Summary: Mr and Mrs X complained about Council failings in respect of direct payments, care assessments and financial assessments. The Council failed to respond to requests for information about direct payments and for new care assessments for several years causing distress and financial hardship. While some action has been taken including a new care assessment and reimbursement of overpaid contributions to Mrs X, there are outstanding issues in respect of Mr X’s holiday pay, hourly pay rate and annual audits. A remedy including payments for backdated pay and distress as well as service improvements is agreed.

The complaint

1. Mr and Mrs X complained about Council failings in respect of direct payments, care assessments and financial assessments.
2. They say it is unclear whether reimbursements for incorrect financial assessments are correct and whether Mr X has received the correct amount of pay for his work as a carer.

Back to top

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 significant injustice, or that could cause injustice to others in the future 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(1), as amended)

Back to top

How I considered this complaint

5. I considered evidence provided by Mr and Mrs X and the Council as well as relevant law, policy and guidance.
6. Mr and Mrs X and the Council had an opportunity to comment on my draft decision. I considered any comments before making a final decision.

Back to top

What I found

Direct payments

7. Direct payments are monetary payments made to individuals who ask for them to meet some or all of their eligible care and support needs. They enable people to arrange their own care and support to meet those needs. The council must ensure people have relevant and timely information about direct payments so they can decide whether to request them. If they do so, the council should support them to use and manage the payment properly.
8. The gateway to receiving a direct payment must always be through the request from the person. Councils must not force someone to take a direct payment against their will. They should not place someone in a situation where a direct payment is the only way they can get personalised care and support.
9. Councils must tell people during the care planning stage which of their needs direct payments could meet. However, councils must consider requests for direct payments made at any time and have clear and quick procedures in place to respond to them.

Key facts

10. This section sets out the key events in this case and is not intended to be a detailed chronology.
11. Mrs X has been in receipt of a package of care for many years. She is in receipt of direct payments and signed a direct payment agreement in 2010. The Council agreed that Mrs X could employ her husband, Mr X, to be her paid carer. This is an exceptional arrangement. The Council did not include any contingency details in either the direct payment agreement or Mrs X’s care and support plan to show how holiday and sickness would be covered. Mrs X uses a third-party payroll organisation to manage the payments to Mr X.
12. Mrs X made a formal complaint to the Council in December 2024. The Council sent a response to some parts of the complaint in February 2025. It said the care and support plan dated August 2023 did not provide the relevant detail regarding Mrs X’s care needs and how they could be met. It said it would carry out a complete reassessment. It also accepted that it had not provided sufficient information about direct payments and the role of the third-party payroll organisation. It said that despite Mrs X making many enquiries requesting information about holiday pay, payrates and contingency arrangements, it did not provide information. It said it would continue to liaise with Mrs X about this and that a carers assessment would look at Mr X's need for breaks.
13. The Council went on to say the care plan and discussions should have explained what was care and support and what constituted family life. It said the completion of the care plan reassessment and carers assessment would remedy this. It also accepted it had failed to progress an application for disability related expenditure made by Mrs X in April 2023. The Council provided evidence that Mrs X had made representations in May 2020 and October 2022 and 2023 about holiday pay and arrangements, a carer’s assessment and contingency planning. She also requested information about hourly pay rates and what the direct payment could be used for. The Council did not provide any response to these enquiries.
14. The Council upheld all aspects of Mrs X’s complaint accepting it did not give her the correct advice and guidance in respect of the management of direct payments. It said it would liaise with the third party payroll organisation in order to calculate any amount that was owed to Mr X.
15. The Council sent Mrs X a further complaint response on 11 March. It said it had used its discretion to investigate matters from 2011. It said it was still investigating the financial issues. The rest of the response was substantially the same as the previous letter.
16. The Council wrote to Mr X on 10 March regarding the overpaid assessed contribution by Mrs X. It said that after reconciling payments it found that Mrs X had overpaid an amount of £1,311.66 for the period up to 25 January 2025.
17. Mrs X escalated her complaint to stage two of the Council’s complaint process and it responded on 16 June 2025. In this letter the Council said it had reviewed the bank statements for the period 24 February 2019 to 25 January 2025 and determined Mr X was expected to contribute £4,180.98 but had made payments totalling £13,387.90. It said Mr X was entitled to reimburse himself the amount of £9,206.92 from the direct payment account. It apologised for this miscalculation. (I assume this should have said Mrs X as she was the service user and therefore the person making the assessed financial contribution).
18. A reassessment of Mrs X’s care needs was completed in April 2025. This identified an increase in care hours. The hours increased to 19.5 hours per week from 26 February and then to 23 hours per week from 1 April 2025. The Council also discussed the holiday situation with Mr X and it was agreed that as they would go on holiday together, that a higher hourly rate would be paid to Mr X. The Council repaid the holiday pay for Mr X back to April 2024.

Analysis

19. Mr and Mrs X’s complaint concerns direct payments and the failure to provide information to them. Mr and Mrs X made requests for information related to direct payments and their particular circumstances which exceptionally allowed Mrs X to employ her husband. Despite making repeated requests for information and advice the Council failed to respond. This is fault.
20. The Care and Support Statutory Guidance says the Council should review the making of the direct payment within six months of the first payment. It must then review the making of the direct payment every 12 months. It says this can take place at the same time as the annual review of the care and support needs but it is clear there should be a review of the direct payments and that the outcome must be written down and a copy provided to all parties. Councils must have regard to statutory guidance when carrying out their duties. This means councils can depart from statutory guidance, but if they do, they must have a good reason for doing so.
21. The Council did carry out annual reviews of Mrs X’s care and support but never reviewed the direct payments in line with the statutory guidance. The review would have enabled discussion about the amount of hourly pay, how Mr X would take a holiday, the amount of holiday pay Mr X was entitled to and why such a large balance was showing on the account. The failure to carry out annual audits, as required by the statutory guidance, or explain why it was not doing this, is fault.
22. It was only when Mr and Mrs X made a formal complaint in 2024 that the Council took action. It accepted it had not responded to requests for information about the direct payments and that it failed to provide sufficient information about the role of the third party payroll organisation. The complaint resulted in the Council looking into why there was a large surplus on the direct payment account and finding Mrs X had overpaid her contributions by more than £9,000. I am satisfied this overpayment has been repaid to Mrs X. However, the complaint response referred to Mr X in respect of the overpayment. While I have assumed this is an error and should have said Mrs X, I can understand how this caused confusion for the family as they were also raising queries about amounts paid and owed to Mr X.
23. The direct payment account, even after the reimbursement was made to Mrs X, had a surplus. The Council has recovered this money and says it did so in line with the direct payment agreement signed by Mrs X. However, I consider that at least some of this surplus will have accrued because Mr X’s hourly payment was not increased even though the Council uprates the hourly rate each year. Mrs X has now provided copies of the letters sent by the Council about the annual uprating of the DP. The letters are from 2020 to 2026. The letter for 2023 is not provided and Mrs X believes it was not sent. The Council has now provided a sample letter which is dated 2023 and this clearly sets out the percentage increase.
24. The letters from 2023 onwards are very clear in providing information and examples of how to uprate the hourly rate for carers. While the Council failed to respond to Mr and Mrs X’s requests for information about the direct payments, these letters provided clear information about the hourly pay rate and as pointed out by the Council, it is the responsibility of the disabled person, as employer, to take appropriate action in respect of pay.
25. However, the letters sent from 2020 to 2022 are not the same. They refer only to a percentage increase in the amount the Council is increasing the weekly DP amount. There is no mention of the hourly rate of pay or the amount it can be increased by. In 2022, Mrs X actually wrote to the Council about this letter saying she did not understand it and asking if this meant she had to increase her monthly contribution. While the Council responded clarifying her payment was not affected by this, there was no mention of increasing the hourly rate of pay.
26. In June 2022, Mrs X wrote to the Council asking if she could increase Mr X’s hourly rate of pay by 50p. The matter was referred to the care team manager to assist with this request however Mrs X says that no further response was provided. Mr X's hourly pay rate was therefore not increased.
27. I am satisfied the Council did provide appropriate information about hourly pay rates to Mrs X from 2023 onwards and that it was Mrs X’s responsibility to manage his hourly pay rate. However, the information provided from 2020 did not include any information about increasing the hourly rate and there is evidence Mrs X sought clarification on this very specific point and the Council failed to respond. So I am not satisfied it was correct for the Council to recover the amount of surplus that it did from the direct payment account and that it should have considered providing backpay for Mr X.
28. However, the Council failed to provide information about how Mr X would receive holiday pay. As he is married to the person he cares for, the situation is more complicated as they would not holiday separately. I am satisfied the Council acknowledges this is an exceptional situation and therefore it was at fault for not addressing the holiday pay issue. The Council has agreed to make a further backdated payment to Mr X of £4,216.12 to recognise this fault. I am satisfied this is appropriate.
29. The Council has told me it does not carry out formal audits, as required by the statutory guidance, but says it has arrangements in place it considers provides appropriate and effective monitoring. The evidence from this case does not support this position. Mrs X regularly sent in the bank statements for her direct payment account. This showed an increasing balance eventually of around £20,000, and it took no action. It eventually found that Mrs X had overpaid her contributions by almost £10,000 and the carer had not received holiday pay or received any annual increase. It is the purpose of the annual audit to notice issues such as this and ensure the money is being spent appropriately. While there may be adequate monitoring arrangements in place, the evidence in this case shows that there was a lack of interaction between officers carrying out the financial monitoring and officers with direct contact with Mr and Mrs X. A service improvement, along with a recommendation to audit Mr X’s account to give her reassurance that matters are now all resolved, is recommended.

Back to top

Action

30. To remedy the injustice caused to Mr and Mrs X as a result of the fault identified above the Council should, within one month of my final decision, take the following action;
• Apologise to Ms X for the fault identified. We publish guidance on remedies which sets out our expectations for how organisations should apologise effectively to remedy injustice. The organisation should consider this guidance in making the apology I have recommended;
• Make Mrs X a symbolic payment of £300 to recognise the distress caused as a result of the failure to respond to requests for information;
• Look at the hourly amount paid to Mr X from April 2020 to March 2023 and the hourly amount he should have been paid if annual uprating had taken place and reimburse the difference;
• Pay Mr X £4,216.12 which is the amount of backdated holiday pay calculated from 2022;
• Carry out an audit of Mrs X’s direct payments in line with the statutory guidance. This can be carried out at the same time as the annual review of her care and support needs but a written outcome must be provided as required by the statutory guidance; and
• Provide an action plan showing how it intends to address the issue of the lack of effective interaction between the financial monitoring and care planning processes to ensure similar issues do not occur again.
• Provide details of how the Council will ensure annual audits of direct payments are completed for all service users.
31. The Council should provide us with evidence it has complied with the above actions.

Back to top

Decision

32. 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.

Back to top

Investigator's decision on behalf of the Ombudsman