Summary: Mrs B complained about the Council’s charges for home care for her mother. We have found fault in the Council’s actions. The Council failed to send a letter when there was an underpayment, failed to carry out regular reconciliations and its communications about the charges was unclear and not transparent. The agency which provided the care also did not provide the information it should have provided.

The complaint

1. Mrs B complains on behalf of her mother Mrs C, who has sadly passed away.
2. She says:
• The Council is chasing her for unpaid invoices for the care that Mrs C received, but she has already provided evidence that the invoices have been paid.
• She suspects Mrs C was overcharged for times when she was in hospital or occasions when care was not provided.
• The Council’s charging and its communications are unclear as the Council cannot say which invoices were not paid or when the underpayment happened.

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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. We investigate complaints about councils and certain other bodies. Where an individual, organisation or private company is providing services on behalf of a council, we can investigate complaints about the actions of these providers. (Local Government Act 1974, section 25(7), as amended)
5. 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

6. I have considered the evidence provided by Mrs B and the Council and the relevant law, guidance and policies.

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What I found

Law, guidance and policies

7. The Care Act 2014, the Care and Support Statutory Guidance 2014 (updated 2017) and the Care and Support (Charging and Assessment of Resources) Regulations 2014 set out the Council’s duties towards adults who require care and support and its powers to charge. The Council has its own policies and procedures.

Personal budget

8. Everyone whose needs the local authority meets must receive a personal budget as part of the care and support plan. The personal budget gives the person information about the money allocated to meet the needs identified in the assessment and recorded in the plan.

Financial assessment and charging

9. Councils must carry out a financial assessment if they decide to charge for care and support. Generally speaking, if a person has capital over £23,250, they will have to fund their own care. However, a person has a legal right, if they are receiving care at home, to ask for the Council to meet their needs.
10. When choosing to charge, a local authority must not charge more than the cost that it incurs in meeting the assessed needs of the person.
11. An overriding objective of charging is that it should be clear and transparent so people know what they will be charged.

Council’s policies

12. The Council offered three ways people could choose to manage their personal budget:
• Direct payment. The most flexible option as it allowed the person to purchase their own care and support.
• Individual Service Fund (ISF) – see below.
• Council managed. The least flexible option as the Council managed the personal budget to provide the support directly.
13. The ISF factsheet said:
• ‘At the end of each month, the care agency will provide you with a monthly statement showing the number of hours of support they have provided and what they charged per hour for that support.’
• There may be occasions when you do not need support on the days you usually would. ‘On these occasions, your care provider has agreed that you can ‘bank’ any unused support hours to use at another time instead… Banked hours in your account will show on your monthly statement provided by the care provider.’

What happened

Background to the complaint

14. Mrs C was an elderly woman who lived at home and received care and support from a care agency (the Agency). She was not entitled to Council funding for her care as she had assets over £23,250, but had exercised her right to ask for the Council to meet her needs. She was a self-funder and paid the full cost of her care.
15. Mrs C’s personal budget was paid via an Individual Service Fund.

Council’s procedure for payments

16. These are the Council’s procedures insofar as they applied to Mrs C:
• The Council paid the Agency directly on a monthly basis.
• The Council invoiced Mrs C every month based on her personal budget and she paid the Council directly.
• If the Council’s finance account system identified a missed or underpayment, the Council’s system produced an automatic reminder letter which would be sent to the service user.
• The Council would set off any payments received from a service user against the latest unpaid invoice. This meant that, if a service user missed a payment, the next payment would be set off against the invoice that had not been paid.
17. The Agency also sent invoices to the Council every two weeks which set out each visit that had been carried out to Mrs C and the amount it had actually charged.
18. The Council then carried out a reconciliation process and the Council has sent me a document which set out the process. The Council compared the total of the Agency’s invoices for one year for a service user with the Council’s invoices. If there was a difference between the Council’s invoices and the Agency’s invoices, the Council would provide a refund if the service user had overpaid or would add it to the debt if they had underpaid. If the service user had an outstanding debt, then the credit would be offset against this debt.
19. The Council’s reconciliation document did not explain how frequently this reconciliation should take place but the Council quoted its Charging Policy which said:
• ‘If the Service User’s contributions in the year exceed the total support supplied, then the service user will be refunded the excess contribution.’
20. I could not find this quote in the Charging Policy but my reading of that quote is that the Council should carry out the reconciliation every year. I also spoke to the Council officer responsible for the reconciliation and he said that the Council would also carry out a reconciliation at the request of the customer.

Chronology of events

21. Mrs C started receiving care (four visits a day) in June 2016. The Council wrote to Mrs C on 13 July 2016 and said the cost of her care package was £275.94 per week (£1,103.76 per month).
22. Mrs C was in hospital from 16 to 26 September 2016 so the Agency did not provide care during that time. The Council carried out its yearly reconciliation in June 2017 and issued a credit relating to the hospital stay on 11 September 2017.
23. The notes are not clear, but at some point in 2018, the Council started to chase Mrs C for a missed payment. Mrs C spoke to a Council officer twice in August 2018 as she disputed the missed payment.
24. The Council wrote to Mrs C on 17 December 2018 and informed her that the invoice covering 23 April to 20 May 2018 (£1,103.76) was outstanding. Mrs C showed that the payment had been made at the Post Office. The Council accepted this but said there may have been a problem with the payment. For example, it could be that the cheque did not go through. The Council asked Mrs C to check whether the amount was taken from her bank account.
25. There was further correspondence in January 2019 between the Council and Mrs C about the arrears. Mrs C’s daughter attended a meeting in March 2019 with receipts for payments made. The Council said Mrs C’s daughter did not have all the receipts for the invoices raised and said she would ‘go back and check the records.’
26. As a separate issue, the Council reviewed Mrs C’s invoices on 3 October 2018. The Council realised that the Agency’s hourly rates had increased in April 2018 and the Agency had been charging £293.58 a week since then, but the Council had not amended its invoices to Mrs C so Mrs C had only been charged £275.94 a week. The Council increased the invoices to the weekly rate of £293.58 from September 2018.
27. The Council wrote a reminder letter to Mrs C for an outstanding debt of £100 on 30 April 2019.
28. Mrs B contacted the Council on 27 July 2020 to inform them that Mrs C was in hospital from 28 May 2020 to 5 June 2020 so she should not be charged for this period. Mrs B contacted the Council again on 20 August 2020 after she received the invoice as she asked whether the Council had reduced the invoice to reflect the time Mrs C was in hospital. The Council said it would look into the issue.
29. Mrs C went to hospital on 11 October 2020 and left on 27 October 2020. She went back to hospital on 31 October 2020 and sadly passed away on 3 November 2020.
30. Mrs B was appointed as the executor of Mrs C’s estate. The Council told her that there was a balance of £9,539 to be paid on Mrs C’s account.
31. Mrs B emailed the Council on 23 November 2020 and said:
• The invoice dated 15 July 2020 which covered the period in May/June 2020 was wrong as it included the time when Mrs C was in hospital. She had raised this already several times with the Council and nothing had been done.
• There had been other times when Mrs C was in hospital and this would affect other invoices.
• She wanted to know what the final amount was that Mrs C’s estate owed the Council.
32. The Council said its Financial Reconciliation Team was looking into this and, in the meantime, the account would be on hold. The Council then carried out a financial reconciliation for the period from 26 June 2017 to 1 November 2020.
33. The Council wrote to Mrs B on 23 December 2020 said it had overcharged Mrs C by £2,678. This reduced the total debt of £9,539 to £6,861.
34. On 11 January 2021, the Council sent a breakdown of the invoices which had not been paid. Most of the debt related to three invoices (July, November and December 2020) which had not been paid yet. However, there were also three invoices totalling £1,303.76 from 2018 which the Council said had not been paid.
35. Mrs B replied on 12 January 2021 and said that all the invoices from 2018 had been paid. She also disputed two of the invoices from 2020 as she said these related to times when Mrs C was in hospital.
36. The Council explained to Mrs B that the credit of £2,678 reflected the times when Mrs C was in hospital and sent the reconciliation statements to Mrs B.
37. Mrs B provided evidence to show that Mrs C paid all the invoices in 2018. The Council confirmed that this matched the payments it had received in 2018.
38. There was then a further correspondence between Mrs B and the Council to try to establish which invoices had not been paid in 2018. Initially, the Council said the unpaid invoice related to December 2017, when a cheque paid into the Post Office was not presented to the bank until June 2018 when there were insufficient funds in the account and the cheque was returned. When Mrs C then made a payment in July 2018, the system used it to pay the December 2017 invoice, which meant that it appeared that there was an underpayment against the June 2018 invoice.
39. However, later the Council said this was not correct. The Council provided a spreadsheet which compared all the invoices with all the payments which showed the outstanding debt. It said it could not say which invoice was unpaid without comparing Mrs C’s payments with the bank statements going back to 2017. Mrs B said she had already sent a lot of bank statements and did not understand why she had to send more bank statements
40. Mrs B then paid £3091.20 towards the debt which left an outstanding debt of £3770.79.

Mrs B’s complaint to the Council

41. Mrs B made a complaint on 13 December 2021 and said:
• The Council could not expect her to provide evidence of payments from 2016 and 2017. The dispute started in June 2018 and did not relate to 2016/17. Mrs C was deceased and it would be difficult for the family to find the relevant paperwork after all this time.
• She had provided evidence that all the invoices in 2018 had been paid and the Council had ignored this evidence.
• The Council’s systems, including the reconciliation statements were difficult to understand.
• There were times when care was cancelled and this was not reflected in the invoices.
42. The Council replied and said:
• It needed to see all the bank statements, including statements from 2017 if it was the family’s position that all the payments had been made.
• If Mrs C had been charged for care that had not been provided, then Mrs B should raise this with the Adult Social Care Team. The Council had raised a credit for all the times that care had not been provided.
• The invoices that Mrs C listed had been part paid but the balance of £3770.79 remained outstanding

Information provided to the Ombudsman

43. Mrs B sent a list of individual dates where care had not been provided but Mrs C had still been charged.
44. The Council responded to this list. The Council said this was ‘for periods when the care was cancelled at late notice’ and the Council had paid the Agency in full for these dates. Nevertheless, it agreed to carry out a reconciliation to include those dates. The Council reduced the debt by £863.10 which reduced the overall debt to £2906.69.
45. The Council sent me its spreadsheet which compared all the invoices since 2016 with all the payments since 2016. It was difficult to make a comparison, but there was no receipt (for the invoice of £1,103.76) in December 2017.
46. Mrs B has provided evidence to the Council and the Ombudsman that the payment of December 2017 was made at the Post Office. It would be difficult to say what happened without the bank statements for that time. It could be, as the Council initially said, that the cheque bounced.
47. The Council sent me all the invoices from the Agency and the reconciliation sheets:
• In 2017/18 (June 2017 to June 2018) the Council undercharged Mrs C by £1,180. This related to the fact that the Agency had increased its hourly rate but the Council did not increase its invoices to Mrs C (see paragraph 26).
• In 2018/19, the Council overcharged Mrs C £290.
• In 2019/20, the Council overcharged Mrs C £922. This related to the time Mrs C spent in hospital in May 2020.
• In 2020, the Council overcharged Mrs C £1,465. This related to the time Mrs C spent in hospital in October and November 2020.
48. I also note that the Council gave Mrs C a credit of £2,678 which was the sum of the three times that she was overcharged for the time she spent in hospital . It did not reduce the credit by the £1,180 that Mrs C was undercharged in 2017/18.
49. However, when the Council calculated the credit for the cancelled visits (paragraph 44), it did take into account the credit of £1,180 for 2017/18 in its reconciliation for that year.

Analysis

50. Mrs B is disputing the outstanding debt as she is concerned that the Council has not taken into account her payments, has not properly calculated the invoices when Mrs C was in hospital and, because the information provided was not transparent, she was not confident in the Council’s actions.
51. I have compared the actions of the Council and the Agency with the actions they should have taken according to the Council’s policies and procedures.
52. The Council’s ISF’s factsheet said the Agency should provide the service user with a monthly breakdown of the care it had provided and what it had charged for the care. This would give the service user the information they needed to ensure that they were charged correctly. This did not happen and this was fault. Mrs C was never given any breakdowns in all the years that she received a service. She was only sent the Council’s invoices which did not provide the details she needed.
53. The Council should have carried out a reconciliation at least every year, and possibly more frequently, to ensure that Mrs C was not under or over-charged.
54. The Council carried out a reconciliation in June 2017, but, as far as I can see, that was the only reconciliation that took place, until her death. That was fault.
55. The Council says that, if a payment is missed or an underpayment is identified, then a reminder letter is automatically sent to the customer. This did not happen and that was fault.
56. I cannot say for certain when the payment from 2017 or 2018 was missed, but it should not have been impossible to establish this as there should have been a corresponding letter. If, as the Council suspected initially, the missed payment was in December 2017, the Council should have sent a letter at that stage. The Council said it did not become aware of any problems with underpayments until August 2018 so clearly something went wrong in its financial monitoring systems.
57. A lot of Mrs B’s confusion related to this problem of the Council being unable to identify exactly when the underpayment happened and the fact that she was not convinced that the Council had amended the invoices to reflect the times when Mrs C was in hospital.
58. The communication between the Council and Mrs B about the debt was lacking in transparency and this was further fault. It was not acceptable for the Council to not carry out any reconciliations since 2017 and then provide Mrs B with the yearly reconciliations since 2016 and expect her to be able to untangle the figures and accept that the debt was correct.
59. Also, I do not know how Mrs B was meant to make sense of the yearly reconciliation if she did not have the monthly statements from the Agency which set out the care provided and the amount charged.
60. If the Agency had sent its monthly statements and the Council had carried out frequent reconciliations and identified any underpayments when they happened, the problem would not have occurred.
61. In terms of the periods when Mrs B was in hospital, I find no fault with the calculation of the credit itself. But, again, I think the invoices and communications were far from transparent. The system was confusing as Mrs B expected the invoices to be reduced, whereas the Council did not do this, but provided a credit instead. Also, as Mrs B did not have the monthly statements from the Agency or the invoices from the Agency, she had no ability to see whether the Council had calculated the credit correctly. The yearly reconciliation sheets did not provide that information.
62. It is difficult to comment on the list of cancelled visits and the amount of notice that was provided. I note the Council has agreed to provide a credit for the invoices for the dates that Mrs B identified and therefore I do not intend to investigate this further.

Injustice and remedy

63. I have considered the injustice Mrs C and Mrs B have suffered as a result of the fault that I have identified.
64. In terms of the failure to carry out the yearly reconciliation, there was a potential injustice as Mrs C made overpayments in 2018 and 2019 and the Council should have refunded these payments. However, I accept that the overpayment would have been offset against the underpayment from 2017 (2018?) so the effect would have been neutral.
65. I also note that the failure to carry out a yearly reconciliation benefitted Mrs C as she was undercharged by £1,180 in 2017. And I note that, when the Council carried out its initial reconciliation from 2016 onwards, it did not invoice Mrs C for the £1,180. I also note the Council has provided an additional credit of £863.10 for the cancelled visits.
66. The main injustice is the confusion caused by the lack of transparency in the communication which was made worse by the fact that the Agency did not send any information about its invoices so Mrs B did not know how the invoices were calculated. This caused Mrs B a lot of stress and meant she had to spend a lot of time trying to find information.

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Agreed action

67. When a council commissions another organisation to provide services on its behalf it remains responsible for those services and for the actions of the organisation providing them. So, although I found fault with the service of the Agency, I have made recommendations to the Council.
68. The Council has agreed to take the following actions within one month of the final decision. It will:
• Apologise to Mrs B in writing.
• Pay Mrs B £200 to reflect the distress caused by the fault.
• Send a final revised invoice to Mrs B for the final amount that is outstanding.
• Remind relevant Council officers of the importance of carrying out the yearly reconciliations and the importance of clear communication.
• Remind the Agency to provide the monthly breakdown to service users.

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Final decision

69. I have completed my investigation and found fault by the Council. The Council has agreed the remedy to address the injustice.

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Investigator's decision on behalf of the Ombudsman