Summary: The complainant complained the Council failed to include in her late mother’s financial assessment the valuation it had placed on her home resulting in her being liable for the full costs of her residential care. The complainant says the Council failed to seek an independent valuation as provided for under the Care Act 2014. The Council said it followed the correct procedure, considered the likely value of the property on the open market and this was not challenged for several years. We found the Council acted without fault.

The complaint

1. The complainant whom I shall refer to as Ms X, complains the Council failed to properly assess her late mother’s, Ms Y’s, property assets when assessing her for contributions towards her care costs. Ms X says the Council also failed to properly adjust the valuation of her property assets when her property was later sold following clearance of the site awaiting development.
2. Ms X wants the Council to accept the valuation it offered Ms Y. Not the value for which the family sold the land after they had paid for clearance of the site and gained planning permission for it.

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The Ombudsman’s role and powers

3. We can decide whether to start or discontinue an investigation into a complaint within our jurisdiction. (Local Government Act 1974, sections 24A(6) and 34B(8), as amended)
4. If 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)
5. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
6. 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

7. In considering this complaint I have:
• read the information provided with the complaint.
• Put enquiries to the Council and reviewed its responses;
• Researched the relevant law, guidance, and policy.
8. I shared my draft decision with Ms X through her representative and the Council. I considered the comments received before reaching a final decision.

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What I found

9. Councils can make charges for care and support services they provide or arrange. Charges may only cover the cost the council incurs. (Care Act 2014, section 14)
10. Councils must undertake an assessment of financial resources. (Care Act 2014, section 17)
11. The “Care and Support (Charging and Assessment of Resources) Regulations 2014”, and the “Care and Support Statutory Guidance 2014” set out the charging rules for residential care. When the Council arranges a care home placement, it must follow these rules when undertaking a financial assessment to decide how much a person must pay towards the costs of their residential care.
12. The rules state that people who have over the upper capital limit must pay for the full cost of their residential care home fees. However, once their capital has reduced to less than the upper capital limit, they only have to pay an assessed contribution towards their fees.
13. The Guidance recognises capital assets may have a current market value. The Guidance says where someone disputes the valuation a council has placed on a capital asset councils should try and arrange an independent valuation of that asset.
14. The capital limits, set out in regulations issued under the Care Act 2014, set the levels of capital a person can have and qualify for financial support from the Council. A person with assets above the upper capital limit will be responsible for the full cost of their care in a care home. The upper limit set is currently £23,250.

What happened

15. In November 2016 following Mrs Y’s admission to hospital after a fall the Council carried out a needs assessment and financial assessment. The latter recorded Mrs Y had savings below £23,250 and did not record she owned any property. However, a check at the Land Registry showed Mrs Y owned her home for which she paid £245,000 in 2005. Unfortunately, in 2013 fire destroyed Mrs Y’s home and neighbouring property. By 2016 this left Mrs Y and her neighbours with plots of land on which stood their derelict properties.
16. The Council’s needs assessment decided only a residential care home could meet Mrs Y’s care needs. The Council’s funding panel recognised that Mrs Y owned the land and decided to allow a 12-week property disregard to give her time to decide what to do with the land. At the end of the 12-week period Mrs Y became a self-funded client with the alternative of applying for a Deferred Payments Agreement. This would defer payment of the care fees to when Mrs Y sold her former home. At the end of the 12-week period the Council carried out a financial assessment which decided Mrs Y was responsible for the full costs of her care.
17. Mrs Y entered a home chosen by her family. In September 2017 the Council wrote to Mrs Y saying that because her former home no longer existed it had used the value of the land in its financial assessment.
18. In September 2017 Ms X emailed the Council complaining about the attitude of staff dealing with her enquiry about the costs or Mrs Y’s care. In that email she says, “I am aware that [the care costs] need to be paid, until the land is sold we do not collectively have the funds to pay”. The Council says Mrs Y’s care fees remained unpaid. Sadly, Mrs Y passed away in December 2018. The family sold the land and told the Council Mrs Y left an estate valued by HM Revenue and Customs at over £200,000.
19. In August 2019 the Council’s Housing, Planning and Communities directorate wrote to the registered owners of the plots of land (including Mrs Y) to see if they would sell. The Council was exploring plans to develop the land for social housing. The Council offered £15,000 for Mrs Y’s land. The letter setting out the offer explains that for the owner who would be building in isolation ‘the residual value remains at £15,000’ having allowed for costs of clearing the site. The Council says this reflected the value of the land if developed for social housing for which it would charge lower than commercial rents. Selling the land for different purposes the Council says would likely attract a higher valuation. The Council said this offer for the land did not constitute a valuation for financial assessment purposes.
20. In July 2020 Ms X’s representative contacted the Council disputing the Council’s valuation of the land in its financial assessment. Mrs X’s representative said the Council had valued it at £15,000. In the representative’s view that should be the value used in the financial assessment. The Council says this is the first time the financial assessment had been disputed. Therefore, the Council had not needed to arrange a valuation from an independent valuer. The challenge to the value came after the sale of the land for more than £200,000 and Mrs Y had passed away. In the Council’s view Mrs Y’s estate’s sale of the land for that price shows its true value.
21. The Council says that if the land sold as a vacant site in 2020 for over £200,000 then it must have been worth more than the upper capital limit of £23,250 in 2016. When carrying out the assessment in 2017 the Council knew Mrs Y had paid over £200,000 for the house. As the market stood in 2017, the Council believed the property had a value exceeding the capital limit of £23,250 even after the fire. Therefore, the Council says its financial assessment carried out in 2017 remained correct. The Council says it will not revise the financial assessment valuation and the estate should pay the full care fees.

Analysis – has there been fault leading to injustice?

22. My role is to decide if the Council properly considered the challenge to its financial assessment. It is not to decide the value of Mrs Y’s former property or to decide if her estate should now pay her care fees. That would be a matter for the courts to decide.
23. I have considered what happened between 2016 to 2018 and exercised our discretion to consider the issues because they are relevant to the complaint about what happened in 2020. Records exist that help me take a view on what happened so I can make a sound judgement.
24. When the Council assessed Mrs Y’s finances it granted a 12-week disregard of the value of the land on which her former home had stood. As part of the financial assessment the Council considered the likely value of Mrs Y’s home. The financial assessment decided Mrs Y had capital above the upper limit and therefore she would need to self-fund her care. The Council in line with the guidance sent the financial assessment to Mrs Y. It explained that unless Mrs Y entered a Deferred Payment Agreement, she would be liable for the costs of her care as a self-funder.
25. There is no record of anyone disputing the financial assessment during Mrs Y’s lifetime. The challenge came in 2020 after the sale of the land, not in 2017 when the family were in contact with the Council. The time to challenge the financial assessment is when it is issued. The family say the Council sent the original assessment to the demolished address but that did not prevent the family receiving later assessments and information about them.
26. The guidance recommends obtaining an independent valuation within the 12-week disregard. That means it anticipates challenges will follow soon after the assessed person receives their financial assessment.
27. The guidance describes the purpose of gaining an independent valuation as enabling councils to work out what charges a person should pay. This enables the person or their representative, to consider whether to seek a deferred payment agreement. Again, this is predicated on the assessed person or their representative challenging the assessment within a short time of its issue.
28. Based on the information presented the Council in its financial assessment included the 12-week disregard allowing time for the assessment to be challenged. Nobody challenged the assessment between 2017 and 2020. Therefore, I find the Council considered all relevant information at the time and so acted without fault in conducting Mrs Y’s financial assessment.
29. In response to the late challenge to the assessment the Council considered Mrs Y’s estate value and the known sale price achieved for the sale of the land. It far exceeded the Council’s offer of £15,000. The Council took the price achieved as the likely open market value. Therefore, it did not seek a further independent valuation. I find it acted without fault. The earlier offer arose as part of the opening of negotiations to see if the owners of the derelict plots would sell their land to the Council for it to develop as social housing. This would be different from an open market valuation. An independent surveyor asked to value the property under the Care Act 2014 financial assessment guidance would be expected to consider the open market valuation. The Council would be expected to use that valuation in reviewing the financial assessment. Under the review procedure set out in the guidance the offer to buy at £15,000 would not be the value used. Therefore, I find the Council acted without fault in refusing Ms X’s application to have the lower valuation used in the financial assessment.
30. Any challenge to how the debt has arisen including the calculations used is best determined by the court which can make a definitive ruling. Therefore, I have not reached a view on whether the estate is liable for Mrs Y’s care costs.

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Final decision

31. In completing my investigation, I find the Council acted without fault.

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Investigator's decision on behalf of the Ombudsman