Z2K helps client win complaint against Hackney Council

A recent case demonstrates some of the hardships which homeless people can experience when in emergency accommodation.  Through an unfortunate set of circumstances they can find themselves accruing charges which they previously were unaware they had to pay.  The below case outlines how a client was suddenly expected to pay Council Tax, following a Valuation Office re-rating from Business Rates to Council Tax.  It also highlights the unreasonableness of some boroughs who don’t take clients’ financial circumstances properly into account when they are in arrears.

Mr “L”, his wife and their two children were made homeless in September 2014.  He made a homeless application and Westminster City Council placed the family in emergency accommodation in Hackney.  Their accommodation was in a hotel, but was self-contained with a bedroom, living room and separate bathroom and kitchen.  Westminster provided a charge sheet stating how much Housing Benefit the family would get, the amount of rent they would be charged and the amount of service charge they would have to pay.  Council Tax wasn’t mentioned as the property was rated for Business Rates.

In July 2015, the Valuation Office re-rated the flat in which Mr L’s family was staying in from Business Rates to Council Tax.  This was backdated until 2010.  The Valuation Office sent this report on to Hackney Council.  However, Mr L himself was not notified about the changes until March 2016 when he received a notice stating, “New introduction of client responsibility for council tax.”  Three weeks later, he received a Council Tax bill of £1791.15 for the years 2014/15 and 2015/16.

In July 2016, Mr L received an invoice for £162 a month for these “arrears” – an arrangement he had not agreed.  A month later, after receiving a first reminder letter, he contacted Hackney and was told that he had no option but to pay the £162 a month.  Payment arrangements could only be made if there was a liability order incurring additional costs added to the arrears.  Mr L said that the he could only afford to pay £5 a week towards the 2014/15 and 2015/16 arrears as he also had to pay full council tax for the current year (2016/17).  Hackney council did not ask him for a means statement or offer any flexibility.  Unable to afford this, he paid £20 a couple of weeks later.  Hackney issued a default notice the following day.  No Final Reminder was sent, but a court summons was issued at the start of 2017.

Z2K was concerned at Hackney’s attitude, and so I submitted a complaint on the grounds that it should have made more efforts to establish who was in the property in July 2015, which would have reduced Mr L’s arrears.  I also argued that liability orders should not have been sought for these arrears before any payment arrangements were made as claimants incur additional costs, and that the Summons had not been issued properly as no final reminder had been sent.  More broadly, as well as questioning its refusal to allowing flexibility in the payments, I submitted that Hackney needs to introduce statement of means form, so it can accurately assess people’s finances and set up affordable payment arrangements.

In response, Hackney accepted it had not issued the court summons properly and knocked £50 off Mr L’s arrears.  This did not go far enough, and so I referred the complaint to the Local Government Ombudsman.  The LGO’s decision has just been published.  It concludes, “I can see no reason why Hackney Council could not enter into a repayment arrangement when Mr L first contacted it.  In fact, I consider it should have made such an offer when sending backdated bills in March 2016.”  The LGO also agreed that Hackney should have made more effort to establish who was in the property in July 2015 and ordered it to write off Mr L’s debt between then and April 2016.  In addition, Hackney was instructed to reduce his arrears further by £250.  Disappointingly, although it criticised Hackney’s refusal to enter a payment arrangement, the Ombudsman didn’t rule it should change its policy.

This judgement goes some way for Mr L and others facing Council Tax arrears.  However, I would argue that it should have gone further.  Local authorities really ought to properly establish what people’s means are when asking for arrears to be paid.  How else are they going to know if a resident can actually afford to pay the amounts requested?  By establishing a claimant’s circumstances, a local authority can save money by reducing the number of people who default.  In addition, use of statement of means and flexible payment arrangements could ease the stress on low-income residents and avoid administration, court and bailiffs fees, thus enabling residents to get out of the cycle of debt from having to borrow money elsewhere to pay their Council Tax arrears.  Even though the LGO hasn’t ruled using statement of means form is necessary, I hope Hackney will in future follow the good practice elsewhere by those authorities who do listen to those in arrears and agree to affordable payment arrangements.


Joanna Kennedy talks about a new scheme for support in court in July’s issue of “Magistrate”

Lola is a nurse from Burundi where she was raped and tortured. Her husband was murdered and she was separated from her children. She fled to this country where she was granted asylum and eventually reunited with her children. She is extremely grateful for all the help that she has been given which she would like to repay by building a new and productive life for herself and her children, although she is suffering from post-traumatic stress disorder.

She was housed by Hackney Council who are her landlords but the property is in fact in Islington. She applied for and was granted housing benefit but no-one told her about council tax or that she had to make a separate application for council tax benefit in Islington. Eventually, out of the blue she received a demand for £836 council tax. She obtained benefit backdated for six months but then faced a summons for £533 including costs.

Lola lives on a very low income and paying this sum would literally take food out of the children’s mouths. The benefits system recognises in principle that she cannot pay but in practice cannot help. Z2K is a charity which helps those on low incomes facing debt and summonses. She came to us on the brink of the hearing of the summons because she was terrified of going to court. We sent someone with her as a McKenzie Friend who arranged for the hearing to be adjourned. We then reminded the council of its power to remit tax under s13A  Local Government Finance Act 1992. Eventually it agreed to reduce the demand to £318 for which it still insisted on obtaining an order. A McKenzie Friend went with Lola to court again to discover that the council, having agreed the reduction, still sought £418, so the McKenzie Friend helped challenge this: without her an incorrect order would have been made.

McKenzie Friends Project

Lola’s story is extreme but it shows that there are people who face council tax summonses who are not at fault, who are terrified of going to court and who need help. Councils bring computerised lists of alleged council tax defaulters to court seeking liability orders. Sometimes those applications need challenging for all kinds of reasons but most unrepresented litigants, especially those with difficulties with English or literacy or with mental health issues, are incapable of doing that without help.

Lola was referred to us before the hearing but many more simply turn up at court frightened and bewildered. There may be good reasons why the claim should be investigated but anyone with articulacy problems or lack of confidence is unlikely to persuade the council tax officer not to steam ahead to obtain an order and even less likely to persuade the court that there are issues that need scrutiny.

The recent cuts in legal aid and to advice centres budgets mean that there is no publicly funded advice available for any kind of debt including council tax.

Z2K joined with LawWorks (the umbrella body for solicitors’ pro bono work) and the College of Law to devise a ‘duty’ volunteer McKenzie Friends scheme which will provide a McKenzie Friend for all those who turn up to court facing a council tax summons. The McKenzie Friend will help negotiate a manageable outcome with the council officer and there will only be a dispute in court if a sensible outcome cannot be agreed.

We will start with a six-month pilot scheme in Brent Magistrates’ Court from September 2011 dealing with Brent’s Council tax list. The ‘Friends’ will be law students whom Z2K will train. They will be supervised, we hope, by retired magistrates who might be interested in this work, which we intend to develop into dealing with other issues in due course. Any retired magistrates reading this who would be interested in helping, please contact me at the e-mail address below.

The Brent judges have been very encouraging and we believe this scheme should be welcomed with open arms by all magistrates. It should improve the functioning of the council tax list and produce more just outcomes. We also propose an information campaign which will mean that more of those summonsed will attend if they know there will be help available.

Without a McKenzie Friend, Lola would have suffered more stress which would have impeded her recovery and damaged her children. This scheme will provide similar help for all the other Lolas out there.

Joanna Kennedy is the chief executive of Z2K. Contact her via e-mail on: