Council should assess the applicant’s debt:
• If an applicant has one rent payment in arrears this will not be a barrier to their application.
• Where there are debts up to an equivalent of 13 weeks’ rent on a current or former tenancy the Council should place the applicant in the correct housing band and advise them to make a payment plan. The application is deferred until six months’ payments have been maintained or the debt has been cleared.
• Where there are rent debts over the equivalent of 13 weeks’ rent or debts on more than one tenancy the Council should consider if the applicant has housing need. If they do not have housing need the Council should reject the application.
• If any of the debt is subject to a DRO then a payment plan cannot be made in respect of that part of the debt and the application can be progressed once any other debts have been dealt with.
13. The Council’s policy means that if an applicant has a period of rent arrears covered by a DRO that debt cannot be repaid but can still be considered as part of a tenant’s history of housing related debt. If the applicant has additional rent arrears occurring after the DRO that debt still needs to be repaid to the Council, and the Council can advise the applicant to set up a payment plan to clear any post DRO arrears.
14. The Council will send an applicant the housing transfer decision. If the applicant disagrees with the decision, they can ask the Council to review the case. The Council does this under its two stage complaints process where the case is reviewed by a Senior Officer.
15. Where the Council accepts an applicant is eligible for a housing transfer the application is assessed according to their housing need. The Council’s Allocations Policy sets out the five bands of housing need. Band 1 is the highest priority and Band 5 the lowest. Moving home to be nearer to a child is not a specific housing need under the Allocations Policy. The Council can consider if an applicant has ‘exceptional needs not covered elsewhere’ in Band 4. The Policy also says, ‘there are occasions when unusual circumstances may require individual consideration’. This can include accepting a request for a transfer where the tenant is in rent arrears. The decision must be made by a Senior Officer. Band 5 is awarded to applicants who are adequately housed or have reduced priority because of their previous tenancy history.

Was there fault by the Council

16. There is some fault by the Council because it has failed to clearly explain, in a consistent manner, what rent debt would need to be repaid by Mr D.
17. The Council had the right to consider Mr D’s rent payment history when assessing his transfer application and that included any debts that were covered by a DRO. The DRO prevents a Council asking for a repayment of that money, but it does not prevent the Council from assessing if there is a history of non-payment (which is a breach of tenancy conditions) as part of its eligibility process for a transfer application. This means the Council is not at fault for considering Mr D’s rent debt history and his recent rent debt when deciding to reject his applications. Where a tenant has up to 13 weeks rent arrears, they can set up a payment plan. The Council can then defer the transfer application until either the debt is cleared, or six months continuous payments have been made. If an applicant fails to make each full payment they are in default. In this case Mr D agreed to a payment plan in 2024 and started making payments in October. Only if he maintained six months full payments would the Council then need to consider again whether he was eligible to make a transfer application. For the period I have investigated there was no point at which the Council were required to accept a transfer application because of the debt.
18. The Council cannot ask Mr D to repay the debt covered by the DRO. The Council’s decision letter on 12 April 2023 incorrectly told Mr D he could set up a payment plan to reduce his rent debt. No mention was made about any rent debt not covered by the DRO and so it would be fair to conclude the Council was telling Mr D to pay the debt covered by the DRO. The Council’s subsequent review responses were correct and clear about Mr D not having to repay any rent debt covered by a DRO. Unfortunately, the Council then wrote to him in September again stating Mr D could repay the rent debt without clarifying this only applied to his rent arrears occurring after the DRO. The September 2024 review response to Mr D referred to him being able to make payments to clear his debt. Again, it failed to make clear this only applied to debts Mr D had accrued outside of the DRO (such as rent arrears he had incurred after September 2022). I find the wording of the letter confusing, it can be read as the Council advising him to clear all his debts including those covered by the DRO. Furthermore, the December email to Mr D was unclear. I understand the Council was advising Mr D to clear his recent rent debts, but the email can be interpretated as telling Mr D he can pay the debt covered by the DRO to be eligible for a housing transfer.
19. In December 2024 Mr D asked the Council to allow a transfer application because he had childcare arrangements. The Council’s response on 13 December is insufficient. It refers to the childcare evidence but does not explain how this was considered and why it does not change Mr D’s access to a transfer. The Council has told me that childcare is not a defined housing need under its Allocations Policy. That is correct, but the policy does also refer to exceptional circumstances and the policy does not specifically exclude any issues under this heading. I would expect the Council to explain in its decision letter why it considered the childcare matter did not qualify as an exceptional circumstance.

Did the fault cause an injustice

20. The poor wording in the Council’s decisions at times meant Mr D was left uncertain about whether his applications had been correctly assessed. In addition, the Council failed to explain how it had considered the childcare arrangements in December 2024 and whether Mr D could be considered as having an exceptional need. That meant Mr D did not receive a full explanation and was left uncertain about how the decision was made.

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Action

21. The Council should consider sending Mr D an apology for the unclear wording it used at times in his case. It should also provide a full explanation to Mr D about how the childcare matter was assessed and how the decision was reached. That leaves Mr D with the option of asking for a formal review of the decision if he remains dissatisfied with it.
22. The Council should also remind the relevant officers of its guidance on how to consider a DRO and to ensure any explanations are clear and not open to interpretation.
23. The Council should provide us with evidence it has complied with the above actions within four weeks of the case closing.

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Decision

24. I find fault causing injustice. I have completed the investigation because the Council agrees to the proposed actions.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman