Summons cost removed in exchange for agreeing direct debit payment

The Local Government and Social Care Ombudsman did not have the information requested.

Dear Local Government Ombudsmen,

Please refer to paragraph 22 of the report of the investigation into Birmingham City Council (16 018 815)

http://www.lgo.org.uk/decisions/benefits...

" 22. Unhappy to have received the summons, Mr A rang the Council. He was advised that now he had a summons the Council could set up a special payment arrangement over 12 months if he agreed to pay by direct debit. The Council says it told him that if he did this and kept to the payments the cost of the summons would be removed at the end of the arrangement."

The report states (paragraph 19) that Birmingham City Council imposes standard summons costs of £69. Information obtained, if it can be relied on, indicates that the number of Birmingham City Council householders who are summonsed each year averages around 90,400.

Assuming 20% of those summonsed agree to a payment arrangement and have their court costs waived for taking up direct debit, then the costs would be payable by 18,080 fewer customers (72,320 as opposed to 90,400). However, the expenditure incurred by the council in respect of the 18,080 customers who have benefited from the concessions has to be paid (subsidised) by those who have not or were unable to take up the offer of a special payment arrangement.

A calculation based on (i), an assumed 20% summonsed agreeing to an arrangement, (ii) assumed total recoverable costs of around £5 million, demonstrates that the summons costs have to be artificially inflated from £55 to £69 in order to subsidise the waived court costs element.

90,400 (summonsed) x £55 = £5 million (approx)
72,320 (summonsed where costs applied) x £69 = £5 million (approx)

The standard costs have had to be increased by £13 but ironically it is those causing Birmingham City Council the majority of work in respect of dealing with the enquiry, setting up payment plans and the ongoing monitoring of those accounts (driving the activity) who have not paid anything whilst those settling their liability, causing insignificant extra work, subsidise those costs.

See Paragraphs 39, 97-101 (Annex A) for further clarification
http://taxpayersagainstpoverty.org.uk/wp...

Clearly, as set out in the High Court judgment (link below), to divide what is considered the total recoverable expenditure by the number of customers summonsed would be an unlawful approach if it involved the practice of double-counting/artificially inflating the costs.

http://www.bailii.org/ew/cases/EWHC/Admi...

'46. In principle, therefore, provided that the right types of costs and expenses are taken into account, and provided that due consideration is given to the dangers of double-counting, or of artificial inflation of costs, it may be a legitimate approach for a local authority to calculate and aggregate the relevant costs it has incurred in the previous year, and divide that up by the previous (or anticipated) number of summonses over twelve months so as to provide an average figure which could be levied across the board in "standard" cases..'

There were obviously grounds which warranted further investigation of the complaint by the Ombudsman, i.e. the investigation into the legality of inflating the summons costs to fund concessions for switching to Direct Debit.

Why then was it stated in the Final Decision the following?

"While there was fault by the Council in relation to some of its communication with Mr A, there are no grounds which warrant any further investigation of the complaint by the Ombudsman."

Yours faithfully,

Gerard Sherborn

Foi Officer, The Local Government and Social Care Ombudsman

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Foi Officer, The Local Government and Social Care Ombudsman

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Dear Mr Sherborn

Please find attached a letter in response to your request below.

Yours sincerely

Hilary Pook
Information & Records Manager | DL: 0330 403 4734 |
Local Government and Social Care Ombudsman's office |
www.lgo.org.uk |

Foi Officer, The Local Government and Social Care Ombudsman

2 Attachments

Dear Mr Sherborn

Please find attached a letter in response to your request below.

Yours sincerely

Hilary Pook
Information & Records Manager | DL: 0330 403 4734 |
Local Government and Social Care Ombudsman's office |
www.lgo.org.uk |

Gerard Sherborn left an annotation ()

Dear Mr Sherborn

Freedom of Information request

In your email of today’s date, you ask why the decision statement for case 16 018 815 says:

"While there was fault by the Council in relation to some of its communication with Mr A, there are no grounds which warrant any further investigation of the complaint by the Ombudsman."

You have quoted the final decision at the end of the decision statement. The rest of the statement sets out why that decision has been reached.

I cannot provide further explanation of any Ombudsman’s published decision. The Freedom of Information entitles requesters to recorded information. No further explanation of the decision is recorded, so the information requested is not held.

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