Summary: Mr X complained about mistakes the Council made calculating his council tax reduction claim in 2020. The errors the Council accepted it made caused Mr X avoidable distress and worry. While the Council has already apologised, it also agreed to pay Mr X a financial remedy and review how it informs people of their appeal rights.

The complaint

1. Mr X complains the Council made mistakes calculating his council tax reduction claim since 2020, which resulted in him being sent a large bill when the Council realised its mistakes in 2023. He received this near Christmas 2023, which caused him and his family significant worry. He also says the Council took too long to resolve the problem and it was difficult to contact the Council, which caused him further frustration.
2. Although the Council has written off part of the debt, Mr X says it should write off the rest and should pay him compensation for the upset it caused.

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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 significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. The Local Government Act 1974 sets out our powers but also imposes restrictions on what we can investigate.
5. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
6. The law says we cannot normally investigate a complaint when someone has a right of appeal, reference or review to a tribunal about the same matter. However, we may decide to investigate if we consider it would be unreasonable to expect the person to use this right. (Local Government Act 1974, section 26(6)(a), as amended)
7. The Valuation Tribunal deals with appeals against decisions on council tax liability and council tax support or reduction.
8. 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

9. I considered:
• the information Mr X provided and discussed the complaint with him;
• the Council’s comments on the complaint and the supporting information it provided; and
• relevant law and guidance.
10. Mr X and the Council had an opportunity to comment on my draft decision. I considered their comments before making a final decision.

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What I found

Council tax support

11. Council tax reduction (CTR, also known as council tax support) is a discount, not a benefit. If a council gives someone too much CTR it can reduce the CTR and so increase the council tax owed. We call these changes CTR reversals. Sometimes a council creates reversals because it has miscalculated the CTR, perhaps ignoring information it had, or using information it should have not used.
12. If the council’s CTR Scheme says how it deals with challenges to reversals (sometimes called ‘overpayments’) a claimant can appeal to the Valuation Tribunal. If the scheme does not say how the council will deal with CTR reversals the claimant cannot appeal.
13. Councils can award discretionary CTR to reduce a claimant’s council tax, using their powers under S13A(1)(c) of the Local Government Finance Act 1992 (as amended). Each council should have its own scheme. Somebody experiencing financial hardship because of a decision about wrongly paid council tax reduction, can apply for a discretionary reduction. Appeals about those decisions are to the Valuation Tribunal.

Council tax recovery

14. The Council Tax (Administration and Enforcement) Regulations 1992 cover both the way councils collect payments of council tax and the way councils can recover council tax debt. The Tribunals, Courts and Enforcement Act 2007 and associated regulations cover the way enforcement agents may recover debts.
15. The council tax bill for the year is due on 1 April. A council will usually collect payment through monthly instalments. If the liable person misses any instalment, the council will send them a reminder. If a payment is still not made or a further payment missed, then the entire outstanding balance will be due (that is the full amount for the rest of the year).
16. To use the various powers available to it to recover unpaid council tax, a council must apply to a magistrate’s court for a liability order against those it believes are liable. Once a council has a liability order it can take recovery action.
17. A liability order gives a council the legal power to take enforcement action to collect the council tax and court costs owed. The most commonly used powers are asking for deductions from benefits, getting an attachment of earnings (this means deductions are taken directly from earnings by an employer and passed to the council) or using enforcement agents. The council can decide which recovery method to use but it can only use one method for one liability order at one time.

What happened

18. Mr X claimed Council Tax Reduction (CTR) from the Council in 2020. Although not realised at the time, the Council incorrectly recorded Mr X’s income. The Council thought Mr X had a lower income than he did and so it awarded him more CTR than he was entitled to.
19. The Council realised its mistake in late 2023. It reversed the amount of CTR it awarded to Mr X, which meant Mr X then owed council tax arrears over several years. The Council sent notices to Mr X about the changes and the newly outstanding debt a few weeks before Christmas.
20. Mr X was concerned about the debts, which he had no knowledge of, so he contacted the Council to challenge its decisions about his entitlement to CTR. The Council asked Mr X to make arrangements to pay something towards the outstanding balance while he asked the Council for a review.
21. The Council asked for more information for the review in January 2024, and it agreed to suspend action on the council tax debt until the end of February to allow him to provide it. Mr X paid the agreed payments in the early part of 2024.
22. In April 2024, the Council decided Mr X’s review. It wrote off the balances for 2020/21 and 2021/22, as it decided the debt was due to the Council’s error. However, it decided the amounts for later years were still payable. The Council told Mr X he could write to it again if he disagreed with its decision, but it did not tell him about any rights he had to appeal to the Valuation Tribunal.
23. Mr X complained to the Council, which apologised and accepted that:
• it had made a series of mistakes calculating his income in 2020/21 and 2021/22;
• it would have been unreasonable for Mr X to have realised the award was wrong at the time, so it had written off the debt caused by the errors; and
• Mr X had some difficulty contacting the Council, due to staffing issues and a high volume of calls to its contact centre.
24. However, the Council disagreed:
• it had deliberately sent the amended council tax bills close to Christmas, this was just the time it happened to make the decision; and
• any of the letters it had sent had been threatening or had mentioned specific enforcement action, such as visits by enforcement agents.
25. In response to my enquiries, the Council also accepted that it should have told Mr X about his rights to appeal to the Valuation Tribunal in its April 2024 review decision. However, it would not object, on the grounds of lateness, to any appeal Mr X did make about the amount of CTR he was entitled to because it had failed to properly inform him of his appeal rights.

My findings

26. I am satisfied Mr X only became aware of the Council’s errors in late 2023 and he complained to the Ombudsman within 12 months of become aware of the problem. Therefore, although the errors happened in 2020, Mr X’s complaint about these is not late.
27. The Council’s CTR scheme is silent on how the Council deals with CTR reversals. Therefore, while Mr X has rights to appeal the amount of CTR he is entitled to, he could not appeal about how the Council treated or recovered the reversal based on it being responsible for the error.
28. However, the Council accepted it was responsible for the error and wrote off the outstanding balance from the years where it accepts it made error. I consider that is a suitable remedy in respect of any debt Mr X owed from that time.
29. Mr X has the right to appeal the Council’s decision about how much CTR he was entitled to for 2022/23 and 2023/24 to the Valuation Tribunal. The tribunal is an independent expert body whose decisions are binding on the Council. It would be reasonable for Mr X to make appeal to the tribunal in this case if he disagrees with those awards, since the Council has committed to not objecting to any late appeal.
30. Although the Council has written off the debts caused by its error, I am satisfied the errors also caused Mr X some avoidable distress and worry. He received demands from the Council for a large sum of money, just before Christmas in 2023. Given the proximity to the holiday season, I accept the distress caused was more significant than it would have been at other times of the year.
31. However, I do not consider any of the letters the Council sent Mr X were threatening or inappropriate. The only letter which refers to enforcement explained the Council might take further action if Mr X did not keep to the required instalments. That warning did not refer to enforcement agents or any other particular enforcement action. The Council did not take any enforcement action or apply to court for a liability order. Therefore, I am not satisfied the Council was solely responsible for the distress Mr X felt about enforcement agents visiting his home.
32. The Council apologised for the distress and frustration caused by the notices and difficulties contacting it about the matter. Given the impact the matter had on Mr X’s ability to enjoy the Christmas holidays, my view is that an apology it not a sufficient remedy on its own. The Council should also make a symbolic payment to Mr X to recognise the distress it caused.

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Agreed action

33. Within one month of my final decision, the Council will pay Mr X £200 to recognise the distress and frustration caused by the errors and difficulty he had contacting the Council to resolve the matter.
34. Within three months of my final decision, the Council will review its process, including any standard or template letters, for responding to CTR reviews to ensure it informs people of their rights to appeal relevant decisions to the Valuation Tribunal.
35. The Council should provide us with evidence it has complied with the above actions.

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Final decision

36. I have completed my investigation. The errors the Council accepted it made about Mr X’s council tax reduction award caused him avoidable distress and worry. While the Council has already apologised, it also agreed to pay Mr X a financial remedy and review how it informs people of their appeal rights.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman