Summary: Miss X complained the Council failed to provide her with suitable advice about a rent increase from her private landlord. We did not find fault with the Council causing an injustice to Miss X.

The complaint

1. Miss X complained the Council failed to provide her with suitable advice about a rent increase from her private landlord.
2. Miss X says the Council ignored affordability checks and included her Personal Independence Payments within its calculations of what she could afford for her rent.

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The Ombudsman’s role and powers

3. 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)
4. 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

5. I have considered all the information Miss X provided. I have also asked the Council questions and requested information, and in turn have considered the Council’s response.
6. Miss X and the Council had opportunity to comment on my draft decision before I made my final decision.

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What I found

Relevant legislation and guidance

7. Section 175(3) of the Housing Act 1996 says that someone is homeless if it is not reasonable for the person to continue to occupy their accommodation. Within Section 175(3) “unaffordability” is a criterion for a reason why someone cannot continue to occupy their accommodation.
8. The Homelessness Code of Guidance for Local Authorities (the Guidance) guides councils on affordability.
9. Section 6.28 of the Guidance says a Council should consider four factors when considering affordability. These are:
• The financial resources available to a person. This includes income and savings.
• The cost of the accommodation.
• Any maintenance payments a person needs to pay for spouses or children.
• Any reasonable living expenses.
10. The Government’s website says that Personal Independence Payments (PIP) should only be considered as part of a person’s financial resources for “extra living costs” to support their “everyday tasks” and “getting around” related to a person’s physical or mental condition. A council should not consider a PIP as part of a person’s financial resources towards their affordability for accommodation.
11. Section 17.46 of the Guidance elaborates on what a council should consider as part of the cost of the accommodation. This includes the cost of a rent or mortgage, any license fees directly related to the accommodation, any service charges directly related to the accommodation and Council Tax.
12. Section 17.47 of the Guidance elaborates on what “other reasonable living expenses” could include. This says housing authorities need to consider whether an applicant can afford their housing costs without being deprived of basic essentials such as food, clothing, heating, transport and other essentials specific to their circumstances.
13. The Guidance also says a council may be guided by the Universal Credit standard allowances when assessing a person’s income.
14. In September 2020, the Government website detailed a summary of what it considered made up “essential bills”. This included the costs of a mortgage or rent, energy bills, water bills, loans or debt repayments, Council Tax and basic telecommunication and insurance costs.

What happened

15. Miss X’s landlord proposed to increase her rent to £750 a month with an interim increase to £625 a month.
16. On 23 May 2022, Miss X contacted the Council for housing advice about this proposed rent increase. Miss X gave the Council updated information about her income. The Council said that once it took off the proposed rent increase of £750 per month from Miss X’s income, this left her enough money for “bills, food, dis costs and her credit card payments”. The Council decided Miss X could afford the rent increase. The Council said Miss X was not at risk of homelessness and told her of her right to appeal this decision.
17. Miss X’s landlord told her it would be increasing her rent to £625 a month from 10 June 2022.
18. Miss X contacted the Council to advise she had agreed to the rent increase of £625 a month. Miss X said the proposed rent increases were not affordable and questioned why the Council had included her PIP award in their affordability calculations.
19. The Council responded on 7 June 2022 to advise it upheld its position of 23 May 2022 that the rent increase was affordable. The Council explained its consideration of Miss X’s income and what she had leftover to pay for bills, food, debts and disability costs.
20. Miss X asked the Council to consider her complaint at the next stage of its complaints process. Miss X said the charity Shelter advised her the Council should not consider her PIP as part of her rent affordability and queried why the Council had included this. Miss X provided a breakdown of her affordability completed by Shelter stating that Miss X’s outgoings were more than her income following the rent increase.
21. The Council provided its final complaint response to Miss X advising that on review of Miss X’s further information it upheld its position from the Stage 1 complaint response. The Council said Miss X could seek financial advice elsewhere if she disagreed with the Council’s consideration.

Analysis

22. The Ombudsman is not an appeal body, so cannot comment on the merits of judgements and decisions made by councils in the absence of fault in the process.
23. The Ombudsman must decide if the Council has considered the relevant legislation and policies in making its decision that Miss X’s rent increase was affordable. If the Council has considered the relevant policies and reached a suitable decision in line with these policies, the Ombudsman cannot find fault.
24. Miss X complained the Council included her PIP award as part of its consideration of her rent affordability. Miss X is correct the Council should not consider PIP when considering rent affordability as this award is specifically for extra costs a person may incur because of their physical or mental needs.
25. When the Council considered Miss X’s affordability in May 2022 it said the leftover money Miss X had would leave her enough money to cover her “bills, food, dis costs and her credit card payments”. The Council has considered that Miss X’s leftover money would cover her disability needs noted as “dis costs”. The Council has considered Miss X’s disability costs when completing the affordability check and had consideration of her PIP for this purpose.
26. As part of an affordability check, the Council can either consider Miss X’s disability costs and the PIP award against this or disregard the PIP award but also disregard Miss X’s disability costs. Either approach is suitable. The Council chose the first approach and I do not find fault. The Council would only be at fault if it considered Miss X’s PIP as part of her income without considering her disability costs.
27. Miss X also complained the Council failed to consider affordability calculations provided by Shelter in deciding if she could afford the rent increase.
28. The Council completed its first assessment of the rent increase affordability over the telephone. The Council used the information Miss X provided to it over the telephone to complete this affordability check. Based on the information Miss X provided, the Council decided that Miss X could afford the rent increase. The Council based its affordability assessment in May 2022 on the information Miss X provided and I do not find fault.
29. When Miss X provided the financial breakdowns completed by Shelter, I would have expected to see the Council review these breakdowns to confirm that Miss X could afford the rent increase. The Council has confirmed that it did not complete a further calculation of affordability based on the updated information.
30. This was fault by the Council as it should have verified its decision that Miss X was not threatened by homelessness based on accurate and up-to-date information.
31. While failure to verify the new information provided by the Council was fault, this did not cause an injustice to Miss X. The information provided in the Shelter breakdowns shows that Miss X could afford the rent increase to £625 she agreed to and her reasonable living expenses when considering her financial resources.
32. The Shelter breakdown includes expenses which do not fall into the “essential living costs” categories outlined in Section 17.47 of the Guidance or the Governments consideration of “essential bills”. If consideration is only given to Miss X’s costs for gas and electricity, water, food, clothing, transport, debt repayments, basic telecommunications costs and basic insurance, Miss X could afford the rent increase to £625. This affordability is consistent whether Miss X’s PIP is included with consideration of her disability costs, or her PIP is excluded with her disability costs also excluded.
33. Should Miss X’s rent have increased to £750, Miss X would need to approach the Council for a new affordability check for risk of homelessness. This would be the subject of a new matter.

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Final decision

34. I have completed my investigation as the fault by the Council did not cause an injustice to Miss X.

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Investigator's decision on behalf of the Ombudsman