The Ombudsman's final decision:
Summary: A consultancy company acting for the Council failed to effectively manage works to Mr and Mrs X’s home under the Decent Homes Loan scheme. The Council has agreed to refund £1,710 project management fees and pay Mr and Mrs X an additional £1,400 for inconvenience, time and trouble and other costs. These are appropriate actions to remedy injustice caused by this fault.
- Mr and Mrs X complain about the actions of a consultancy company acting for the Council on home improvement. They complain its offer of remedy for faults with its supervision of work to their home was inadequate. They say the work was of poor standard, it took too long, caused damage to their property and sub-contractors’ workers were rude and abusive.
- Mr and Mrs X want the Council to offer and appropriate payment for the faults it, and its consultant, have admitted.
What I have investigated
- I have not investigated the part of Mr and Mrs X’s complaint concerning allegations of damage to their property. This is for the reasons set out in paragraph 37.
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 may decide not to start or continue with an investigation if we think the issues could reasonably be, or have been, raised within a court of law. (Local Government Act 1974, sections 24A(6) and 34B(8), 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 spoke to Mrs X about the complaint and considered information from Mr and Mrs X.
- I asked the Council questions about the complaint and considered information it sent including:
- Home Assistance Policy 2014
- Template letters sent to people applying for home assistance
- Service description for repairs and improvements under the decent homes scheme
- Guidance notes for customer information interviews about the decent homes scheme.
What I found
- The Council runs a decent homes loan scheme to bring property up to the Government’s decent home standard. This can cover improvements to heating, insulation, kitchen and bathroom facilities.
- The Council commissions Liverpool Mutual Homes (LMH), a housing association as “consultant” to run the scheme. This includes them arranging for suitable “contractors” to then carry out work on properties.
- Mr and Mrs X contacted the Council in 2015 to take out a loan to bring their house up to decent homes standard. LMH says it sent Mr and Mrs X letter and information leaflet explaining the decent homes loan scheme in February 2015.
- An LMH officer visited Mr and Mrs X in March 2015 to explain the scheme. There are no direct records of this meeting. Guidance notes for this type of interview say officers should explain there are two options for the role LMH will play in managing a decent homes loan project. Mr and Mrs X say the officer did not explain the second of these options and they felt obliged to have the full management service.
- The first option is for a full management service. Under this arrangement LMH (the consultant) selects contractors and arranges tenders that meet the customer’s needs.
- The second option is for a reduced management service. Here the applicant picks their own contractor(s). LMH’s role is then reduced.
Mr and Mrs X’s complaint
- Mr and Mrs X complained to LMH about the work in 2017. They said it was poor quality. They said the problems were caused by LMH allowing HMS to subcontract work. They had not given permission for this.
- LMH replied in February 2017. In summary it apologised for works not completed in a timely or professional manner. It explained how it had selected HMS. It accepted that the work took too long and that there had been problems with workmanship, attitude, behaviour and management of the task by sub-contractors.
- It said that because of the complaint it had removed a sub-contractor from its list of approved companies. It understood repairs and further works were planned to put the situation right. It offered Mr and Mrs X £280 as a goodwill gesture. It then increased this offer for £1,200. This was £600 to remedy inconvenience to the couple and £600 to cover a boiler call-out fee and fridge freezer.
- Mr and Mrs X refused this offer and made a further complaint to LMH. LMH met with the couple in July 2017 and reviewed its investigation. It wrote to them later in July, upholding their complaint, accepting failings in the standard of work including behaviour of staff, problems with outstanding works and poor customer service. It again confirmed HMS had removed the sub-contractor from its list.
- It explained how it had improved practice. It understood Mr and Mrs X were asking for much higher compensation for what had happened. It said its offer of £1,200 was appropriate. LMH referred Mr and Mrs X to the Ombudsman.
- Since Mr and Mrs X contacted the Ombudsman, the Council contacted LMH and agreed it would also repay its full project management fee of £1,710 to Mr and Mrs X. The Council has since offered a further £200 for time and trouble for Mr and Mrs X coming to the Ombudsman, making a final offer to them of £3,110.
- The courts are best placed to make findings on detailed contractual matters. The Ombudsman can only consider whether councils and organisations acting on their behalf have acted with administrative fault.
- Mr and Mrs X agreed with LMH that it would act as consultant through a full managed contract. Their Consultancy Agreement allowed LMH (as consultant) to appoint a contractor (in this case HMS) to carry out works. There was no fault in how this decision was made.
- However Mr and Mrs X did not then agree that HMS could further sub-contract out work as required by the consultancy agreement. This was therefore fault. This means Mr and Mrs X are left uncertain whether, had they been given the option to choose, they could have avoided what then happened.
- LMH had, under the consultancy agreement, responsibility to manage work by its contractors (and therefore sub-contractors) effectively. It accepts work by the sub-contractors was of poor standard, and poor customer service. It therefore failed to manage the work effectively.
- The Ombudsman will not usually investigate complaints where the claimed injustice wholly or mainly relates to loss or damage to property. This is because this type of dispute can best be remedied through the courts or by a council’s insurers. We have therefore only considered what is an appropriate remedy for distress and difficulty caused to Mr and Mrs X by these faults.
- The Council and LMH’s offer to reimburse management fees, cover additional items and recognize the inconvenience caused to Mr and Mrs X with a total offer of £3,110 is an appropriate remedy for injustice. It is in line with our guidance on remedies.
- The Council and LMH have also explained how they have learnt from this complaint to improve practice. In summary this means:
- All sub-contractors now meet customers together at the start of works. They provide a full programme of works including key milestones.
- Full agreement and confirmation is now required setting out how any sub-contractors (for example in specialist areas) will deliver on the contract.
- LMH carries out site visits every other day to ensure work is progressing in line with the programme.
- A diary is left with householders so they can record behaviour or individual contractors. LMH monitors this diary and tackles issues as they arise.
- The Council has agreed to pay Mr and Mrs X £3,110 to remedy injustice. It should do this within one month of this decision.
- I have completed my investigation. I have found fault causing injustice. The Council has agreed actions that remedy that injustice.
Parts of the complaint that I did not investigate
- I did not investigate the part of Mr and Mrs X’s complaints regarding allegations of damage to their property as a result of the sub-contractors’ actions. This is because they could have pursued a claim about this damage with the Council’s insurers.
Investigator's decision on behalf of the Ombudsman