Surrey County Council (18 006 759)

Category : Adult care services > Charging

Decision : Not upheld

Decision date : 02 Jul 2019

The Ombudsman's final decision:

Summary: Miss B complains that, when assessing her mother’s contribution to her residential care home fees, there was fault in the way the Council decided not to exercise discretion to disregard the value of her mother’s share in the family home. The Ombudsman has found no substantive fault in the way the Council has considered the matter, and so cannot question the merits of the Council’s decision.

The complaint

  1. Miss B complains that, when carrying out a financial assessment to determine the contribution of her mother, Mrs C, towards her care home fees, the Council has:
    • failed to consider properly whether to exercise discretion to disregard Mrs C’s interest in her home;
    • failed to assess properly the value of Mrs C’s part interest in the property;
    • treated her unfairly, discriminated against her, subjected her to unreasonable delays, made false and unfounded allegations, causing her and her daughter uncertainty in respect of their housing security; and
    • not responded adequately to her complaints.
  2. This has caused her and her daughter prolonged distress and anxiety, and she has incurred substantial costs getting legal advice to challenge the Council’s position.

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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)
  3. The law says we cannot normally investigate a complaint when someone could take the matter to court. However, we may decide to investigate if we consider it would be unreasonable to expect the person to go to court. (Local Government Act 1974, section 26(6)(c), as amended)

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How I considered this complaint

  1. Miss B engaged a solicitor to represent her mother and started the pre-action protocol ahead of proposed court proceedings. I have therefore considered whether the Ombudsman should investigate her complaint or whether it would be reasonable for her to use the legal remedy available to her. However, in responding to the letter before claim, the Council suggested that the court might refuse the claim because there was another remedy available through the Council’s and the Ombudsman’s complaints procedures. In view of this, I have exercised discretion to consider Miss B’s complaint because I do not consider that it is reasonable to expect her to have to take court proceedings.
  2. In considering Miss B’s complaint, I have considered her written complaint and correspondence from Mrs C’s solicitor (the solicitor) and discussed the complaint with the solicitor. I have made enquiries of the Council and considered its response. I have taken into consideration the applicable law and guidance. I have also sent Miss B and the solicitor a draft decision and considered their comments.

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What I found

Legal and administrative background

  1. Local authorities have statutory duties and powers for providing support to people who meet local eligibility criteria, and for charging the person for services.

The Care Act 2014

  1. The Care Act came into force in April 2015. Section 14 of the Act explains the power of the local authority to charge for the cost of care. Section 17 says a local authority must assess the person’s financial resources and any amount the person would be likely to pay towards the cost of meeting the needs for care and support once it has decided on eligibility.

Care and Support (Charging and Assessment of Resources) Regs. 2014

  1. The regulations set out a local authority’s powers to charge, how financial assessments are to be carried out, the treatment of income and capital, and income and capital to be disregarded.

The Care and Support Statutory Guidance 2014 (Care Act 2014)

  1. Chapter 8 of the Care Act Statutory Guidance provides guidance on Charging and Financial Assessment and covers common issues for charging.

Treatment of capital

  1. Annex B of the Statutory Guidance covers the treatment of capital. The financial assessment looks at all of a person’s assets, decides which is capital and which is income, and assesses those assets according to the regulations and guidance. A local authority must therefore also refer to Annex C on the treatment of income and Annex E on deprivation of assets.
  2. In assessing what a person can afford to contribute, a local authority must apply the upper and lower capital limits. The upper capital limit is currently £23,250 and the lower limit £14,250. A person with assets above the upper capital limit will be deemed to be able to afford the full cost of their care.

Mandatory property disregard

  1. In certain circumstances, the value of the person’s main or only home must be disregarded. These include where the person no longer occupies the property, but it is occupied in part or whole as their main or only home by a relative who is either aged 60 or over, a child of the resident aged under 18, or incapacitated. This mandatory disregard only applies where the property has been continuously occupied since before the person went into a care home.

Discretionary property disregard

  1. Section 42 of Annex B says that a local authority may use its discretion to apply a property disregard in other circumstances. However, it will need to balance its discretion with ensuring a person’s assets are not maintained at public expense. Section 42 provides an example of where it may be appropriate to apply the discretionary disregard: a friend gives up her own home to care for the person who wants to continue living in her own home. She has the early signs of dementia, is not assessed as having eligible needs, but would benefit from some occasional support. There is no suggestion at this stage that she may need care in a care home. After five years her dementia has reached the point where she needs to move to a care home. The local authority uses its discretion to apply the property disregard, as this has now become her friend’s main or only home.
  2. Section 43 says that a property may be disregarded when a qualifying relative moves into the property after the resident enters a care home. Where this happens, the local authority will need to consider all the relevant factors such as the timing and purpose of the move; if the principle reason for the move is to ensure the relative has somewhere to live as their main or only home rather than where a person moves into a property solely to protect the family inheritance. It says the purpose of the disregard in these circumstances is to safeguard certain categories of people from the risk of homelessness.
  3. Section 44 of the guidance suggests taking the following additional factors into consideration:
    • Was the relative occupying another property as their main or only home at the time of the previous financial assessment?
    • Could the relative have reasonably expected to have the property taken into account at the time they moved into the property?
    • Would failure to disregard the property result in the eligible relative becoming homeless?
    • Would failure to disregard the property negatively impact on the eligible relative’s own health and wellbeing?

What happened

  1. Miss B lived with her daughter in a private tenancy where the Council had placed her in 2006 in fulfilment of its housing duty towards her. Her mother, Mrs C, previously lived with her husband in the home that they jointly owned.
  2. In January 2015, Mrs C was diagnosed with the early stages of dementia. She was forgetful but independent and had capacity. Miss B provided support to her mother with shopping, housework and laundry, but was due to have an operation in early 2016. Miss B was concerned about how her mother would manage her personal care and how often she would need help in her absence. But the case notes also record that Miss B was concerned that she would not able to sustain her support for her mother in the long term. So, in October 2015, the Council started an assessment of Mrs C’s needs.
  3. Sadly, Mrs C’s husband then passed away. His 50% share in the family home passed to Miss B and her two brothers.
  4. After completing a needs assessment, the Council put a care package in place from January 2016 comprising four hours a week for shopping and domestic tasks. Later that month it added an additional hour a week to assist with Mrs C’s personal care. Miss B explained to the Council that her mother had mixed views about accepting the care, and in March 2016, she cancelled the package because Miss B was now able to provide support again.
  5. Miss B continued to provide support to her mother. She says that in June 2016 she decided that she needed to move in with her mother to provide this high level of support, and there was a trial period from then until October when she moved in. The Council has questioned this and considers that she moved in September with no trial period.
  6. In November 2016, Mrs C suffered a fall, resulting in a fracture. She was admitted to hospital. Four weeks later, she was discharged to a nursing home. In January and February 2017, there were a series of discussions involving the Council and the family about Mrs C’s care. A mental capacity assessment was undertaken which determined that Mrs C now lacked capacity. The family was concerned that if Mrs C returned home, she would refuse care, and this would leave her vulnerable. They therefore decided that she should move to a nursing home. She moved in March 2017.
  7. In May 2017, Miss B instructed a solicitor to represent her mother, to request a full financial assessment and to request that the Council exercise discretion to disregard Mrs C’s share of the family home. After a safeguarding incident, Mrs C was discharged to another care home in June 2017.
  8. Between June and October 2017, there was extensive correspondence between the solicitor and the Council about the discretionary disregard, emergency funding to cover the care home arrears, and the value of Mrs C’s share in the property.
  9. In August 2017, the Council instructed an independent valuer to value Mrs C’s 50% share in the property. This was based on two assumptions – that an investment would be realised when Mrs C had died (scenario 1) and when both Miss B and Mrs C had died (scenario 2). The valuation was completed in October 2017 and the valuer provided an upper and lower value for each scenario. The Council decided not to exercise discretion to disregard the property.
  10. In November 2017, the solicitor issued a letter before claim, ahead of a proposed judicial review of the Council’s decision. The Council sent the solicitor a copy of the valuer’s report.
  11. In December 2017, the solicitor requested a further valuation taking into account the presence of a minor occupant in the house, and the impact that this might have on the sale and value of the property. A roundtable meeting was held between the parties to try and reach an alternative dispute resolution.
  12. The Council responded to the letter before claim in March 2018. There was further correspondence on this until July 2018. This revised valuation added the assumption that investors would not try and release their investment until the date of Mrs C’s death and the date when Miss B’s daughter reached the age of 18. Miss B then complained to the Ombudsman.

My assessment

Failure to consider properly whether to apply the discretionary disregard

  1. Discretionary disregard guidance – The solicitor has explained that Section 42 of Annex B relates to paragraph 24 of Schedule 2 to the Care and Support (Charging and Assessment of Resources) Regulations 2014 which sets out capital to be disregarded. Paragraph 24 states: “The value of any premises occupied in whole or in part by a third party where the local authority considers it would be reasonable to disregard the value of those premises”.
  2. She has also explained that Section 43 of Annex B relates to paragraph 4(2) of Schedule 2 to the same Regulations. Paragraph 4(2) states: “A local authority may disregard the value of any premises which is occupied in whole or in part by a qualifying relative of the adult as their main or only home where the qualifying relative occupied the premises after the date on which the adult was first provided with accommodation in a care home under the Act”.
  3. She considers that Section 42 is relevant to Miss B’s circumstances and that the test for applying the discretionary disregard as to what is “reasonable” is an objective test in the case of Section 42. However, she considers that section 43 is irrelevant because it relates to circumstances where someone has occupied a property after a person has moved into a care home.
  4. Section 42 provides an example of a case where discretion might be applied. However, I do not consider that the Council is bound to the specific circumstances of this example. Rather, the Council’s task is to balance the reasons why it might exercise discretion against ensuring that an individual’s assets are not unnecessarily maintained at public expense. It does not seem to me that paragraph 4(2) of the Regulations is proscriptive in terms of factors the Council may take into consideration. I see no reason why the factors set out in section 43 and 44, and indeed other factors, may not be valid considerations. Moreover, I note that the solicitor has referred extensively to the risk of homelessness, though this is one of the factors set out in Section 43.
  5. As to the suggestion that there is an objective test of reasonableness, I do not share the solicitor’s view. I consider that it is for the Council to decide what weight to give to factors in favour and against applying its discretion and to decide whether it is reasonable to do so.
  6. The decision not to exercise discretion – the solicitor has set out a range of factors which she does not feel that the Council has properly considered.
  7. The Council explained that in its response to the letter before claim that it took into consideration factors such as:
    • the timing of Miss B’s move to the property and her motives for doing so;
    • the frequency and type of care provided to Mrs C and whether this represented a significant saving to the public purse;
    • whether the need for Mrs C to move into residential accommodation might have been foreseen;
    • Mrs C’s mental capacity;
    • the best interests decision that Mrs C remain in a care home and Miss B’s statement that she intended to ensure that her mother could remain at home;
    • whether Miss B sacrificed a secure tenancy and she and her daughter might be made homeless; and
    • whether they might be worse off because of the Council’s decision.
  8. There have been extensive exchanges of correspondence between the solicitor about the decision not to exercise discretion. The Council has explained its findings in respect of each of these factors and why it did not consider its reasonable to exercise discretion in this case. I have not commented on all of these points but comment below on some of the key issues raised by the solicitor.
  9. The Council has not questioned Miss B’s motivation for moving into her mother’s home but does not consider that there was a need for her to do so at that point or that this represented any significant saving to the public pursue. It did not consider that this level of care was such as to outweigh the cost to the public purse of disregarding Mrs C’s 50% share in the property. The extent to which the need for residential care was foreseeable is open to different views, but I note that Mrs C had a diagnosis of dementia from the start of 2015.
  10. In respect of the risk of homelessness, the Council considers that there is no immediate risk of homelessness because Mrs C may enter into a deferred payment agreement or rent an alternative property. As to the long-term cost to the public purse, exercising discretion to disregard Mrs C’s share in the property will result in a significant cost to the public purse. Clearly there are also potential cost implications for the public purse in respect of Miss B’s family circumstances, but I see no grounds to question the weight that the Council has given to the definite cost to the public purse of applying the discretionary disregard.
  11. I appreciate that Miss B and the solicitor disagree with the Council’s decision, but I see no fault in the way that the Council has considered this matter, so it is not for the Ombudsman to question the merits of that decision.

Inadequate valuation

  1. Independence – The solicitor questions whether the valuation can properly be viewed as independent. She says, in her firm’s experience, the Council has always appointed the same valuer. She considers that, if this is the sole valuer that the Council uses, this would undermine the report’s independence. She says the Council ignored her firm’s request for a second valuation from a new mutually agreed expert.
  2. The Council’s instructions asked the valuer to have regard to the Protocol for the Instructions of Experts and Practice Direction which accompanies Part 35 of the Civil Procedure Rules used in court proceedings. Although, the report was to be prepared ahead of any litigation, the Council advised the valuer that its overriding duty would be to the court and not to the person providing instructions, and that the valuer should provide an objective, unbiased opinion. The valuer accepted the instructions and confirmed that it had undertaken the valuation on this basis.
  3. I have considered the solicitor’s comments, but I see no reasonable grounds to question the objectivity of the of the valuation.
  4. Instructions to the valuer – The solicitor has questioned the independence of the valuation, as she considers that her firm should have been involved in drafting the instructions to the Council’s valuer.
  5. The Council has sought to establish the current value of a 50% share in the property at three separate trigger points. It set out the parameters it wished the valuer to use, and, as part of its instructions, it asked the valuer to consider “all material facts including those which might detract from any conclusions you reach”. It also advised the valuer that it should say so, if it considered that there was any matter on which it did not feel it could reach a definite conclusion.
  6. I see no fault in the way the Council has undertaken the valuation process. The valuer was able to reach conclusion on the current value of the share in the property. Had the valuer considered that there were deficiencies in the instructions provided which meant that it felt it was unable to reach sound conclusions, then the valuer was required to inform the Council of this. The valuer did not consider that to be the case.
  7. Lack of comparable sales – The solicitor has questioned the validity of the valuation on the basis that the valuer is not aware of an interest in a property being offered for sale in the specific circumstances provided (i.e. the property owner being in residential care).
  8. The valuer has confirmed that there is a small market in reversionary interests where a life tenant has the right to remain in a property for their lifetime. The valuer has provided four examples. The valuer considers these to be broadly analogous to the present situation where an investor would buy an asset on the basis that they would be able to realise that asset at a future date. The valuer has then assessed the likely present value of Mrs C’s 50% share in the property, based the valuations on the annual returns implied by the sale of reversionary interests at auction.
  9. I note that there appears to have been no market specifically involving properties owned by care home residents. It may be may that these are not commonly offered for sale because care home residents have the more straightforward option of entering into a deferred payment agreement with Local Authorities, which avoids the need for such a sale.
  10. Since the valuer considers it possible to reach sound conclusions on the likely value of the 50% share in the property, based on current reversionary interest prices, I see no reason to question the Council’s reliance on the valuation.
  11. Valuation scenarios – The solicitor has said that it is not possible to know which of the three different scenarios on which the valuations were based is more likely to apply. So the valuation should be based on the average of the three valuations.
  12. The Council has used the value for Scenario 3, under which a sale would not take place until the date at which Mrs C had died and Miss B’s daughter had reached the age of 18. It did so on the assumption that the courts may not enforce a sale of the property while there was a minor living there, but that there was unlikely to be any impediment to a sale when Miss B’s daughter reached the age of 18.
  13. I see nothing unreasonable in the Council basing the valuation on the scenario under which it considers that an investor would most likely be able to realise their investment.
  14. Nil value – Mrs C’s solicitor has referred to an earlier Ombudsman decision which referred to the possibility of a property being of nil value. She considers that the valuation should therefore take account of this this possibility.
  15. The Ombudsman’s decision involved a complaint where no there had been no independent valuation and so is not directly comparable. In this case, an independent valuer has provided valuations. I see no fault here.

Unfair treatment

  1. Discrimination – The solicitor says that the Council has discriminated against Miss B as a carer and single mother. She considers the Council’s suggestion of Miss B’s discrimination claim as "somewhat underhanded and mischievous…" suggests that the Council has not explored the facts in a neutral manner.
  2. The Council has explored but rejected the claim of discrimination. Should Miss B wish to pursue such a claim, this would be a matter best dealt with by the courts.
  3. As to the suggestion that the Council’s language indicates a lack of neutrality, I note that the Council was responding to a proposed claim of judicial review, which it considered to be misconceived and without any legal basis. I do not see that it is for the Ombudsman to question the Council’s use of language in responding to a legal claim that it considers without merit.
  4. Delay – The solicitor considers that the Council has subjected Miss B to unreasonable delays. She says there was delay from May to November 2017 in obtaining a valuation from the Council, with no updates in the interim. She says there was a further delay between November 2017 and March 2018 awaiting the Council’s response to her letter before claim. She says this caused Miss B and her daughter uncertainty in respect of their housing security.
  5. The Council says that the solicitor requested a valuation after Mrs C was discharged from hospital to an alternative care home in June 2017. It arranged interim funding to secure the placement while enquiries were made. It also corresponded with the solicitor about whether a discretionary disregard would apply, in which case there would be no need to incur the cost of an independent valuation. The Council agreed to request a valuation in August 2017. It informed Mrs C’s solicitor that the process might take up to eight weeks, but that it would continue to provide funding in the meantime. The Council has apologised for the time taken but does not consider that this has caused any injustice.
  6. I appreciate that this process has been unsettling for Miss B and her daughter. But it seems to me that there were legitimate reasons for the Council not to commission an independent valuation while it explored the question of whether to apply a discretionary disregard. The valuation then took longer than the eight weeks stated by the Council, and there was a short delay before this was sent to the solicitor, but neither delay seems excessive. Furthermore, I do not see that this has caused Miss B significant injustice given that the Council continued to fund the placement in the interim.
  7. As to the response to the letter before claim, the Council has pointed out that it took three (rather than the claimed five months) to respond following the ADR meeting but explained that it needed to obtain information from a range of sources and reach a fresh decision.
  8. I do not consider that it is for the Ombudsman to comment on the time that the Council needed to respond to what was a pre-cursor to potential legal proceedings.
  9. Unfounded allegations – The solicitor says the Council made false and unfounded allegations about Miss B. For example, she refers to the Council wrongly alleging that Miss B had not properly inherited her share in her property from her father.
  10. The Council says it was necessary to explore the facts of the case and the reasons for Miss B’s actions when considering whether to exercise discretion in respect of the property disregard.
  11. It was for the Council to seek the information it required to reach a decision on Miss B’s request. In respect of the property ownership, whether or not the Council made an incorrect assumption, I see no grounds to pursue this further because the solicitor has confirmed that this was, in any event, soon resolved.
  12. Legal representation – The solicitor considers that Miss B unnecessarily incurred the cost of legal representation because the Council had refused to carry out a full financial assessment and would not carry out a proper valuation of Mrs C’s share in the property. She says Miss B made repeat enquiries of the Council, without receiving a response, and it was the Council’s intransigence together with the complexity of the issues that forced her to obtain legal advice.
  13. The solicitor’s chronology of events shows that Miss B appointed a solicitor shortly before the 12-week property disregard period was due to end. The Council has also explained that it did not initially carry out a full assessment because until May 2017 it understood that the family intended to obtain a mortgage to fund the cost of the care.
  14. I appreciate that Miss B may have felt the need to obtain legal advice given the potential complexity of the issues, and the personal and financial implications of the Council’s decision. But if she was dissatisfied with the Council’s response to her questions, I consider that it would have been reasonable for her to have raised these concerns through the Council’s complaints process and then with the Ombudsman. The Ombudsman could then have considered the Council’s actions and whether it had properly considered whether to exercise discretion.
  15. I do not therefore consider that the Council should be held responsible for the costs that Miss B has incurred in choosing to follow that approach.
  16. Inadequate complaint response – The solicitor has complained about delay in the Council’s complaint response.
  17. The Council has accepted that it could have managed the process leading to the initial decision in October 2017 better. However, it responded fully to the letter before claim and then to the formal complaint. It then gave Miss B an opportunity to contact a member of the Council’s Leadership Team, which was not taken up.
  18. While I note the delay in the initial decision, I see no fault in the way that matters were dealt with under the Council’s formal complaint procedures.

Final decision

  1. I have discontinued my investigation into Miss B’s complaint because I have not found substantive fault in the way that the Council has dealt with her request to exercise discretion to disregard her mother’s share in the property.

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Investigator's decision on behalf of the Ombudsman

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