Summary: There is fault by the Council as it failed to get an independent valuation of Mrs X’s interest in a property as part of a financial assessment for her care home costs. The Council failed to act in line with Annex B of the Care and Support Statutory Guidance. The evidence shows the 12 week property disregard has been paid even though there is a dispute regarding the start date for this. A suitable remedy is agreed.

The complaint

1. Mr Z, on behalf of his deceased mother Mrs X, complained the Council has used the wrong date to consider his mother’s placement was permanent meaning the full 12 week property disregard was not awarded and the Council failed to follow the care and support statutory guidance in respect of the valuation of his mother’s share of a property.
2. Mr Z says he and Mrs X suffered financial loss and distress.

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The Ombudsman’s role and powers

3. 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)
4. If we are satisfied with an organisation’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

5. As part of the investigation, I have:
• considered the complaint and the documents provided by the complainant’s representative;
• made enquiries of the Council and considered the comments and documents the Council provided;
• discussed the issues with the complainant’s representative;
• sent my draft decision to both the Council and the complainant and taken account of their comments in reaching my final decision.

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What I found

Relevant law and guidance

6. Councils charge people for residential care. People who have assets above £23,350, including the value of a property are not entitled to council funding and arrange and pay for their own care. We expect councils to have regard to the Care and Support Statutory Guidance (CSSG) when carrying out financial assessments to determine whether a person is eligible for council funding. Annex B of CSSG says:
• Where ownership is disputed, a council should seek written evidence to prove ownership (paragraph 11).
• Valuation of an asset is the current market value minus 10% if there are expenses involved in selling it (paragraph 14).
• If the person and the council agree the value of the asset is over £23,250, then there is no need to get an exact valuation. If there are disputes, a precise valuation should be obtained (paragraph 16).
• Where a precise valuation is required, a professional valuer should provide a current market valuation (paragraph 17).
• Councils should try to obtain an independent valuation of the person's share within 12 weeks. The aim should be to resolve this as quickly as possible…..to enable the council to work out the charge and for the person to consider whether to seek a deferred payment agreement (paragraph 18).

(A deferred payment agreement is where the council loans the person part of the care fees up to the value of their share in the property and the loan is repaid when the property is sold.)

7. It also says an important aim of the framework is to prevent people being forced to sell their home at a time of crisis. A local authority must therefore disregard the value of a person’s main or only home for 12 weeks when they first enter a care home as a permanent resident (paragraph 45).

Key facts

8. On 8 October 2019, Mrs X took the decision to move into a residential care home. A week later, the Council completed a needs assessment which concluded she did not require residential care and her needs could be met in the community. Mrs X decided to remain in the care home and continued to pay the full cost of her placement.
9. In December the Council completed a further care needs assessment and concluded Mrs X’s eligible needs met the threshold for residential care. The Council contracted with the home to provide a place for Mrs X and completed a financial assessment.
10. Mr Z completed the financial assessment form on 30 December 2019. The Council then wrote to Mr Z on 26 February 2020. It said Mrs X became eligible for funding on 3 December 2019 and that she would need to pay £185.06 per week from 3 December to 30 December 2019. It said it would disregard the value of her property for 12 weeks from 8 October 2019 to 30 December 2019. It said Mrs X was entitled to the remainder of the 12 week property disregard from the funding date from 3 December to 30 December.
11. The Council said that from 31 December 2019 it had assessed that Mrs X would pay the full cost of her care fees directly to the home because she owned a property. It said there was an option to enter into a deferred payment agreement. This would mean Mrs X would pay £185.06 per week with the balance deferred against the property. It said she would shortly receive more information about this scheme and how it works. It said if she chose not to enter into a deferred payment agreement, she would be required to self-fund her care.
12. Mr Z wrote to the Council on 1 March 2020. He said that while he agreed with the assessment of the weekly charge of £185.06, he did not agree with the implementation date or the valuation of his mother’s capital. He said the 12-week property disregard should be applied from 3 December as this is the date she became a permanent resident. He said the care fees had been paid in full direct to the care home for the period from 8 October so a refund was applicable. He asked how the refund would be made.
13. Mr Z explained that Mrs X did not own a property but that she had a share of a property. Mr Z quoted Annex B of the Care and Support Statutory Guidance which states a local authority will need to work out what value a capital asset has in order to take account of it in the financial assessment. It also says that the current market value will be the price a willing buyer would pay to a willing seller. Mr Z said the value of a shared beneficial interest in a property depends on how attractive it is to purchase. He argued Mrs X’s share had no value and so she was not able to pay the full cost of her care. Mr Z said he had not yet received information about the deferred payment scheme but did not anticipate Mrs X could participate due to the limited value of her share of the property.
14. The Council replied explaining the Care Act requires a local authority to disregard the property of a care home resident for 12 weeks from when they first enter a care home as a permanent resident. They said that even though Mrs X entered as a self-funder, it considered her stay was permanent and so the property disregard began on 8 October. It said the care home would refund Mrs X directly for the difference between the assessed contribution of £185.06 per week and the self funding amount. It said the care home would confirm the exact amount and timescale of the refund.
15. In respect of the value of Mrs X’s share in the property, the Council said it was only assessing her 50% share of the property. It said a Land Registry document provided with the financial assessment form shows a valuation of £140,000 in May 2017. It said it believed her share was a minimum of £70,000. It said if Mrs X joined the deferred payment scheme it would request up to date valuations of the property. It said as the property is vacant it could be made available for sale in order to raise funds to pay for care fees. It said it considered Mrs X could pay the full cost of her care fees either by selling the property or entering into a deferred payment agreement and repaying the full cost later.
16. Mr Z contacted the Council again on 8 March 2020. He disputed that Mrs X was a permanent resident on 8 October as her admission was as a temporary resident for respite care. He questioned how she could be considered a permanent resident when the Council was not involved with her care. Mr Z also queried the valuation of Mrs X’s property share again. He quoted the Care and Support Statutory Guidance which says that where the value of a property is disputed, local authorities should try to obtain an independent valuation of the person’s beneficial share of the property within the 12-week disregard period. He noted this 12 week period had already passed due to delays in completing the financial assessment and requested an independent valuation.
17. The Council responded on 6 April 2020. It maintained its position that Mrs X became a permanent resident on 8 October 2019. It said that while Mrs X went into the care home by her own volition, she remained there as a resident and so is classed as a long term resident from this date despite the later care assessment on 3 December.
18. The Council said it had taken advice in relation to the property valuation required when joining the deferred payment scheme. It said that as the property was empty it considered it could obtain an order for sale of the property and so it considered the open market value of the property applied in this case.
19. Mr Z made a formal complaint on 1 April. The Council’s response of 21 April accepted there had been some delay in responding to his correspondence regarding the financial assessment for which it apologised. The Council maintained its position that Mrs X's move to the care home was permanent from 8 October and so the 12 week property disregard was correctly applied from that date.
20. In respect of the value of Mrs X’s share in the property, the Council did not agree with Mr Z’s position that her share had no value. It felt the property could be sold and that it could secure a charging order and a subsequent sale and the sale would be at market value. The response made no reference to the Care and Support Statutory Guidance that Mr Z had previously raised regarding how to resolve a dispute about the value of property.
21. Mr Z escalated his complaint to Stage Two of the Council’s complaints’ process. Mr Z complained the Council had failed to implement the provision of the Care Act 2014 and its associated statutory guidance in respect of the 12 week property disregard and the valuation of capital. The Council responded on 3 August saying it considered it had followed the law and guidance in respect of both issues and that Mrs X was liable for the full cost of her care home fees. The Council referred Mr Z to the Ombudsman if he remained dissatisfied.
22. Mr Z engaged solicitors and continued to correspond with the Council. The Council continued to pay the fees to the care home which ensured Mrs X was accommodated there until her death in July 2021. The Council sent an invoice to Mr Z requesting payment of the care home fees of £26,118.48. In January 2022, aware the property was being advertised for sale, it contacted the estate agent marketing the property seeking further information. It explained there was an outstanding debt and that it was considering taking out an injunction to prevent the sale and protect its position. It asked the agent to provide details of the solicitor so it could contact them about the situation.
23. It is my understanding that Mr Z and his brother settled the debt in full to the Council due to the possibility of an injunction jeopardising the sale. However, Mr Z remains dissatisfied and considers the Council did not act correctly.

Analysis

24. Mr Z raises two issues. I will deal with each in turn.

12 week property disregard

25. Mrs X was entitled to a 12-week property disregard from the time her placement at the care home became permanent. The Council and Mr Z do not agree what date Mrs X’s stay became permanent. Mr Z says the 12 week property disregard should begin from 3 December 2019 as that is the date the Council began funding his mother’s care. The Council says Mrs X moved in on 8 October 2019 with no intention to leave and so that is the start date.
26. The main issue in respect of this point, is whether the Council has correctly charged Mrs X and whether it ignored the value of her property for 12 weeks. Based on the information I have seen, I am satisfied the Council has done this. As a result, I am not persuaded it is necessary for me to decide what the correct start date is. In reaching this view, I have considered the law and guidance which does not help us to define the term “permanent resident” in this case. There is also nothing which links the term with needs or the assessment of needs.
27. During the 12 week property disregard period, Mrs X was required to make a personal contribution of £185.06. The Council completed the financial assessment and made a lump sum backdated payment to the home in April 2020. While the assessment took about two months to complete, I am not persuaded this amounts to significant delay. Mr Z has confirmed the care home refunded an amount of over £4,000 to his mother’s bank account on receipt of this payment from the Council.
28. In his letter of 1 March 2020, Mr Z explained the full fees had been paid directly to the care home and he requested a refund of £4019.28. Mrs X did receive a refund of more than the amount Mr Z calculated and so I am satisfied, on balance, that the 12 week property disregard was refunded to Mrs X via a payment from the home. Therefore, I find no fault by the Council in respect of the 12 week property disregard.
29. While I find no fault on that issue, I can see why Mr Z was confused and was not satisfied the correct charges had been made. The time taken to complete the financial assessment and the fact no payments were made until April 2020 and added to the confusion and uncertainty experienced.

Disputed property valuation

30. It is not the Ombudsman’s role to value Mrs X’s share/interest in the property, that is for the Council to do but we expect it to have regard to the Care and Support Statutory Guidance.
31. Annex B of that statutory guidance says councils need to get an independent valuation if there is a dispute about the value of a person’s share/interest in a property. That is the case here. Mr Z considered the value to be nil, the Council considered it was £70,000.
32. Mr X quoted Annex B in his letter of 8 March and requested an independent valuation. The Council’s response did not make any specific reference to this section of the statutory guidance but instead referred to valuations for a deferred payment arrangement. The Council was correct to offer such an arrangement but there is no obligation on anyone to accept this. I have not seen any evidence which shows Mr Z ever requested, or agreed to enter into, a deferred payment arrangement.
33. The Council’s failure to follow the statutory guidance and arrange an independent valuation of Mrs X’s share of the property was fault. There was clearly no agreement between the Council and Mr Z about the value and so it should have done this. Mr Z has been left not knowing what the outcome would have been if a valuation had been carried out in early 2020. I recommend below the action that should now be taken to remedy the injustice caused to Mr Z and Mrs X and put them back in the position they would have been but for the fault.

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Agreed action

34. Within one month of my final decision, the Council should instruct the Valuation Office Agency (VOA) to prepare an independent valuation of Mrs X’s share of the property. The valuation needs to be of Mrs X’s share/interest as of December 2019. The Council should share with Mr Z the information it intends to provide to the valuer in advance to enable him to provide any further relevant information.
35. Once the Council has the independent valuation, it should work out the date when Mrs X’s capital would have reduced to £23,250 and calculate whether a refund is owed to her estate and if so, pay it.
36. The Council should also apologise to Mr Z for the injustice caused to him as a result of the fault identified and pay him £250 to recognise his avoidable distress and time and trouble in pursuing this matter.
37. The Council should also review its procedures and ensure staff completing financial assessments are aware of Annex B of the Care and Support Statutory guidance and ensure they apply the guidance correctly.

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Final decision

38. I have completed my investigation with a finding of fault for the reasons explained in this statement. The Council has agreed to implement the actions I have recommended. These appropriately remedy any injustice caused by fault.

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Investigator's decision on behalf of the Ombudsman