Good morning

Mick Roberts is a Nottingham based landlord, heavily invested in providing accommodation to benefit dependant tenants. Prior to the introduction of Universal Credit, he had become accustomed to dealing with 5 local councils. Within the council Housing Benefit sections he could email or phone named contacts and expect to secure responses within 48 hours. He also had had a means to escalate complaints to HB management and where problems couldn’t be resolved through mediation, he could either appeal to First-tier tribunals and/or refer cases on occasions to the Local Government Ombudsman (LGO). Overall, things worked really well for all concerned parties.

As increasing numbers of his tenants transitioned to Universal Credit, rental losses went through the roof. Mick anticipated this might happen to some extent, from the experience gained, during the first two years of LHA (2008-10), when the default position was to pay the tenant. So, he made sure he educated himself on the new Universal Credit scheme and was ready to intervene as soon as any of his tenants defaulted on rent payments. He immediately made application for redirection of the rent to him, using DWP’s Alternative Payment Scheme (APA). Regrettably, many of Mick’s efforts, in this respect, were completely undermined by a mixture of poor DWP policy (explicit consent) and practices.

He acknowledges some of his loss was caused by tenants misusing the “housing costs”, funds drawn from the public purse, designed to reduce or extinguish rental liability, nothing else. However, he cites DWP incompetence as the major cause of his losses, believing it repeatedly delayed to process APA requests; mislaid applications; continued to make further payments to delinquent tenants and generally failed to administer the Alternative Payment Scheme (APA) in accordance with its own set criteria.

He’s not alone in that belief, as the Independent Case Examiner (ICE) who examined his complaints of maladministration agreed that systemic DWP failures directly caused financial loss. However, instead of making a recommendation for “compensation” its lead officer, Ms Joanna Wallace, recommended DWP simply apologising for the losses sustained.

I have sympathy for Mick’s position as I’ve also been complaining to DWP and ICE, on behalf of many landlord clients, some referred to me by the RLA and others, and similarly seeking recompense for losses, sometimes in excess of £10,000 per landlord. Of the 20+ cases submitted, only 8, so far, have been decided, after a 2.5-3 years wait per case. In all 8 cases, ICE has upheld my complaints but, has again, refused compensation for my client’s loss.

In contrast, under Housing Benefit, landlords are recognised in the appellate process, as “persons affected” with rights of appeal to First and Upper-tier Tribunals. Where appeals are not possible, landlords can pursue a Complaints Process, administerd by the truly independent, Local Government Ombudsman (LGO) service.

Over the past 9 years or so, I’ve pursued LHA rental losses with the LGO and achieved significant successes. In one case, £7,000 was paid to my client for his wholly avoidable rental loss when payment of LHA had been agreed to be paid to the landlord but was “illegally” paid by mistake to the tenant. Some of these cases I’ve reported on the RLA’s website, various landlord forums, magazines, and my own website.

In a recently reported case  on the LGO’s website, the landlord was recompensed, in full, for her loss, after the LGO concluded it was caused by council maladministration. At the end of the report, the LGO author states:

“Para 20. Where the Ombudsman finds fault causing injustice we seek to put the complainant back in the position they would have been if the Council had not been at fault. The Council should therefore pay Mrs X. I acknowledge that it cannot pay housing benefit twice for the same period. However, Mrs X should be recompensed for the money she did not receive due to Council fault.”

In my experience, this has been the consistent approach of the LGO, over many years, in relation to LHA “direct payment” complaints, where the complaint is upheld. This is an entirely reasonable approach to adopt and one which ICE should have applied to DWP’s repeated mishandling of its APA scheme.

As well as the LGO, in Housing Benefit cases, we have Upper-tier Judges like the eminent, Judge Jacob’s decision R (H) 2/08, where he clearly is on the side of the landlord, where he/she experiences loss at the hands of the local authority. He acknowledges, he can’t make a duplicate HB payment, in terms of the HB regulations (Reg 98 offsetting provision), but urges the Council to pay “compensation”. Many first-tier tribunals have since followed suit, by urging councils to make ex gratia payments to recompense landlords in similar cases.

I’m now in the process of challenging ICE’s proposed “apology” remedy, via the Parliamentary Ombudsman (PHSO). ICE, while acknowlwdging DWP’s errors, believes landlords should pursue their rental loss with their ex-tenants, through the courts. We believe such an approach would be a complete waste of time & money, and would have been completely unnecessary, had DWP properly administered its APA scheme, in the first place. ICE’s proposed remedy, 2-3 years down the line from the original complaint was made, is completely unsatisfactory and represents, nothing less than, a classic case of “justice delayed, justice denied” and the proposed sanction not fitting the crime. The whole DWP “Complaints Process” needs to be urgently reviewed as it doesn’t even acknowledge landlords as potential complainants.

As things stand, unless we’re succesful in securing support from the Parliamentary Ombudsman, there is little point in landlords pursuing compensation, as the die has already been cast on multiple occasions. No matter how good a case you might think you have, as long as ICE’s view persists, about the need to demonstrate loss through the courts process, recompense is highly unlikely.

We’ll, most probably, have to wait another 9-12 months for an outcome. But as we’ve really no other realistic options available, we’ll just have to remain patient and hope ICE’s decision, on the question of how cases of this nature should be disposed of, is overturned.

Bill Irvine

UC Advice & Advocacy Ltd