The Ombudsman's final decision:
Summary: Mrs B complains the Council did not ensure the provider of temporary accommodation kept to the terms of the agreement she had with the Council for the payment of all utilities. Mrs B complained to the Property Ombudsman, had to pay extra for her utility supplies, and had time and trouble in resolving the matter. There was fault by the Council in the license agreement it had with Mrs B for the provision of temporary accommodation as it did not make clear the payment for utilities would be capped. There was fault by the Agent acting on behalf of the Council in paying for utilities. The Council should pay Mrs B £200 within one month of the date of the final decision. It will also undertake an affordability assessment of the property based on information provided by Mrs B.
- Mrs B complains the Council did not ensure the provider of temporary accommodation kept to the terms of the agreement she had with the Council. The agreement said all utilities were included in the rent but the provider did not do that. When Mrs B complained the Council referred her back to the provider. Mrs B had to make a complaint to the Property Ombudsman, had to pay extra for her utility supplies, has had an adverse credit rating because of missed utility payments and has suffered stress and worry.
The Ombudsman’s role and powers
- We investigate complaints about councils and certain other bodies. Where an individual, organisation or private company is providing services on behalf of a council, we can investigate complaints about the actions of these providers. (Local Government Act 1974, section 25(7), as amended)
- 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)
- 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 the complaint and spoke to Mrs B. I asked the Council for its comments on the complaint and additional information. I sent a copy of a draft of this statement to Mrs B and the Council and invited their comments.
What I found
- The Council has said that most agents who provide temporary accommodation do so on the basis that utilities are extra. But this Agent chooses to include utilities. The Agent will only cover what it considers to be reasonable utility charges and anything over that expects the occupier to pay. The Council has commented that this is not ideal but it is not unreasonable for the agent not to meet unlimited energy or other utility bills
What happened here
- Mrs B and her family were homeless. The Council accepted it had a homelessness duty to her and offered her temporary accommodation. The Council arranged for them to stay in nightly paid accommodation provided by the Agent. The licence agreement Mrs B signed with the Council showed the rent for the property and that it was inclusive of utilities.
- When Mrs B moved in the water account was set up in her name and she made payments for water which the Agent took over. Mrs B says there is a period which was not covered by the Agent. The Agent arranged to put the property on to a smart meter for gas and electricity and to pay £80 a month. Mrs B says that is not sufficient to cover the total annual cost of gas and electricity.
- Mrs B asked the Council to resolve the issues she was having with the Agent. The Council contacted and met with the Agent. While the Council was waiting for a response from the Agent Mrs B made a complaint to the Tenant Property Ombudsman who contacted the Agent.
- The Agent’s position is there are no outstanding liabilities for utilities at the property and that it pays £80 a month directly on to the smart meter for gas and electricity which it considers to be reasonable.
- The Council has an arrangement with the provider of this and other accommodation on the basis that utilities are included. I accept this is not the Council’s preferred practice and it is because it is the only basis on which the supplier will provide accommodation.
- The Council has accepted the licence agreement the occupier signed was not as clear as it could be. That is fault. The Council should be clear in the agreement it has with the occupier on the amount of utility charges the agent will cover. It is a fundamental principle that someone entering into an agreement should have all the necessary information about the terms of the agreement.
- This means that when Mrs B moved in she expected that all her utility costs would be covered. This has not been the case and she has had to top up the smart meter. There is also an issue with the water where she says there is a small amount from when she moved first moved in where the agent has not covered the charge.
- The Council has said it will review the proportion of accommodation offered as inclusive of utilities and put in place a plan to reduce over time the number of new and current bookings made on that basis. It has reviewed the licence agreement with occupiers and ensures new occupiers are told utility contribution may be subject to a reasonable use limitation. The Council is also considering refusing to make new bookings with this Agent on an inclusive basis. And will explore with the Agent whether it will convert existing inclusive accommodation to exclusive of utilities.
- Had there been no fault Mrs B would have moved into the property knowing the gas and electricity supply was limited to £80 and anything above that she would have to pay. I have no grounds to say that limiting it to £80 is wrong but Mrs B should have known the position. The Council has explained that were Mrs B living in similar accommodation where utilities were not included then her rent would be the same. So, in effect, she has the benefit of no charge for council tax, water and an allowance of £80 towards gas and electric. The cost of those charges is absorbed by the Council because the rent it can charge to Mrs B is capped. Therefore I do not consider there are grounds to say the Council should meet the extra charges as Mrs B is in a better position than she would otherwise be.
- Mrs B says that she appealed about the suitability of the accommodation. Her main argument was that the location of the property was too far from the children’s schools and the family’s support network. The Council did not uphold the appeal. Mrs B did not make an argument about affordability then as she thought all her utility costs would be met by the Agent. She says that had she known the true position she would have included that in her appeal. I cannot say that had Mrs B made these arguments in her appeal it would have altered the outcome. The Council has said that it will now assess the affordability of the property taking into account the utility costs and the travel costs based on information supplied by Mrs B. I consider this is a sensible way forward and there is no more I can achieve on this point.
- Mrs B has had considerable time and trouble pursuing this matter with the Council, the Agents and then with the Property Services Ombudsman. The Agents did not have proper arrangements in place to ensure the gas, electric and water bills were paid from the beginning of Mrs B’s occupation. As the Agent is acting for and on behalf of the Council I consider we can look to the Council to provide some remedy to Mrs B for the problems she experienced in resolving these matters. I consider the Council should pay Mrs B £150 in recognition of the problems she had.
- Mrs B’s has provided evidence to show her credit record was affected by the matters referred to in this complaint. The Council has agreed to pay an additional £50 in recognition of that.
- The Council will pay Mrs B £200.
- The Council has confirmed it will do all it can to reduce the number of properties it provides inclusive of utilities.
- It has amended the licence agreement for new occupiers to show what charges are covered by the provider.
- There was fault by the Council in the license agreement it had with Mrs B for the provision of temporary accommodation as it did not make clear the payment for utilities would be capped. There was fault by the Agent acting on behalf of the Council in paying for utilities. The Council should pay Mrs B £200 within one month of the date of the final decision. It will also undertake an affordability assessment of the property based on information provided by Mrs B.
- The Council has agreed to continue the work it has started to reduce the number of properties it provides inclusive of utilities. And has amended the licence agreement for new occupiers to show what charges are covered by the provider.
Investigator's decision on behalf of the Ombudsman