Camden News - by RICHARD OSLEY Published: 31 July 2008
Mentally ill woman hounded into bankruptcy over council tax debt
Investigation finds Town Hall guilty of failing to protect vulnerable resident from court action
CAMDEN Council has been found guilty of “maladministration” after bankrupting a mentally ill resident in pursuit of council tax. A revealing investigation found that even though the Town Hall knew the woman involved was unable to manage her own financial affairs due to her paranoid psychosis, nobody told the tax recovery officers who were chasing her.
And instead of backing off, officials called in bailiffs and persevered with one of its most punishing methods of pursuing unpaid tax by forcing bankruptcy through the courts.
The woman – who has been sectioned in the past and whose identity has been protected – owed around £5,000 in arrears when she was bankrupted by the council action in May 2005.
Her sister complained about the treatment last November, triggering a Local Government Ombudsman investigation.
The final report found against the council.
Camden must now hold its own internal review into why the woman was pursued so relentlessly despite a history of mental health running back several years.
Councillors have been invited to take part in the discussion.
Ombudsman Tony Redmond has called on the council to apply for the bankruptcy to be annulled and the council will inform credit agencies that the woman’s rating should not be adversely affected.
The case has already generated around £50,000 in legal fees which the Town Hall is likely to end up footing.
There is no demand for a compensation payment at this stage, although for the investigation to reach such a serious level is in itself a blow to the reputation of the council, which was recently celebrated as the best performing council ever, with record scores from government inspectors.
While all authorities are threatened with maladministration at some stage by angry residents, it is rare for complaints to reach this stage.
In their defence, council officials claimed it would have taken “extraordinary foresight” for tax collectors to think about checking social services records.
But Mr Redmond said the use of bankruptcy should not be taken lightly.
He said he “recommends the council changes its procedures to make stringent checks for potential vulnerability before taking action leading to bankruptcy.”
He added: “The failure to make effective internal enquiries led to unwarranted action against a clearly vulnerable lady. “This was maladministration.”
A council spokesman last night (Wednesday) offered “sincere apologies”, adding: “Based on what we have learned from this case, we have already put in place additional checks to prevent any bankruptcy proceedings being brought in cases similar to this one in future.”