The Local Government Ombudsmen have today (6 October 2011) published a report summarising their experience of complaints so that councils can avoid maladministration and advice agencies can identify suitable cases to refer on to the Ombudsmen.

The report highlights the devastating consequences that bankruptcy can have for a debtor – in one case study an original council tax debt of just under £840 escalated to over £67,000 by the end of the proceedings.

The report also highlights the imperatives for councils to use their lawful powers to collect council tax which funds almost a quarter of the costs of local services. Amongst the 10 most deprived areas the council with the lowest collection rate would have almost £6 million more to spend each year if it could match the council with the highest collection rate.

In 2009/10 councils initiated at least 4,700 bankruptcy proceedings to recover council tax debts. Although the total number of complaints to the Ombudsmen is relatively small there have been an unusually high proportion of formal reports with findings of maladministration.

Anne Seex, Ombudsman, said: "Councils have the lawful power to pursue bankruptcy orders against people who will not pay their council tax debts. We will not criticise a council for using bankruptcy or other debt recovery methods if the decision to do so has been properly made. The case studies of complaints made to us involve avoidable mistakes that have had terrible impacts on the individual citizens."

The report says that the Ombudsmen are likely to find maladministration if a council:

• does not have a formal, published Debt Recovery Policy
• has not gathered and considered information about a debtor’s circumstances
• does not include in its Debt Recovery Policy the step officers must take before deciding on bankruptcy, committal to prison or charging orders, or
• pursues bankruptcy without clearly recording that each of these steps had been taken.

It draws attention to the importance of councils considering whether the debtor may be mentally ill and taking account of their duties under the Equality Act. One of the case studies involved a woman suffering from long-term, severe mental illness against whom the council would not have used bankruptcy if the officers responsible for the decision had known of her circumstances.

Article date: 06 October 2011