Warwickshire County Council (19 018 344)

Category : Adult care services > Assessment and care plan

Decision : Upheld

Decision date : 30 Jul 2021

The Ombudsman's final decision:

Summary: Mr X complains the Council’s financial assessment of his mother’s assets was wrong. This made her responsible for all of her care fees. He also complained the Council wrongly refused to offer a deferred payment arrangement. We found the Council was entitled to take the position it did about the land his mother part owned. However, it failed to properly value the land. It also failed to consider exercising discretion about offering a deferred payment arrangement. The Council accepted its communications were confused at times and that it failed to offer Mrs X a suitable home within her personal budget. We recommended actions to address the injustice the fault caused.

The complaint

  1. Mr X complains that during a financial assessment of his mother’s assets, the Council wrongly concluded she had assets above £23,250. Mrs X’s home is a farm which she owns jointly with her son. The Council agreed it should disregard Mrs X’s home, the farmhouse, from the calculation of her assets. However, the Council considered agricultural land at the farm was an asset that should not be disregarded. Mr X states the farmhouse and the agricultural land are under the same legal title and could not practically be separated. Sale of the land would also deprive Mr X of his income.
  2. Mr X also complains that the Council refused to offer a deferred payment agreement and failed to respond to his complaint in a reasonable timescale. Because of the dispute, care fees have fallen into arrears because Mrs X does not have sufficient savings to pay for her care.

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The Ombudsman’s role and powers

  1. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
  2. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

  1. I considered Mr X’s complaint and the information he provided. I asked the Council for information and considered its response to the complaint. I also took into account relevant legislation, government guidance and case law.
  2. Mr X and the Council had an opportunity to comment on my draft decision. I considered the comments received before making a final decision.

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What I found

Care and Support (Charging and Assessment) Regulations

  1. Section 18 of the regulations state that all of someone’s capital should be taken account as part of their financial assessment, other than that which is specifically disregarded in Schedule Two of the regulations.
  2. Schedule Two says a council should disregard the value of any premises that is occupied, in whole or in part, by a ‘qualifying relative’ who occupied the premises before the person first become a care home resident. A qualifying relative includes a family member over 60 years old.
  3. Schedule Two lists a number of other areas in which assets should be disregarded. I found none of these to be relevant to Mrs X’s circumstances.

Care and Support Statutory Guidance

  1. Paragraph 8 of the guidance says “for the purpose of the property disregard, the meaning of ‘occupy’ is not closely defined. In most cases it will be obvious whether or not the property is occupied by a qualifying relative as their main or only home. However, there will be some cases where this may not be clear and the local authority should undertake a factual inquiry weighing up all relevant factors in order to reach a decision. 
  2. Sections 23 to 43 of the statutory guidance concern top-up payments. They state amongst other things that councils should ensure there are robust contractual arrangements and that there is clarity about how the care costs will be met, including any top-up element.

The Deferred Payment Regulations 2014

  1. The regulations set out circumstances in which a local authority must offer someone a Deferred Payment Arrangement (DPA). Broadly, a DPA must be offered to someone who has a need to live in a care home where:
    • The value of their main/only home has not been disregarded when assessing their financial circumstances.
    • The person has less than or equal to £23,250 in assets excluding the value of their main home.
    • There is security for the amount being deferred.
  2. A local authority has discretion to enter into a deferred payment agreement in other circumstances.

The Council’s Deferred Payments Scheme

  1. This policy sets out the criteria when the regulations require the council to offer a DPA (set out above).
  2. The policy also states it will consider applications to exercise discretion on an individual, case-by-case basis. One of the possible grounds for exercising discretion stated in its policy is whether someone has few limited accessible assets, where there would be difficulty in liquidating them to pay care fees.

Background

  1. The Council explained that during 2015 Mrs X had been receiving care at home. When arranging that care it carried out a financial assessment.
  2. Mr X confirmed that his mother jointly owns the farmhouse and the other property/land with his brother. His brother is over 60 years old and he lives in the farmhouse.
  3. At the Council’s request, the Valuation Office Agency (VOA) valued the farmland at £158,000 in August 2016. The Council recorded Mrs X’s half share in the land as a capital asset of £79,000 on her financial assessment. As Mrs X had assets over £23,250, the Council treated Mrs X as a full cost payer while she was receiving care at home.
  4. The Council provided a copy of the valuation report it commissioned for Mrs X’s land. The report stated the valuation had been based on the amount it would sell for “between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.

Mr X’s complaint

  1. Mrs X became a resident of a care home in December 2016. This followed a period in hospital. Mrs X’s placement at the home was arranged by the NHS. At that time Mrs X’s care was fully funded by the NHS under Continuing Healthcare (CHC).
  2. In July 2018 the NHS decided Mrs X was no longer eligible for CHC.
  3. The Council says it explained to Mr X, if Mrs X were to stay at the home, third party top-up contributions would be needed. This was because the cost of the home was more than her personal budget.
  4. Mr X agreed to consider beds in other care homes as the family were unable to contribute top-up payments. The Council says it made attempts to find other accommodation. It agreed temporary funding for Mrs X’s place at her existing care home while it did so.
  5. In the meantime, the Council completed a fresh final assessment. The Council disregarded the farmhouse itself because Mrs X’s son was over 60 years old and the farmhouse was his home.
  6. However, in August the Council told Mr X that it still considered Mrs X would be a full cost payer. This was because there was farmland attaching to the farm, which she part-owned. This was valued at £79,000 and it took Mrs X’s capital to above £23,250. In September 2018 the Council wrote to Mr X explaining that Mrs X would need to pay the full cost of her care.
  7. The Council found a suitable care home relatively near to the family home. This was within Mrs X’s personal budget but this was ruled out by the family. The Council says its officers considered the home was suitable to meet Mrs X’s needs, but it did not tell the family that was its position.
  8. On 25 January 2019 Mr X’s solicitor (referred to in this statement as Ms Y) challenged the Council’s decision to include Mrs X’s half-share of the farmland as an asset. She stated the farmhouse and the associated farmland were under one legal title with the Land Registry. The land was rented out to another farmer.
  9. In January Mr X spoke to a council officer and agreed to pay the third-party top up fee to enable Mrs X to stay at the existing care home. The officer set out what the costs would be. However, this discussion failed to take account of the Council’s stated position that Mrs X had to pay all of her care fees. If the Council considered Mrs X was a full cost payer, a top-up payment would not be relevant.
  10. The Council set out its view that although Mrs X’s son was an occupier of the farmhouse, he was not occupying the agricultural land. The Council noted the farmhouse and land were on the same title, but it argued they had been treated separately both legally and practically. This was because the agricultural land had been rented out to another farmer for many years, whereas the farmhouse had been occupied by Mrs X and her son. The Council stated, in its view, it was entirely possible for the land to be separated from the house and each registered under separate titles.
  11. Ms Y disagreed with the Council’s position. She stated it was not possible for Mr X to physically ‘occupy’ agricultural land and the Council’s suggestion that the land could be separated was conjecture. Ms Y stated the farm was one entity with one value and should be considered as such. She also noted Mrs X’s savings would soon fall below the £23,250 threshold and there was no way she could use the value in the land at her farm to pay for her care.
  12. On 22 March the Council wrote to Mrs X’s son stating that the care home she was in had been chosen for Mrs X and that it exceeded the contractual rate the Council would pay. The Council again stated Mr X would need to make a top-up payment for his mother’s care. Ms Y questioned this on 27 March, given the Council’s assertion that Mrs X was a self-funder. But, on 29 March the Council sent Mr X a further letter about a top-up arrangement.
  13. In early April the Council apologised for the confusion about the top-ups but it stood by its position that only the farmhouse, but not farmland, should be disregarded. The Council stated it was entirely possible to separate the land from the farmhouse and to sell some or all of it, without selling the farmhouse if Mrs X wished to do this.
  14. Ms Y disagreed and stated if the Council insisted on including the disputed land in the financial assessment it must offer a deferred payment arrangement secured by a charge on the land.
  15. At the end of June, the Council’s legal department considered the Council’s policy on deferred payment arrangements. They noted the mandatory criteria did not apply because Mrs X’s property had not been disregarded. The Council concluded that Mrs X did not meet the criteria for a deferred payment. The officer noted the Council needed to consider if Mrs X’s circumstances warranted exercising discretion.
  16. In October 2019 the Council confirmed its position was unchanged about the land being an asset. It also stated that Mrs X was not eligible for a deferred payment agreement. The Council did not explain its view on providing a DPA on a discretionary basis.
  17. In February 2020 the Council told us due to staff absence it had not yet considered the matter as an appeal. It stated they would contact Mr X and Ms Y about the appeal and decide it in four weeks. The Council did not respond to an appeal about the issue of the land until September 2020. When it considered the appeal, it did not uphold it.
  18. The Council paid Mrs X’s care fees since late 2018. It billed Mrs X for these, but it says no care fees have been paid while they have been in dispute over the Council’s approach to the financial assessment. As at April 2021, Mrs X had outstanding care fees of around £99,500. Of this, around £36,135 were top up payments. The top up represented the difference between Mrs X’s personal budget and the cost of the care home she was in.

Was there fault by the Council

The Farmhouse and Farmland

  1. There is no dispute that Mrs X’s farmhouse itself should be disregarded as an asset in accordance with the regulations. The complaint is a dispute about whether land included in the same legal title as the farmhouse can be considered a separate asset for the purpose of Mrs X’s financial assessment under the Care Act.
  2. It would be for the courts to decide whether the Council’s or Mr X’s interpretation of the regulations are correct. Statutory guidance does not cover these circumstances. There is no case law that considers this issue in the context of the Care Act. However, there is a case (R(IS) 3/96, CIS/767/1993) which considered a similar dispute in relation to income support regulations. The legislation is different, but the court held that farmland could be treated as separate from the dwelling that was the person’s ‘home’. In that case, the court considered the land could practicably and reasonably be sold separately.
  3. Although we cannot decide whether the Council or Mr X are correct, on balance, we found it was not fault for the Council to take the position it did. The Council has considered the practicability of separation and decided in the circumstances it could be separated from the farmhouse itself. I recognise Mr X and Ms Y take a different view on the practicalities of selling the land.
  4. That said, the same case (R(IS) 3/96, CIS/767/1993) also held that the unique circumstances of every case should be considered when considering the value of the land. In Mr X’s case, the Council obtained a valuation by the VOA. The basis of that valuation is clear. It valued the land based on a sale between a willing buyer and a willing seller.
  5. This does not take account of the specific circumstances here. Mr X’s brother is the half owner of the land, and Mrs X’s family clearly oppose the sale. Mr X’s brother is not a willing seller and he derives an income from the land. As there is not a willing seller, any sale of Mrs X’s half share could only be achieved by a court order. It is not clear the courts would order the sale of the land. These complicating factors would have to be taken into account when deciding the actual market value of Mrs X’s half share of the land, where the other joint owner is not a willing seller.
  6. So, we found the way in which the land was valued was flawed. It does not reflect the likely true open market value based on the specific circumstances. The complicating factors set out above are likely to have a detrimental impact to the open market value of the land. This could impact whether Mrs X is considered a full cost payer. The Council should arrange a re-valuation of the land to take account of the issues set out in paragraph 42 above.

Deferred Payment Arrangement (DPA)

  1. The Council has considered whether Mrs X met the criteria under which the Council must provide a DPA. However, it did not properly consider whether it should use its discretion to provide a DPA in Mrs X’s specific circumstances. This was fault.
  2. I note that in response to the complaint the Council has agreed it will review its decisions taking account of the discretion it has. It stated it will reconsider its position on whether the farmhouse and farmland should be considered separate assets. It will also consider whether it should use discretion to provide a DPA.
  3. These decisions should only be reviewed once the Council has obtained a proper market value assessment of Mrs X’s half share of the farmland as set out above.

Contact with Mr X about Mrs X’s care home and his complaint

  1. The Council accepted that communications with Mr X during the early part of 2019 were confused and contradictory. On one hand it told Mr X that Mrs X was a self‑funder, responsible for all of her care costs. On another it asked Mr X to sign an agreement to top-up the Council’s funding of the care fees. The confusion caused in this respect was fault. There was also delay in dealing with the complaint and appeal.
  2. The Council accepted that when Mr X advised the Council that the family could not afford to make top up payments, it should have offered Mrs X a suitable care home within her personal budget. Although it did some work to find alternative care homes it did not do this. This too was fault.
  3. The Council recognised its position about Mrs X’s care placement had been contradictory and confusing. So, the Council offered to write off the element of the outstanding care fees that related to top up payments. The Council stated once our investigation was complete and it had carried out the required actions it would review whether Mrs X was responsible for funding her own care. If the Council remains of the view that Mrs X is responsible for her care fees, it would then ask her representatives to address the remaining outstanding fees.
  4. The Council recognised there had been shortcomings in the way it dealt with Mrs X’s case and it apologised. It also offered to remedy issues it had identified. I am grateful to the Council for its approach in this respect. However, the issues it identified could have been recognised sooner, when Mr X and Ms Y were in correspondence with the Council. As Mr X was put to the time and trouble of raising a complaint with us, I have recommended the Council pays him £250 to recognise this.

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Agreed actions

  1. Within two weeks of our final decision, the Council agreed to:
    • arrange a re-valuation of Mrs X’s half-share of the farmland to take account of the issues set out in paragraph 42 above.
  2. Within four weeks of receiving the revised valuation, the Council agreed to:
    • reconsider its position on whether the farmhouse and farmland should be considered separate assets
    • confirm to Mr X if it still considers Mrs X is a full cost payer.
    • consider whether to use discretion to provide a Deferred Payment Arrangement.
    • Send an apology letter to Mr X and pay him £250 to recognise the time and trouble he was put to in bringing the complaint.
    • Confirm to Mr X that the Council has written off the top up element of the outstanding care fees and confirm, in the light of the actions above, what the position is regarding Mrs X’s outstanding care fees.

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Final decision

  1. There was fault by the Council. I have completed my investigation and closed our file on the basis the Council takes the agreed actions.

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Investigator's decision on behalf of the Ombudsman

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