Birmingham City Council (19 019 555)

Category : Housing > Homelessness

Decision : Upheld

Decision date : 25 Jun 2021

The Ombudsman's final decision:

Summary: We find fault with the Council for failing to take action when it decided Miss C’s temporary accommodation was unaffordable. It also failed to tell Miss C about her right to request a suitability review. This caused Miss C distress and she missed out on an offer of permanent accommodation because of her rent arrears. The Council agrees actions to remedy the injustice.

The complaint

  1. Mr B complains on behalf of Miss C. Mr B complains the Council placed Miss C in unaffordable accommodation and failed to tell her about her right of review.
  2. He says because of this Miss C suffered distress because of the financial burden and missed out on a property because of the arrears on her rent account.

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The Ombudsman’s role and powers

  1. 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 an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
  2. 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

  1. I considered the information from Mr B. I made enquiries with the Council and considered its response with the relevant law and guidance.
  2. Mr B, Miss C and the Council had the opportunity to comment on my draft decision. I carefully considered all the comments I received.

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What I found

Law and guidance

  1. The Housing Act 1996 (part 7) is the core legislation that outlines a council’s duty to those that are homeless.
  2. If the council accepts a duty to house someone when they are homeless it might offer temporary housing until longer term accommodation is available.
  3. Temporary housing can include:
    • a private flat
    • a council or housing association flat
    • housing with support
  4. Once a council accepts a full duty to a homeless person, that person has a right to a review of the suitability of their accommodation. If they are unhappy with the outcome of the review they can appeal to the county court.
  5. In determining whether accommodation is suitable a council must take into account affordability. In particular it must consider:
    • financial resources available to the applicant;
    • costs in respect of the accommodation;
    • maintenance and child support payments; and
    • the applicant's reasonable living expenses.
  6. The property may be unsuitable if it is:
    • unaffordable;
    • overcrowded;
    • in need of repairs or in poor condition;
    • inaccessible because of a disability or health condition; or
    • too far from your place of work or your children's schools.
  7. If someone refuses an offer of temporary accommodation the council may not make another offer.
  8. A discretionary housing payment (DHP) is an extra payment a council can make if someone is struggling to pay their rent. It does not have to be repaid.
  9. Birmingham City Council apply a dispersed accommodation charge (DAC) to temporary accommodation to cover the cost of additional services such as furniture, management services and repairs. The DAC is part of the rental charge. It is reviewed annually and approved by Cabinet.

What happened

  1. Miss C became homeless in 2018 and the Council accepted its duty to house her while it assessed her eligibility for the main housing duty. It placed her in interim accommodation. This became her temporary accommodation when it found she was eligible for help under section 193(2) of the Housing Act 1996.
  2. It said it considered the weekly rental charge of £249.53 was affordable for Miss C. It also said if she refused the offer it could end its duty.
  3. In July 2019 Miss C’s Member of Parliament (MP) wrote to the Council on behalf of Miss C. They told the Council the rent was too high for Miss C to afford. The Council said it would find alternative temporary accommodation.
  4. In August 2019 Mr B wrote to the Council on behalf of Miss C. He asked the Council to review the suitability of the accomodation because it was unaffordable. He provided income and expenditure forms.
  5. The Council reviewed the suitability. It found the rent was unaffordable. It said it would waive DAC and write off the rent arrears. It said the rent would be affordable without the DAC as the majority would be covered by housing benefit.
  6. In April 2020 Mr B complained to the Council on behalf of Miss C. He said the Council continued to charge Miss C the DAC and this caused her financial hardship.
  7. In its complaint response the Council said it awarded Miss C a DHP to reduce the shortfall between her rent charge and housing benefit. It said the DHP was not an ongoing entitlement and Miss C should try to secure cheaper accommodation. It said Miss C’s rent account was £600.53 in arrears.
  8. In response to my enquiries the Council said the case “was not handled as well as it should have been”. It also accepted Miss C missed out on a permanent property because of her rent arrears.
  9. The Council offered to:
    • Apologise to Miss C for the frustration she has endured in bringing this complaint; and agree to pay her some compensation for the disadvantage she has experienced in securing permanent accommodation.
    • Write off all arrears across both rent accounts; and absorb any rent not covered until a move can be facilitated.
    • Ensure support is provided to Miss C not only to assist with the completion of future benefit claims but also to source permanent accommodation.
    • Undertake an internal review of the appropriate letters to ensure that information on an applicant’s review rights is included.

My findings

  1. I find fault with the Council. It reviewed the suitability in August 2019 and found it was unaffordable. It told Miss C it would write off her arrears and remove the DAC. It took until February 2020 to write off the debt. Instead of removing the DAC it continued to add this charge and award Miss C a DHP.
  2. The DHP did not cover the shortfall in full so Miss C continued to accrue arrears on her account.
  3. The Council should have ensured the information it told Miss C in its review response in August 2019 was carried out. It misled Miss C and caused her significant distress by causing her financial hardship and uncertainty over a prolonged period.
  4. It caused her to miss out on a property she was offered. The landlord withdrew the offer because of her rent arrears.
  5. It also failed to tell Miss C of her right to a review of the suitability. This is fault.
  6. We welcome the Councils acknowledgement of the way the case was handled and the actions it has suggested to remedy the injustice to Miss C.

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Agreed action

  1. Within one month of my decision the Council agrees to:
    • Apologise to Miss C for the faults identified in this statement.
    • Pay Miss C £1500 in recognition of the distress, hardship and inconvenience it caused her.
    • Write off all the arrears across both of Miss C’s rent accounts. Ensure there is no shortfall in rent payments until Miss C is offered permanent accommodation.
    • Ensure Miss C is supported with future benefit claims and to source permanent accommodation.
    • Make Miss C a direct offer when the next suitable property becomes available.
  2. Within two months of my final decision the Council agrees to:
    • Undertake an internal review of the appropriate letters to ensure information on an applicant’s review rights is included.
    • Review the information it provides to tenants about dispersed accommodation charges. This should be open and transparent.
    • Review how it identifies and addresses affordability issues for tenants in temporary accommodation. The Council should identify what changes are needed and set out the timescales for these changes.
  3. The Council should provide the Ombudsman with evidence it has completed the agreed actions.

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Final decision

  1. I find fault with the Council causing injustice.

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Investigator's decision on behalf of the Ombudsman

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