Summary: Miss X complained the Council stopping making Discretionary Housing Payments to cover the shortfall between her benefits and rent. The Council was at fault for failing to properly consider if Miss X’s property was affordable before ending its relief homelessness duty and for failing to consider if it owed her a new homelessness duty when she accrued significant rent arrears. This caused Miss X distress. The Council has agreed to pay Miss X’s rent arrears and ongoing rent shortfall and consider whether it owes Miss X a homelessness duty. It should also remind its staff of the proper process.

The complaint

1. Miss X complained the Council stopped making Discretionary Housing Payments to cover the shortfall between her benefits and rent. She said this meant she accrued rent arrears and was distressing.

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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. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
4. 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

5. I have considered:
• the information Miss X provided and discussed the complaint with her;
• the Council’s comments about the complaint and the supporting documents it provided; and
• the Council’s policies and the relevant law and guidance.
6. Miss X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Relevant law and guidance

7. Part 7 of the Housing Act 1996 and the Homelessness Code of Guidance for Local Authorities set out councils’ powers and duties to people who are homeless or threatened with homelessness. Homelessness is defined in law and a person is classed as homeless where it is unreasonable for them to continue to occupy their accommodation.

Threatened with homelessness

8. Someone is threatened with homelessness if, when asking for assistance from the Council they are likely to become homeless within 56 days; or they have been served with a valid Section 21 notice which will expire within 56 days.
9. If a council considers the person is threatened with homelessness and eligible for assistance, it must ‘take reasonable steps to help the applicant to secure that accommodation does not cease to be available’. This is the prevention duty.
10. The council must complete an assessment. Councils should work with applicants to identify practical and reasonable steps for the council and the applicant to take to help the applicant keep or secure suitable accommodation. These steps should be tailored to the household, and follow from the findings of the assessment, and must be provided to the applicant in writing as their personalised housing plan (PHP).

Homelessness

11. If a council is satisfied someone is eligible and unintentionally homeless it will owe them the relief duty. The relief duty requires the council to ‘take reasonable steps’ to ensure the applicant secures accommodation for at least six months. The reasonable steps can include sourcing and providing accommodation.
12. The relief homelessness duty ends under a number of circumstances, including when the applicant has suitable accommodation for at least six months. For accommodation to be suitable it must be affordable. An applicant has the right to ask the council to review the suitability of the accommodation it offered and following that, can appeal to the county court.
13. If, after the relief housing duty ends a person’s circumstances change, the council can consider a new application for accommodation or help in obtaining accommodation.
14. The Council's housing allocation policy says it can make a direct offer of social housing to someone who is in ‘exceptional circumstances’.

Discretionary Housing Payments

15. The discretionary housing payments guidance manual issued by the Department for Work and Pensions says a discretionary housing payment (DHP) may be awarded where a council considers a claimant requires further financial assistance towards housing costs and is entitled to either Housing Benefit (HB) or the housing cost element of Universal Credit (UC).

What happened

16. The Council accepted it owed Miss X the relief homelessness duty in January 2020. In late June 2020, the Council made Miss X an offer of private rented accommodation with a tenancy lasting two years. Miss X is affected by the benefit cap. The benefit cap is a limit on the total amount of benefit a person can get when they are not in work. This left Miss X with a weekly shortfall of around £260 per week. Miss X said that before she accepted the offer, the Council told her it would award her a DHP to cover the rent shortfall. Council records state “[Miss X] is benefit capped but as property is in our borough, DHP will cover the cap”. On that basis, Miss X accepted the property offer, which ended the Council's relief homelessness duty.
17. In August and September, the Council sought information to decide what DHP award to make. It told Miss X DHP’s were only for short-term use and advised that if she could find work for at least 16 hours per week she would receive Working Tax Credits and would be able to pay her rent. Miss X felt that was not feasible as she has a young child and no childcare.
18. In September Miss X sent the Council copies of her bank financial information. Council records show it accepted it was not feasible for Miss X to start work because she had no childcare. However, it felt Miss X’s finances suggested she was not managing her income and expenses appropriately and should be able to contribute to her rent.
19. In late September, the Council awarded Miss X a DHP to cover 30% of the rent shortfall from June to October 2020 providing she engaged with a budgeting support service. Miss X attended the budgeting support but was unhappy with the Council's decision to only award 30% of the shortfall and complained. The Council accepted that before Miss X accepted the tenancy, it wrongly told her that her benefits would cover the entire rent. It therefore agreed to use a DHP to cover the entire rent shortfall for the first six months of the tenancy; from June to January 2021.
20. In March 2021 Miss X made another application for a DHP. She said she had not been able to pay the rent shortfall after the DHP ended and was in arrears. She said her landlord was threatening to take her to court to evict her. The Council again spoke to Miss X about making a contribution towards the shortfall. Miss X said she could not so the Council decided to make a further DHP to cover the rent shortfall from January to April 2021. The Council said after that date Miss X could reapply for another DHP but it would expect her to make a contribution to her rent.
21. Miss X complained again in May 2021. The Council said it would not pay the DHP beyond April 2021 because it was unsustainable. It had already made DHP’s of around £11,000 total and felt it had remedied the mistake in giving her the wrong advice. The Council encouraged Miss X to consider what she could pay towards her rent and said it would look at paying the remainder. Miss X told me she refused to make a contribution because she is a single mother who cannot afford to make any payments and because the shortfall occurred because the Council made a mistake. She therefore feels she should not be liable for it. Miss X also said her landlord was again threatening to take her to court to evict her.

Findings

22. The Ombudsman cannot question a council's decision if it is made without fault. Records show the Council was aware Miss X was benefit capped would need a DHP to cover the shortfall in her rent. While the Council may have intended that Miss X would seek work to supplement her income and pay for the shortfall, she did not have employment at the time the Council made its offer. Given this and the size of the shortfall, I am not satisfied the Council properly decided the property was suitable before offering it to Miss X and ending the relief homelessness duty. This was fault.
23. The Council has acknowledged it gave Miss X wrong information when she accepted the tenancy. This was fault and caused her avoidable distress. The Council's information led Miss X to believe the Council would award her a DHP to cover the rent shortfall throughout the tenancy. It would not therefore be feasible to expect Miss X to have used her right of review to challenge the suitability of the accommodation at the time.
24. After the Council accepted it gave Miss X the wrong information, it awarded her a DHP to cover the rent shortfall from June 2020 to January 2021. In March 2021 it gave a second DHP to cover the period from January to April 2021. It then decided it would not make any more awards without a contribution from Miss X. Miss X did not agree to make a contribution so the Council has not made another award. DHP’s are discretionary and the Council is entitled to decide how and when it will award them and how long they will last. The Council considered the relevant information including Miss X’s personal circumstances, its involvement in her decision to accept the tenancy and her finances before deciding not to award a further DHP. There was no fault in the Council’s decision making so I cannot question its decision.
25. However, in March 2021 Miss X told the Council her landlord was threatening to evict her due to the rent she owed. Since the last DHP ended in April 2021, Miss X has accrued significant rent arrears and her landlord is again threatening to evict her. There is no evidence the Council considered whether Miss X was threatened with homelessness after the landlord’s threat and whether it therefore owed her the prevention duty. There is also no evidence the Council considered whether it still owed Miss X the relief homelessness duty given the unaffordability of the property meant it was unreasonable for her to continue to live there. The Council was at fault for failing to consider whether it owed Miss X a homelessness duty. This also caused Miss X avoidable distress.
26. While there was no fault in the Council's decision to end the DHP, it meant that Miss X accrued significant rent arrears. But for the faults I identified in paragraphs 21 and 25, Miss X would not have accepted and stayed in the unaffordable tenancy and accrued the arrears. I have therefore recommended the Council pay Miss X’s rent arrears and ongoing rent shortfall until the end of the tenancy or until it can move Miss X to a new suitable property.

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Agreed actions

27. Within one month of the date of my final decision, the Council will make a meaningful apology to Miss X for the distress caused by the faults identified in this decision.
28. As soon as possible, and no later than within a month of the date of my final decision, the Council will decide whether it owes Miss X a homelessness duty and write to her with its decision.
29. Within one month of the date of my final decision, the Council will pay Miss X’s rent arrears. It should continue to pay her rent shortfall until the end of her tenancy in June 2022, or until it is able to move her to new suitable accommodation; whichever comes first.
30. Within three months of the date of my final decision, the Council will:
• remind staff they must consider whether someone’s accommodation is affordable when deciding to end the relief homelessness duty; and
• remind staff that significant rent arrears and threats of eviction should both trigger consideration of whether the Council owes a person a homelessness duty.

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Final decision

31. I have completed my investigation. I have found evidence of fault leading to personal injustice. I have made recommendations to remedy that injustice and prevent the fault occurring again.

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Investigator's decision on behalf of the Ombudsman