Summary: Mr Y, a solicitor, complained on behalf of Ms X about the Council’s handling of her homeless application in 2022. We find the Council at fault, which resulted in Ms X signing a tenancy she could not afford. The Council has apologised, made a suitable payment to Ms X, and provided her with a direct offer of social housing, which is satisfactory to remedy the injustice caused.

The complaint

1. Mr Y, a solicitor, complained on behalf of Ms X about the handling of her homelessness application in 2022. Mr Y says the Council failed to identify that Ms X was subject to the benefit cap.
2. As a result, Ms X signed an unaffordable tenancy agreement, which led her to fall into rent arrears.
3. Mr Y also complained that due to the errors, Ms X has missed an offer of social housing.

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The Ombudsman’s role and powers

4. 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 how the organisation made its decision, we cannot question the outcome. (Local Government Act 1974, section 34(3), 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. I considered the complaint and information Mr Y provided.
7. I made written enquiries of the Council and considered its response along with relevant law and guidance.
8. I referred to the Ombudsman Guidance on Remedies, (a copy of which can be found on our website).
9. Mr Y and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Homelessness law and guidance

10. Part 7 of the Housing Act 1996 and the Homelessness Code of Guidance for Local Authorities set out councils’ powers and duties to people who are homeless or threatened with homelessness.
11. Someone is threatened with homelessness if, when asking for assistance from the council on or after 3 April 2018:
• they are likely to become homeless within 56 days; or
• they have been served with a valid Section 21 notice which will expire within 56 days. (Housing Act 1996, section 175(4) & (5)
12. If councils are satisfied applicants are threatened with homelessness and eligible for assistance, they must help the applicants to secure that accommodation does not stop being available for their occupation. In deciding what steps they are to take, councils must have regard to their assessments of the applicants’ cases. (Housing Act 1996, section 195)
13. If a council is satisfied an applicant is homeless, eligible for assistance, and has a priority need the council has a duty to secure that accommodation is available for their occupation (unless it refers the application to another housing authority under section 198). But councils will not owe the main housing duty to applicants who have turned down a suitable final accommodation offer or a Housing Act Part 6 offer made during the relief stage, or if a council has given them notice under section 193B(2) due to their deliberate and unreasonable refusal to co-operate. (Housing Act 1996, section 193 and Homelessness Code of Guidance 15.39)

Housing allocations

14. Every local housing authority must publish an allocations scheme that sets out how it prioritises applicants, and its procedures for allocating housing. All allocations must be made in strict accordance with the published scheme. (Housing Act 1996, section 166A(1) & (14))
15. An allocations scheme must give reasonable preference to applicants in the following categories:
• homeless people;
• people in insanitary, overcrowded or unsatisfactory housing;
• people who need to move on medical or welfare grounds;
• people who need to move to avoid hardship to themselves or others. (Housing Act 1996, section 166A(3))

What happened

16. In September 2020, Ms X moved into a private rented, self-contained bedsit.
17. In August 2022, Ms X received a Section 21 notice from her landlord. Later that month, she submitted an online homelessness application to the Council.
18. The Council assessed Ms X’s application and accepted the statutory duty to prevent her homelessness.
19. As part of the prevention duty the Council negotiated a verbal agreement with the landlord who agreed a rent increase to £1100 per month to allow Ms X to remain in the property.
20. In September 2022, the Council told Ms X about the proposed rent increase and advised her that it was below her Local Housing Allowance entitlement. Ms X confirmed the rent was affordable and agreed to renew the tenancy. The Council then closed Ms X’s case and ended its prevention duty, as she had suitable accommodation available for at least 6 months.
21. Later that month, Ms X signed the new tenancy agreement which detailed the rent would be £1200 per month.
22. In November 2023, a housing action group complained to the Council on Ms X’s behalf. They said the rent increase agreed by the Council in 2022 was unaffordable and the Council failed to consider if Ms X was affected by the benefit cap. As a result, Ms X was left without enough money for basic supplies causing her to go into rent arrears. The group asked for the Council to accept the main housing duty to Ms X to put her back in the position she should have been in 2022.
23. Later that month, Ms X submitted a new homelessness application. She had been served with another Section 21 notice in July 2023, which expired in September 2023. During its assessment, the Council contacted the landlord, who agreed to let Ms X remain in the property while the Council explored rehousing options.
24. At the end of November 2023, the Council responded to the housing action group’s complaint. It accepted errors were made during the assessment, and it missed important information in the suitability and affordability assessment. It shared a new homelessness application was in progress and offered to provide temporary accommodation as part of the ongoing homelessness assessment, if preferred. The Council also agreed to:
• pay the ongoing shortfall in rent;
• pay the rent arrears which had been confirmed by the landlord as £1893.51; and
• offered Ms X £1000 to remedy the financial inconvenience caused by the error.
25. In January 2023, after discussing the case with Ms X, the housing action group escalated the complaint to stage 2. They said Ms X had been living in unsuitable accommodation due to the unaffordability and had been disadvantaged as she is no longer in priority need. They asked for the Council to:
• accept the main housing duty;
• provide an offer of temporary accommodation;
• place Ms X in Band A on its housing register;
• backdate Ms X’s effective date to October 2022; and
• make Ms X a direct offer of one-bedroom social housing.
26. In February 2024, the Council provided its final response to the complaint. In addition to the financial remedies offered earlier, the Council said it had since accepted the main housing duty and placed Ms X in Band B on the housing register with an effective date of October 2022. The Council explained that, if the main housing duty had been accepted in 2022, Ms X would not have received an offer of social housing to date, so it would not be making her a direct offer. The Council said it had offered Ms X temporary accommodation in February, which she declined, but was willing to make a further offer of temporary accommodation at her request. The Council also shared further training had been provided to staff to ensure applicants are assessed accurately.
27. In May 2024, Mr Y brought the complaint to the Ombudsman. He complained that Ms X was in unsuitable accommodation for 15 months longer than necessary, so should receive a higher financial remedy. He also cited a Freedom of Information request showing the people assessed as needing a studio flat had been offered one-bedroom properties, even with more recent effective dates than Ms X. Mr Y believed this meant Ms X had missed out on an offer of social housing and requested the Council make her a direct offer.

My findings

28. The Council has accepted faults were made in the assessment of Ms X’s homelessness.
29. The Council did not consider or discuss the benefit cap with Ms X during the suitability and affordability assessment. This is fault and led to an unaffordable rent increase being agreed.
30. The Council only had a verbal agreement with the landlord regarding the rent increase. This is fault. The landlord later increased the agreed amount. Mr Y said Ms X signed the tenancy believing the agreed amount was £1200. Unable to afford the rent increase, Ms X fell into rent arrears. In recognition of the fault, the Council offered to pay the outstanding rent arrears of £1,856.23. I consider the Council’s remedy to be suitable.
31. The Council also offered Ms X £1000 to remedy the financial inconvenience caused by the error. Mr Y has requested a higher remedy, as he believed the accommodation was unsuitable because of its unaffordability. However, I do not agree that the accommodation was unsuitable, as Ms X had been living there without issue before the Council’s involvement. Therefore, a remedy for unsuitable accommodation is not appropriate. I consider this payment to be for distress. The Council’s offer exceeds the amount we would normally recommend up to, and I do not find a higher remedy to be appropriate. I consider the Council’s remedy to be suitable.
32. The Council acknowledged that if it would have assessed Ms X correctly in 2022, it would have accepted the main housing duty, provided temporary accommodation, and placed her in Band B on its housing register. When Ms X submitted her homelessness application in November 2023, she was no longer in priority need. Therefore a homelessness application would not have resulted in temporary accommodation or the Council accepting the main housing duty. To remedy this, the Council accepted the main housing duty, placed Ms X in Band B with an effective date in October 2022, and offered her temporary accommodation. I consider the Council’s remedy to be suitable.
33. The Council has provided evidence showing that Ms X has not missed out on an offer of social housing since October 2022. However, since the complaint was brought to the Ombudsman, Ms X has received and accepted an offer of a one-bedroom property, and has moved in.
34. Based on the above findings, I consider the Council’s actions and remedies to be suitable and in line with our Guidance on Remedies. There is no outstanding injustice to Ms X.

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Final decision

35. I have completed my investigation. There was fault by the Council. The remedy provided is suitable for the injustice caused.

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Investigator's decision on behalf of the Ombudsman