Summary: Ms B complains that the Council misled her as to when it would pay a discretionary housing loan to help her secure a new private rental property. She says this caused her to incur considerable additional costs when moving home and considerable stress. The Ombudsman considers that the apology the Council has already provided, and a review of its procedures represent a suitable remedy for any injustice caused to Ms B.

The complaint

1. Ms B complains that the Council delayed in sending a discretionary loan to her Lettings Agent which she needed to secure a new rental property.
2. She says this delay caused her additional costs, including the cost of the rent on the empty property, lost earnings, her time spent trying to resolve matters and pursue her complaint, interim storage costs and additional removal costs.
3. The delay has also caused her and her family considerable stress. She says that she and her and two children were also left without a place to live for four nights. She was told that, if the Council’s part contribution was not received, she would lose the property for which she had paid her deposit and rent. She also had the stress of finding additional funds to cover the move.
4. She considers that the Council should compensate her in the amount of £2,669.50 to cover her additional costs and the impact on her family.
5. She also considers that the Council should review its loan process to ensure this does not happen to other vulnerable people in the future.

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The Ombudsman’s role and powers

6. 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)
7. 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

8. I have considered Ms B’s written complaint and supporting papers, and the notes of Ms B’s discussions with the previous investigator. I have considered the Council’s response to the Ombudsman’s enquiries. I have also sent Ms B and the Council a draft decision and invited their comments.

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What I found

9. As part of its strategy to prevent homelessness, the Council operates a Rent in Advance / Deposit Loan scheme. People with a local connection and an urgent housing need, but who cannot afford a deposit or rent in advance, can apply for an interest-free loan in order to rent private accommodation.
10. There is limited funding available, so the loans are normally capped based on the number of rooms in the property. The Council does not charge interest, and the applicant repays the amount borrowed in affordable monthly instalments.
11. The Council has explained that the usual process is that, once a customer has made a request, its Housing Needs Team goes through a checklist of the documents required with the customer. If the customer does not have all the documents, the Council returns the documents and asks the customer to come back when they have everything. As this is a drop-in service, customers may see a different team member when they come back.
12. When the customer has all the documentation, they can complete the application, sign a Direct Debit form and sign a repayment letter. The Council says that customers are advised how the scheme works and given an information leaflet. It says that customers are advised that, at this stage, the application is only a request, a loan is not guaranteed, and another team member will check the application. The Council says the officer will advise the customer verbally of the likely timescale but make no guarantees.
13. Once a manager has agreed and signed off the application, the Housing Needs Team puts a payment request into the Council’s Business World On payments system (BWO). This goes into a queue for the Payments Team to process. Payment requests from all Council departments go through the Payments Team. Requests are processed in date order and sent to the authorising manager for payment approval.
14. Once approved, the payment is sent out on the next payment run. Payment runs are made once a day. When completed, it usually takes around three working days for funds to clear in the Landlord’s / Lettings Agent’s nominated bank. Overall, once the customer has supplied all the required information, the process typically takes one to two weeks.

What happened

15. Ms B lives with her two daughters. She was looking to move to private rented accommodation but had insufficient funds to pay the full amount required by the Landlord’s Lettings Agent. She therefore contacted the Council’s Housing Needs Team for assistance. On Thursday 17 May 2018, she emailed a Housing Needs officer with details of the loan required – there was a shortfall of £4,536.
16. On Thursday 24 May, Ms B came to the Council’s offices and completed a Rent in Advance / Deposit application form, a repayment letter (showing the loan to be repaid at £40 per month plus a lump sum of £2,175 once the deposit on her previous property was returned) and a Direct Debit form.
17. Ms B says the Senior Housing Options Officer (SHO) granted the loan that day. She says she told the SHO that she needed cleared funds on Wednesday 30 May as she was moving on Thursday 1 June. She says the SHO told her the funds would clear in five days and assured her that this would happen.
18. The Council says there was a discussion about the amount requested as this was substantially higher than the normal £2,000 maximum. Initial approval was made on Wednesday 30 May and a payment request sent to the Payments Team.
19. Ms B says that, as funds had not cleared by Thursday 31 May, the Lettings Agent cancelled the check-in booked for the following day. She also had to cancel the removals company booked for the next day.
20. On Monday 4 June, Ms B contacted the SHO and explained that she had had to cancel the removals company as the funds had not cleared. The SHO explained that payment had been made on Thursday 31 May but might not clear for five working days, i.e. until Thursday 7 June.
21. On Tuesday 5 June, Ms B explained the difficulty that this was continuing to cause her in trying to co-ordinate a moving date. The SHO apologised but said that the request had been processed as early as possible but could take longer than expected due to unforeseen circumstances. The SHO said she had enquired about the payment, received a remittance confirming that the money had been paid and passed this to the Lettings Agent. However, she could not control when the money would reach the account.
22. On Wednesday 6 June, Ms B contacted the SHO to say that the funds had still not cleared. She said she needed the funds cleared the same day for the Lettings Agent to book her in for Friday, to move on Saturday and clean her former home on Monday. The SHO explained that unfortunately the payment date was out of her control and the funds would reach the account on Friday 8 June.
23. In fact, it was subsequently found to be the case that the Payments Team had sent the payment request for approval on Monday 4 June, payment had been approved on Tuesday 5 June and sent on Wednesday 6 June.
24. On Thursday 7 June, Ms B contacted her local Councillor who put her in touch with the Head of Housing. She explained the difficulty that she had had with getting the payment made, the extreme time pressure she was now under to complete her move, and that she and her children would have nowhere to live from Saturday 9 June.
25. At this point, the £4,536 payment already been authorised and was in transition to the Letting Agent’s bank account. However, as the Estate Agent would not accept the Council’s undertaking that payment would be made imminently and Ms B had advised that she may become homeless on Saturday 9 June, the Head of Housing authorised a fast CHAPS payment. In the event, both the original BWO payment and the CHAPS payment arrived on Thursday 7 June.
26. Unfortunately, the Lettings Agent was unable to arrange a check-in time for Friday 8 June, Saturday 9 June or Monday 11 June. The earliest check-in date was Tuesday 12 June, so the earliest date for which Ms B could book the removals company was Wednesday 13 June.
27. As Ms B needed her former home cleaned, she had her belongings moved into storage on Saturday 9 June. She says this was the last available date to move her possessions as the property had to be empty for professional cleaning which was booked for Tuesday 12 June.
28. Ms B says her children stayed with their father from Friday to Sunday and then with his ex-girlfriend, while she had to stay on friends’ sofas. She and her daughters moved to their new home on Wednesday 13 June.
29. Ms B then complained to the Council and requested compensation in the amount of £2,669.50 to cover her additional costs and the impact on her family.
30. The Council explained that the time taken to pay the Lettings Agent was caused by workload and a misunderstanding over the date the funds were required. It apologised for the misunderstanding, the lack of clarity about the payment date and for the concern that this caused Ms B.
31. However, it also noted that the funds were transferred on Thursday 7 June, and that the checkout date for Ms B’s former home was Wednesday 13 June, so it did not consider that there was pressure to move out before then. It declined Ms B’s request for compensation but agreed to deduct her storage costs of £88.50 as a goodwill gesture. It also reminded officers of the need to be as clear and open as possible about the likelihood of when payment would be made.

My assessment

32. Mrs B says the Council should compensate her for her additional costs and for the stress that these events caused her and her family. She has itemised the following costs, totalling £2,669.50, which she considers the Council should pay:
• Cost of renting the new empty property from 1 June to 13 June – 13 days at £47.67 = £619, based on £1,450 per month.
• Two days loss of earnings due to delayed access, correspondence with the Lettings Agent and Council, time spent at the Council’s offices and stress. £226 per day for two days = £452.
• Interim storage costs = £88.50.
• Cost of additional removals = £950.
• Homelessness compensation. Four nights at £140 per night = £560.
33. This was a stressful period for Ms B and her children, and I appreciate that she incurred greater costs in moving home than she had anticipated. However, I must consider what fault there was on the part of the Council, and the extent to which I can attribute any resulting injustice to the Council.
34. It is clear that Ms B planned to move home on Saturday 2 June and understood from her discussion with the SHO that the loan would be processed in time. However, the Council has stated that while a customer may advise of a deadline and the Council will try to meet that deadline, this is never guaranteed.
35. As the Council’s practice is not to keep a written record of discussions about the loan, there is no written record to confirm what was discussed. I have therefore considered, on the balance of probability whether Ms B was misled at the initial meeting with the SHO.
36. It seems likely that Ms B was told how long it might usually take to process a loan but, given that the Council says it cannot guarantee when payments will go through (and the loan in this case was much larger than the usual upper limit), it seems to me unlikely that any guarantee was provided. I am afraid I do not see sufficient grounds to conclude that Ms B was misled at the initial meeting.
37. I note that when Ms B next contacted the SHO on 4 June she was wrongly told that the payment had made on 31 May. The Council accepts that this was wrong, though this was the SHO’s understanding at the time. In any event, the SHO said Ms B that the payment should go through by 7 July, and that advice was correct, so it does not appear that Ms B was misled in respect of the payment date.
38. I appreciate that there was a lack of clarity as to when the funds would reach the Letting Agency’s account and that Ms B contacted the Head of Housing to try and expedite matters, but it is not clear to me that the Council gave any guarantee as to when the payment would be made.
39. It is unfortunate that the Lettings Agency was not able to accept the Council’s confirmation that payment was in hand and was then unable to arrange for Ms B to check-in for several days. I understand that this meant that Ms B felt that she had to move out and put her possessions in storage in order to have the flat cleaned before she was able move into her new home.
40. However, I do not consider that the Council bears responsibility for this. The Council had told the Lettings Agency that it has authorised payment and that payment would be made imminently. The payment was made on 7 July and an additional payment raised and made the same day to try to assist Ms B. This was all well in advance of the date when Ms B had to leave her home.
41. I appreciate that, having moved and cleared the flat, Ms B and her daughters then slept at the homes of friends and family. However, she did not tell the Council that they had nowhere to sleep at the time. Moreover, she was still able to stay in her former home until 13 June.
42. So, while there may have been some lack of clarity about the payment date, for which the Council has apologised, I do not see grounds to seek any financial remedy.

Agreed action

43. I note that the Council has apologised for the lack of clarity as to when the payment had been processed and reminded officers of the need to be as clear and open as possible about the likelihood of when payment would be made.
44. I recommend that, within three months of the date of my final decision, the Council review its procedures to consider further steps to ensure that customers are clearly made aware of the application process and likely timetable. The Council may wish to consider in this regard whether to keep records of discussions; record the date for which the customer is seeking the funds; and amend its leaflet to clarify the steps required to process an application, the likely timetable and the fact that this timetable may not be guaranteed

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Final decision

45. I have closed my investigation into Ms B’s complaint because I consider that the apology already provided, and a review of the Council’s procedures represent a suitable remedy for any injustice to Ms B.

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Investigator's decision on behalf of the Ombudsman