The Local Government Ombudsman (LGO) has expressed concern about Thurrock Council charging an illegal £400 fee for administering a council tax payment plan it had agreed as an alternative to making a man bankrupt.
In a report issue on 11th Feb the LGO said the Council was at fault in charging the £400 “administration” fee for setting up the repayment plan. And “there is no legislation which allows for the fee to be charged…. The fee was introduced without reference to officers, members or the Council’s legal department and there appears to have been no scrutiny to ensure that the policy was legal.” The Council had charged this fee to 178 people and could potentially have generated a total of £71,200.
The Ombudsman is concerned that other councils may be charging this fee, and has written his report because it raises issues that are of a wider public interest.
Soon after the Ombudsman started to investigate the complaint, the Council accepted that there was no basis on which it could make the charge. It immediately stopped charging the fee and took steps to reimburse everyone who had paid it. The Council also decided to offer a goodwill payment to everyone who had paid the fee.
Nick Pearson, Director of External affairs at debt solutions experts, Baines and Ernst, commented “Anyone experiencing problems paying their council tax, or indeed any other debt, should seek professional advice as soon as possible.”