Summary: Miss X complains the Council withdrew an offer of housing and suspended her ability to bid on other properties based on an unsubstantiated allegation. The Ombudsman finds fault and significant injustice was caused as a consequence of the Council’s poor investigation of the allegation and the way it handled her complaint. The Council has accepted our findings and agreed to carry out our recommendations.

The complaint

1. The complainant, whom I shall refer to as Miss X, complains that, because of an unsubstantiated allegation, the Council withdrew an offer of housing, suspended her ability to bid on other properties and changed her priority band from band 1 to band 2 when her circumstances had not changed. Miss X also complains about the Council’s complaint handling and its investigation of the allegation.

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The Ombudsman’s role and powers

2. 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)
3. 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

4. I discussed the complaint with Miss X and considered the information she provided in support of her complaint.
5. I considered the Council’s comments and the evidence it provided in response to my enquiries.
6. I also considered relevant law, guidance and the Council’s policies as set out below
7. Miss X and Council were given the opportunity to comment on a draft of this decision. I considered the comments from Miss X and the Council before I reached a final decision.

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What I found

Relevant law and guidance

8. Every local housing authority must publish an allocations scheme that sets out how it prioritises applicants and its procedures for allocating housing. All allocations must be made in strict accordance with the published scheme (Housing Act 1996, section 166A(1) & (14)).
9. Councils have some discretion to decide which people deserve priority in their area. However, an allocations scheme must give reasonable preference to applicants in the following categories:
• homeless people;
• people in unsanitary, overcrowded or unsatisfactory housing;
• people who need to move on medical or welfare grounds;
• people who need to move to avoid hardship to themselves or others.
10. The Council’s current housing allocations scheme (‘the Scheme’) was introduced in November 2018. Eligible applicants are placed in one of four priority bands to reflect their level of housing need. Band 1 is the highest priority and Band 4 is the lowest. Applicants in Band 1 are regarded as those with a ‘very urgent need to move’.
11. Under the Scheme, applicants are notified of all decisions and the applicant has the right to a review on any decision that is made.
12. Where there is suspicion or an allegation that a person has either provided false information or has withheld information, the Council will exclude the applicant from being considered for offers of housing during the investigation and until an outcome is reached.

The Council’s Corporate Complaints Procedure

13. The Council aims to deal with complaints straight away at stage 1 of its complaints procedure. If this is not possible, the complaint will go straight to stage 2 where the Directorate that provided the service will investigate the complaint and respond within 15 working days.
14. If the complainant is unhappy with the stage 2 response, they can request a review. The complaint is looked at by an independent officer and responded to within 20 working days.

What happened

15. Miss X lives with her parents and other family members in a three-bedroomed property. Miss X advises me the third bedroom is an extremely small room (a box room) and there are a total of eight adults living in the property. Miss X’s father has a significant and deteriorating illness and the overcrowding in the house is having a detrimental impact on the family’s health and wellbeing.
16. On 10 June 2008, the Council accepted Miss X on to its housing register and placed her in band 1, the highest priority band, due to acute overcrowding.
17. On 9 May 2019, the Council offered Miss X accommodation (property B) and advised her she was in bid position 1. An appointment was made for Miss X to view the property and she was advised that if she failed to attend the appointment, the offer would be withdrawn. In the same letter, the Council confirmed Miss X will receive one suitable offer whilst in band 1 and that this was her first offer. If she were to refuse this offer, she would be moved down from band 1 to band 2.
18. On 16 May 2019, Miss X attended the appointment to view property B. She took proof of identification and income with her to the viewing as requested by the Council.
19. At the viewing, Miss X accepted the offer of property B. She signed a provisional acceptance agreement that said she would no longer bid on any other properties while repairs are being carried out on property B and once the repairs are complete, she will attend the council offices to sign the tenancy agreement. Miss X was advised the repairs could take four to six weeks.
20. Between 16 May 2019 and 20 May 2019, the Council received information alleging Miss X did not have a housing need because she owned a property and was renting it out to tenants.
21. The Council began its investigation of the allegation on 16 May 2019. Miss X says she was unaware of the allegation and the investigation at this point and was looking forward to moving into her new home.
22. Miss X contacted the housing department and it had contacted her on several occasions between May and August 2019 regarding updates on the repairs and to go through the terms of the tenancy agreement. Miss X says she was advised in early June 2019 that she should be able to collect the keys for property B on 17 June 2019 and the rent would start from 24 June 2019. However, the repairs on property B were not completed until 8 August 2019.
23. On 13 August, Miss X was advised an appointment had been made to collect the keys to property B on 15 August. The following day, Miss X was told the appointment had been cancelled and property B would be offered to another applicant because she was being investigated for fraud. Miss X says this was when she first became aware of the allegation and the investigation.
24. Miss X was still unable to bid on any other properties as the status of her application was ‘pending’. The Council had also moved her down to band 2. Miss X says she only became aware of this after logging onto the bidding site.
25. Miss X complained to the Council on 19 August 2019. She told the Council she did not own any property, she had lived at her parent’s address all her life and she had not provided any incorrect information on her housing application. Miss X complained about not being told about the investigation until 14 August, the day before she was due to collect the keys. Miss X also said that the second applicant in attendance at the viewing (Miss Y) had taken the viewing officer to one side to speak to her privately which she found odd at the time but in hindsight, she thinks that Miss Y may have made the allegation so she could have the property.
26. The Council responded to Miss X’s complaint on 12 September 2019. It said her housing application was pending and the offer of property B had been withdrawn due to an anonymous allegation that she owned a property on Road X. The Council went on to say that on 12 July, two unannounced visits to Miss X’s parent’s home were conducted and 7-day contact letters were left due to there being no answer. The Council said it had not received any contact from Miss X after the 7-day contact letters were posted on 12 July. It advised her that before she could be allowed back onto the housing register, she was required to provide bank statements to prove she was not in receipt of rental income.
27. On 14 September, Miss X escalated her complaint to the Council and sent her bank statements to prove the only income she was in receipt of was from her full-time employment. She stated the allegation was malicious and if she owned a property she would not be waiting 11 years for the Council to house her. Miss X said she had not received the 7-day contact letters and at no point was she advised about the investigation when she contacted the lettings team between May and August. She was led to believe she would be moving into property B once the repairs were complete.
28. The Council received Miss X’s bank statements on 18 September 2019.
29. Miss X requested the help of her local councillors. The Council responded to Councillor A on 26 September 2019 and said Miss X was required to provide bank statements to prove she is not in receipt of rental income before she can be allowed back onto the housing register.
30. Miss X instructed a solicitor to contact the Council on her behalf. The solicitor submitted a subject access request (SAR) for information relating to Miss X’s complaint and evidence of the Council’s attempts at contacting her prior to 14 August.
31. The Council’s response to the SAR contained Miss X’s written complaints to the Council, her bank statements, a blank template of a letter the Council said it posted through her letterbox on two occasions and emails. An internal email dated 26 September 2019 from the council officer investigating the allegation was included in the bundle of documents. The investigating officer said she had visited Miss X’s address on 10 May 2019 at 13:44 and 4 July 2019 at 13:50. She went on to say that the letters would have had the date, Miss X’s name and reference number, handwritten on them before being posted through the letterbox. As she did not receive a response from Miss X, the investigating officer referred the matter back to the housing department with a recommendation that she provide the Council with evidence she is not in receipt of rental income.
32. Miss X had still not received a reply to her complaint nor the outcome of the investigation, so she asked her solicitor to contact the Council.
33. On several occasions in 2020, the Council advised the solicitor it was still awaiting evidence from Miss X to show she was not in receipt of rental income when she had already supplied this information. Miss X was unhappy with the lack of progress on the complaint and investigation, so she brought her complaint to the Ombudsman.

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Analysis

Miss X’s priority band

34. It is not for the Ombudsman to decide what housing band Miss X should be awarded. That is a decision for the Council to make based on the evidence provided. It is instead the role of the Ombudsman to look at the way in which the Council has made its decisions. If we find fault causing injustice, we recommend action to put people back in the position they would have been in had the error not been made.
35. The documents I have seen show the Council considered Miss X’s application in June 2008 and it awarded her band 1 with a 3-bedroom need. The Council moved Miss X’s application to band 2 in August 2019 because of the withdrawal of property B. The Council says it had notified Miss X in May 2019 that if she refused a suitable offer, she would be moved down to band 2. However, Miss X did not refuse the offer of property B, she accepted it. I will go on to explain how I have found fault in the way the Council investigated allegations made about Miss X which led to it withdrawing the offer.
36. Miss X only became aware she had been moved down to band 2 after logging on to the bidding website to check if her application was still ‘pending’. The Council’s housing allocations policy says it will notify all applicants of all decisions and the applicant has the right to a review on any decision that is made. However, I have seen no evidence Miss X was advised of the decision to move her down to band 2 and consequently she was denied the opportunity to request a review of this decision. This is fault.
37. Miss X says she was shocked to see she had been moved down to band 2 when she logged onto her bidding account. She says she felt very confused, she did not understand why because her circumstances had not changed, and the Council had not communicated its decision or its reasons.

The Council’s investigation of the allegation of fraud

38. As the demand for social housing is greater than the availability of homes, I appreciate the Council cannot leave a property vacant whilst it investigates allegations of fraud. However, it received the allegation on 16 May 2019 and property B was vacant due to repairs until 8 August 2019. The Council could have used this time to investigate the allegation properly and reach an outcome without penalising Miss X if the allegation was unfounded.
39. The Council says it left two letters at Miss X’s home address asking her to contact it within seven days. I am unable to find a case record of when the letters were posted and the dates of the unannounced visits the Council provided are inconsistent. It initially said two visits to Miss X’s address took place on 12 July 2019 and 7-day contact letters were put through the letterbox. It then advised me unannounced visits were made on 29 May and 4 July. However, the investigating officer who made the visits specifically says she visited Miss X’s address on 10 May 2019 at 13:44 and 4 July 2019 at 13:50, but the investigation did not start until 16 May, the same day the allegation was received.
40. Miss X says she did not receive the letters but due to the Council’s poor record keeping and the inconsistencies highlighted above, I am unable to establish if the Council did attempt to make contact with Miss X prior to August to advise her of the allegation made against her.
41. The Council says because Miss X failed to contact it in response to the letters it posted through her letterbox, it changed the status of her housing application to ‘pending’. The Council also withdrew the offer of property B and stopped Miss X from bidding on any other properties.
42. The Council says it was unable to complete its investigation due to a lack of contact from Miss X and bank statements were required to prove she was not in receipt of rental income. However, Miss X was in regular contact with the housing department, the lettings team, rents department and the voids department. As Miss X was unaware of the allegation made against her, she contacted the Council for updates on the repairs to the property and she was preparing to move to her new home. The Council provided Miss X with updates on property B, information regarding the tenancy and made an appointment for her to collect the keys to property B. It did not advise her of the allegation and investigation. This is fault.
43. Miss X was looking forward to moving into her new home and she found it incredibly upsetting to be told the day before she was due to collect the keys that the property had been withdrawn and an allegation of fraud had been made against her. Had the Council advised her of the allegation when she contacted it on previous occasions, it is likely the matter could have been resolved by the time the property was ready.
44. The Council maintains Miss X did not make contact with the Council in response to the 7-day contact letters. If this was the case, the Council should have recognised it was unusual not to be contacted by someone who had been on the housing register for 11 years, in the highest priority banding and it regarded as someone with a ‘very urgent need to move’. There is evidence of regular contact between the Council and Miss X via telephone and email previous to the allegation, but it failed to use these methods of communication after receiving the allegation. I appreciate the Council was following a process when it said it posted the contact letters but a simple phone call to Miss X could have resolved the matter quickly and avoided the resulting injustice.
45. I have seen no evidence the Council considered the significant impact on Miss X and her family if the allegation was malicious and unfounded. I consider it should have prioritised the investigation into the allegations and resolved the matter during the three months property B was being repaired.
46. I have concerns about the Council’s investigation into the allegations made against Miss X. The Council says it did not have an address for the alleged property Miss X owned but the documents I have seen show the Council had a street name and postcode. This was enough information for the Council to request a land registry search as part of its investigation. Additionally, the Council has said the matter remains unresolved because Miss X has not provided it with her bank statements. However, the Council received this information on 18 September 2019.Therefore I have found fault in the way the Council has investigated the allegations against Miss X.
47. The Council has repeatedly advised Miss X that once she provides bank statements as proof she is not in receipt of rental income, it will allow her back onto the housing register. I have looked at the bank statements the Council received from Miss X and they show the only income she receives is from her employer. Had the Council considered the evidence properly it would have found Miss X’s bank statements show she is not in receipt of a rental income and she would still be on the housing register. Had the Council requested this information sooner, Miss X could have moved into property B as anticipated and the significant injustice her and her family members have continued to endure since August 2019 could have been avoided.

The Council’s complaint handling

48. There is evidence Miss X, her solicitor and two local councillors relayed their concerns to the Council about the matter from August 2019 to August 2020. The Council has repeatedly said it requires bank statements from Miss X to prove she is not in receipt of rental income. Miss X and her solicitor advised the Council on several occasions the evidence had been submitted but the Council has continued to say this information is outstanding, 13 August 2020 being the most recent request. Miss X was understandably frustrated and brought her complaint to the Ombudsman.
49. Had the Council investigated Miss X’s complaint properly it would have found that she had submitted the evidence it requested. This is evidence of poor complaint handling and it is fault. Miss X says she felt incredibly frustrated with the Council and felt as though she was ‘going round in circles’ which is why she brought her complaint to the Ombudsman.
50. The Council said Miss X had completed its complaints procedure, but I have seen no evidence it sent her a letter setting out the outcome of her complaint or evidence it directed her to the Ombudsman if she remained unhappy. This is also fault.

The fault and the injustice caused

51. To summarise, the Council is at fault for the following:
• Wrongly reducing Miss X’s priority banding in August 2019 from band 1 to band 2 due to ‘refusing’ an offer of accommodation when in fact she accepted the offer but the Council withdrew it;
• Failing to notify Miss X of its decision to reduce her priority banding and informing her of her right to request a review;
• Withdrawing an offer of accommodation without a proper investigation of an unsubstantiated allegation and without any evidence;
• Failing to recognise the detrimental impact to Miss X and her family if the allegation was unfounded by not prioritising the investigation during the three months property B was vacant;
• Failing to adequately record the attempts it made to contact Miss X to advise her of the allegation;
• Failing to use the other methods of communication in the investigation it had previously used to correspond with Miss X when it did not receive a response from the contact letters it said it had posted;
• Failing to advise Miss X of the investigation when she contacted the Council between May and August 2019 for updates on the repairs of property B, instead it discussed the tenancy and made an appointment for her to collect the keys to the property;
• Repeatedly asking Miss X for information she had already provided resulting in unnecessary delay of approximately 20 months;
• Conducting a poor investigation into an allegation made against Miss X; and
• Poor handling of Miss X’s complaints.
52. Miss X has been caused an injustice because her faith in the Council’s housing scheme has been significantly damaged. Miss X has been on the housing register for 11 years and no allegations of fraud had been made against her until she accepted an offer of accommodation and was preparing to move into her first home. The Council has not been open and transparent about its decision making when it reduced her priority banding and suspended her from bidding on properties. This caused a lot of uncertainty as she was given no indication when she could start bidding again. Miss X has been unable to bid on properties since May 2019.
53. Due to the Council’s faults, Miss X and her family have had to stay in overcrowded accommodation longer than they needed to. To date this has been nearly 20 months longer than they should have were it not for the fault I have identified. Miss X has informed me the stress and tension in the home due to the overcrowding is incredibly tough. Her father has a significant illness and his deteriorating condition contributes to the stressful home environment.
54. Miss X’s expectations were raised by the Council when it provided her with updates on the repairs to property B and when it made an appointment for her to collect the keys. Miss X says she was incredibly upset when the Council called to tell her the day before she was due to collect the keys to her new home that it had withdrawn the offer. She says she was shocked to be told in the same phone call the Council was investigating an allegation of fraud that had been made against her and the investigation had been going on for three months.
55. The Council’s apparent oversight of receiving the bank statements from Miss X has been incredibly frustrating for her. She was repeatedly told by the Council in its complaint responses that it was still waiting for her to submit her bank statements when she had already provided them. Miss X and her solicitor advised the Council it had sent the evidence it requested but it continued to request the information.
56. It was distressing for Miss X when the Council did not properly consider the evidence she provided and it made errors in the investigation and also the complaint handling. Miss X was put to significant time and trouble in gathering evidence, stating her case to the Council, chasing the Council for updates, seeking help from two local councillors and a solicitor. This could have been avoided if the Council had taken adequate steps to investigate the allegation against her and her complaints effectively.

Agreed action

57. To remedy the injustice caused by the identified faults, the Council has agreed that within eight weeks of this final decision, it will:
• apologise to Miss X for the faults identified;
• reinstate Miss X’s priority banding to band 1;
• allocate the next suitable property that becomes available to Miss X in an area she has been bidding in;
• pay Miss X £300 for the avoidable distress, delay and inconvenience caused by the poor complaint handling;
• pay Miss X £300 for the avoidable distress, delay, inconvenience and uncertainty caused by the poor investigation of the allegation and the delay in concluding it;
• pay Miss X £200 for the time and trouble in bringing this complaint when it could have been resolved without the involvement of her solicitor and the Ombudsman; and
• pay Miss X £100 for the month of August 2019 and £200 for every month thereafter, until it allocates her with suitable housing. These payments are to acknowledge the period Miss X has had to, and is continuing to, remain in unsuitable accommodation because of the fault. I have reached my view on this amount having taken account of the Ombudsman’s published guidance on remedies. This suggests a range of between £150 and £350 for each additional month a complainant remains in unsuitable accommodation because of fault by a Council. I consider £200 a month is an appropriate reflection of Miss X’s difficulties caused by living in acute overcrowded accommodation with a family member who has significant health needs.
58. Within six months of this final decision, the Council has agreed to take the following action to improve its services:
• review the handling of the allegation made against Miss X and provide guidance to officers on how to deal with future allegations made by people with a vested interest in the outcome of an investigation;
• remind relevant officers of the need to provide written decisions about housing applications and that this should be accompanied by an explanation of the applicants review rights; and
• remind relevant officers to provide responses to complaints in line with the Council’s complaints procedure including reference to a right to complain to the Ombudsman.
59. The Council has agreed to provide the Ombudsman evidence that these actions have been completed.

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Final decision

60. There is fault by the Council and it caused significant injustice to Miss X. The Council has agreed to take action to remedy this injustice. I have now completed my investigation.

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Investigator's decision on behalf of the Ombudsman