Gateshead Metropolitan Borough Council (202233311)

REPORT

COMPLAINT 202233311

Gateshead Metropolitan Borough Council

13 November 2024

Our approach

The Housing Ombudsman’s approach to investigating and determining complaints is to decide what is fair in all the circumstances of the case. This is set out in the Housing Act 1996 and the Housing Ombudsman Scheme (the Scheme). The Ombudsman considers the evidence and looks to see if there has been any ‘maladministration’, for example whether the landlord has failed to keep to the law, followed proper procedure, followed good practice or behaved in a reasonable and competent manner.

Both the resident and the landlord have submitted information to the Ombudsman and this has been carefully considered. Their accounts of what has happened are summarised below. This report is not an exhaustive description of all the events that have occurred in relation to this case, but an outline of the key issues as a background to the investigation’s findings.

The complaint

1. The complaint is about:
   1. The increase in service charges for the heating.
   2. The landlord’s response to the resident’s request to control the level of heating in her property and to be proportionately billed for specific usage.

Background

2. The resident is a secure tenant of the landlord, a local authority. She occupies a 2-bedroom flat in a multi-storey block with her husband who has chronic obstructive pulmonary disease (COPD) and cancer. There are three blocks in this housing scheme, and the space heating and water heating is provided by a district heating network. The resident pays for heating via a service charge.
3. On 1 March 2023 the landlord contacted the resident advising of an increase in the weekly heating charge from £9.63 to £26.59 with effect from 3 April 2023. Subsequently, the resident contacted the landlord with her concerns about this increase. The landlord replied on 17 March 2023, saying the service charge increase was part of the wider context of the cost-of-living crisis. It provided a full explanation of how it calculated the weekly heating service charge and explained that it had no control over the cost of energy it used and that the energy element of the service charge was calculated to recover the cost of the energy bill for the blocks. It anticipated there would be a reduction in weekly service charges from April 2024. It added that it had plans to carry out investment work, namely installation of heat interface units (HIUs), which would allow residents to be billed individually for the energy they actually use, and hence residents would no longer pay a standard heating charge as part of the service charge, regardless of the amount of space heating/hot water they use, as was the case at present.
4. The resident responded to the landlord on 20 March 2023. She said she was aware of plans to structurally upgrade the blocks and explained that, while she expected some increase in the heating charge, she felt that the level of increase was extreme, particularly as she was not in control of how much heating was used. She queried if the space heating can be switched off for individual flats. The next day, the landlord recognised her concerns and explained that, due to the setup of the heating system within the blocks, disconnecting individual flats would not resolve the increases in the heating charge or issues relating to the heating in the building during the summer months. It assured her that the planned investment in the blocks would resolve these issues and it would communicate with residents regarding the likely outcomes, which it expected to include reduced service charges.
5. After the resident’s efforts to lobby the landlord, she said that it wrote to her on 30 March 2023 with a reduction in heating charge of £2 per week. On 27 April 2023 the resident asked to escalate her complaint to stage 2. She objected to the increase in energy charge as she said she rarely uses the space heating and she did not want to pay for something she was not using. She said that the number of occupants of a household was not taken into account by the landlord when calculating the heating charge, as it was calculated only on the size of the property.
6. On 12 May 2023 the landlord issued its stage 2 response. It said the heating in the block was supplied via a communal heating system and, as there was no way of identifying consumption by each individual flat, residents paid for their heating by way of a service charge. The heating element of the service charge was calculated on the basis of cost recovery, in that the landlord computed a charge for the residents as a whole based on what was used or projected to be used by the blocks and on the cost of energy it sourced at that time. It also said that the service charge payable by a property was dependent upon the number of bedrooms in that property. The landlord confirmed the heating energy was supplied by Gateshead Energy Company (GEC), owned by the council. GEC paid its own supplier for the energy on a commercial basis and recharged the council on a non-profit basis. It provided information about support available to residents should they struggle to make payments and require assistance. It acknowledged the dissatisfaction from residents about the lack of control they have over their heating consumption and said that this would be addressed through planned investment with the installation of HIUs to all homes in the building. These would work like a meter and allow residents to be charged individually for their usage.
7. On 17 May 2023 the resident asked to escalate her complaint to stage 3. She said the issue with district heating had been regularly complained about since 2015. She said that residents were now having to pay more than a 100% increase for heating that, in some cases, they were not using.
8. On 30 May 2023 the landlord issued its stage 3 final response. It apologised that her service charge had risen and that this was not linked to a lack of investment but rather to wider changes in the energy market. It said that a structural survey necessary to carry out prior to installing HIUs was carried out in spring 2023 but this had been delayed by pressures within the housing and construction sector associated with the building safety agenda and the COVID-19 pandemic. Work would then commence on specifying and designing the insulation and façade improvements to the blocks and further engagement sessions would be held with the residents during summer 2023. It noted that the stages of development, investigation, research and design that the project went through were key to ensuring that the planned work would meet the expectations of residents, be fit for the low carbon future and would be deliverable. It apologised that the resident may have felt nothing meaningful had been happening but assured her that a significant amount of work had and would be taking place in order to deliver the scheme which would include the installation of HIUs.
9. The resident had previously referred her complaint to the Ombudsman on 22 March 2023 and she advised, following the landlord’s stage 3 final response, that she remained unhappy. As a resolution, she wants to pay for only the amount of heating that she uses. The resident subsequently advised this service that from 1 April 2024 the weekly heating charge was reduced from around £24.59 to £12.62. She said that she and other residents had held back on paying the full increase which they believed to be unfair because they were unable to monitor their own usage. She added that she had received, as a result of not paying the full service charge, a notice of seeking possession, but the landlord had taken no further action. In July 2024, the landlord informed residents in the blocks that it now planned to decommission the buildings and rehouse the residents because it had established that the originally-planned investments over the next 30 years were not economically viable.

Assessment and findings

Jurisdiction

10. What we can and cannot consider is called the Ombudsman’s jurisdiction, which is governed by the Housing Ombudsman Scheme. When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint, or part of a complaint, will not be investigated.
11. The resident pays for her heating via a service charge. In line with paragraph 42.d. of the Scheme, the Ombudsman may not consider complaints which, in the Ombudsman’s opinion, concern the level of rent or service charge or amount of the rent or service charge increase, as there are other routes that the Ombudsman considers more appropriate and effective. The Ombudsman also notes that the heating charge is within the remit of the supplier of heating energy and hence the complaint about the level of the heating charge was not a matter of housing management. Therefore, this investigation report will not comment on the complaint about the increase in the charge for heating. This would be better suited for the relevant energy supplier, should the resident wish to purse this further.

The landlord’s response to the resident’s request to control the level of heating in her property and to be proportionately billed for specific usage

12. When a resident raises a request with a landlord, the Ombudsman expects the landlord to consider this, and provide a timely and clear response, setting out its position. In this case, the resident lived in a block where space heating and hot water were provided by a district heating system. The resident moved into the property in July 2011 and the tenancy agreement signed at the time sets out that heating charges were paid via a service charge. The resident informed this Service that she is able to turn her radiators off, but there is still extensive heat from the hot water pipes in landing, ceilings and walls which provide hot water for washing and showering etc. The resident was unable to control the temperature within her property because of this and felt that it was unfair that an individual property could not be metered and was charged the same as a property of the same size irrespective of the number of occupants.
13. From the initial correspondence in March 2023, the landlord acted fairly by responding to the resident’s query and complaints in good time. It provided a clear explanation about why it had increased the service charges for tenants and how these were calculated. It appropriately recognised that this issue had been ongoing and reassured the resident that it had taken a number of steps as a prerequisite to the installation of HIUs. Indeed, the Ombudsman has seen that, from September 2020, the landlord undertook a number of actions including surveys and correspondence with various utility companies to ensure that investment work could be carried out in a way that would minimise disruption to residents. This was a suitable approach for large-scale major works.
14. The Ombudsman considers that the landlord’s correspondence of 17 March 2023 was a reply to a query. It did not constitute a formal stage 1 response. While the resident approached the Ombudsman in late March 2023 and we advised her to escalate her complaint, the landlord provided a stage 2 response on 12 May 2023 without a prior formal stage 1 response. In this regard, this was a minor shortcoming in the landlord’s complaint handling. It did not appear to issue a formal stage 1 response and should have endeavoured to do so after the request to escalate on 27 April 2023. Nevertheless, its responses were timely and set out its position. A recommendation has been made below.
15. In the resident’s complaint, she explained that her husband has an illness, and the level of heating in the property can cause him to overheat. The landlord acted fairly in its formal responses by empathizing and acknowledging the resident’s frustration and lack of control that residents had over the space heating. However, it is noted that, in the landlord’s submissions to this Service, it said there were no vulnerabilities recorded. This is concerning, as the resident explained the position regarding her husband to the landlord on 27 April 2023 prior to its stage 2 and 3 responses. In view of this, a recommendation has been made.
16. In the resident’s complaint to this service, she advised that she was able to turn the radiators off and this suggests that a resident has some degree of control over the level of heating within their property. However, the resident also said there was more than ample heat from pipes under the landing and behind walls, and explained it was still excessively hot, particularly in the summer months. She said that she tried to deal with this by opening windows and by using an electric fan to blow cool air, the latter action obviously resulting in some additional cost to the resident.
17. The landlord acted fairly by recognising the dissatisfaction of the resident in relation to the lack of control she and other residents have over their heating and by clearly explaining how it calculated the energy charges, apologizing for the fact that they had increased. It set out the work it had already carried out in order to progress the planned investment which included the installation of HIUs that would work like a meter and bill residents individually as opposed to through a service charge. This work included a number of surveys to establish work needed to ensure that block heat would be retained, including work on the building façade and upgrading of windows. This was a suitable approach as it appropriately managed expectations, provided assurance, and clearly set out the steps the landlord was planning to take to address the concerns of the resident and of other residents.
18. In November 2023, the resident advised this Service that she was unable to afford the heating charges. The Ombudsman notes that the resident said she had been served in February 2024 with a notice of seeking possession due to rent arrears arising from her withholding the amount of the heating charge increase. The landlord advised that the resident agreed that, once residents received a letter confirming a reduction in heating charges, she would contact its rent and income team to make payment arrangements. The landlord has commented that no further action is planned at this point. However, a recommendation has been made for the landlord to contact the resident about possible repayment options and to signpost the resident, where appropriate.
19. The Ombudsman appreciates that the landlord was unable to fulfil the resident’s request to control the level of space heating in her property and notes that it was in regular contact with the resident after her request. There is evidence that it engaged with the residents of the blocks by way of consultation and various residents’ meetings, and issued a letter in July 2024 explaining that the blocks had been recommended for decommission, which would involve rehousing residents. The landlord recognised the distress this would cause, and assured residents that they would have priority within the housing register for the new homes it intended to build. The resident advised that further meetings were held after July 2024, where rehousing plans were discussed including a home loss compensation payment. The landlord’s actions demonstrate that it was taking the resident’s concerns seriously and, further, was mindful of the impact on the resident’s well-being and of the time and trouble she had gone to in making and pursuing her complaint.
20. Although the landlord was unable to fulfil the resident’s request to control the level of space heating in her property, this lack of control applies to all residents within the building. Additionally, the landlord’s decision to charge residents based on the number of rooms was a reasonable approach. This was because the cost of energy for space heating was based on the size of the properties, rather than the number of occupants. This was fair and the landlord explained this within its formal responses. It is appreciated that the resident has difficulty in paying the increased heating charges, and this is likely to be the case for a number of other residents within the building. There is no evidence the resident was treated unfavourably by the landlord.
21. In the circumstances, while not diminishing the effect this situation had on the household in this case, there was no maladministration in the landlord’s handling of the resident’s request. Although the landlord initially explained to the resident the steps it intended to take to install HIUs, after research and investigation it found the level of investment required was not economically viable. It subsequently made plans to decommission the building and told residents of this decision in July 2024. The plan to install HIUs was therefore not carried out.

Determination

22. In accordance with paragraph 42.d. of the Housing Ombudsman Scheme, the complaint about the increase in service charges for heating is outside the Ombudsman’s jurisdiction.
23. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration in the landlord’s response to the resident’s request to control the level of heating in her property and to be proportionately billed for specific usage.

Recommendations

24. The landlord should:
    1. Review its staff training needs regarding their application of complaints, and the Ombudsman’s Complaint Handling Code, to prevent recurrence of its complaint handling shortcoming in this case.
    2. Signpost the resident to any available support services for residents struggling with increased heating bills. It should also reach out to her to discuss her options for paying off any rent arrears.
    3. Update its records to reflect the medical conditions for all parties occupying the resident’s property.
    4. Keep the resident updated about its plans to decommission the buildings and to provide rehousing for her and other residents, and continue to provide opportunities for receiving and answering questions about the matter. It should also provide reassurance that the new properties will allow adequate control of the heating in a property as well as individual property billing based on energy usage.