Summary: There was fault in the way the Council calculated Mr C’s capital which meant that he was charged too much for his stay at a care home. This also caused a lot of stress to Mr C’s family who were being pursued for the debt. The Council has agreed to apologise, pay a financial remedy and carry out a new financial assessment which will remedy the injustice.

The complaint

1. Ms B complains on behalf of her father-in-law, Mr C who lacks the mental capacity to make the complaint. She complains about the Council’s calculation of his capital and its communications with her about the issue. She says the Council’s failures have led to the Council charging Mr C too much for his contribution to the cost of the care home fees.

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The Ombudsman’s role and powers

2. 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)
3. 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

4. I have discussed the complaint with Ms B. I have considered the information that she and the Council have sent and both sides’ comments on the draft decision.

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What I found

Law, guidance and policies

5. The Care Act 2014, the Care and Support Statutory Guidance 2014 and the Care and Support (Charging and Assessment of Resources) Regulations 2014 set out the Council’s duties and powers to charge.

Threshold

6. If a person needs residential care, the Council will assess their capital and income. The upper capital limit is £23,250 and the lower limit is £14,250. A person with assets above the upper capital limit will have to pay for their own care and the Council is precluded from paying for their care. Those with capital between the upper and the lower limit will make a contribution known as ‘tariff income’ from their capital.
7. If the capital is below the limit, residents may have to pay a contribution from their income towards the fees.

What happened

8. Mr C is an elderly man who was taken to hospital in October 2020 after a fall. The Council’s social worker assessed Mr C and recommended that he required a 24 hour residential placement to meet his needs. Mr C moved into a care home on 12 November 2020. The Council sent the finance information pack to Mr C’s family on 6 November 2020.
9. The family returned Mr C’s financial assessment form to the Council on 25 February 2021. This showed that Mr C’s bank account balance was £34,601 on 31 January 2021. The Council carried out the financial assessment on 21 April 2021 and concluded that Mr C had savings above the threshold of £23,250 and he would therefore have to self-fund the costs of his care.
10. On 12 May 2021, the Council sent an invoice to Mr C for £15,183 for the charges from November 2020 until 30 April 2021 at the full weekly rate which was £621 and rose to £643.

Ms B’s email – 18 May 2021

11. Ms B sent an email to the Council on 18 May 2021 and said she questioned the invoice. She said Mr C had £36,829 in his bank account so, if he paid the invoice, this would take his balance to £21,646 which was below the threshold. She asked the Council what she should do.
12. The Council sent a further invoice on 8 June 2021 for £2,848 for the charges at the full rate for the month of May 2021.
13. Ms B sent a further email on 11 June 2021 saying she had not received a response to her email from May yet and had received a further invoice.

Council’s response – 2 July 2021

14. The Council responded to Ms B’s email from May 2021 on 2 July 2021. The Council officer said the Council would carry out a full financial review once the invoice had been paid. She said Ms B should pay the invoice and then send bank statements for the last three months. This would enable the Council to pinpoint the date when the bank balance fell below the threshold. She said the ‘financial re-assessment will be backdated accordingly…’
15. The Council sent reminder and final notices for the invoices that had not been paid. The Council also continued to send new invoices for June, July and August at the full self-funding rate.
16. Ms B paid the invoice on 9 August 2021. It is my understanding she paid an amount which decreased Mr C’s account balance to the threshold. Ms B sent a copy of Mr C’s account balance to the Council.
17. The Council recalculated the debt and sent Ms B a revised invoice on 6 October 2021. It said Mr C reached the £23,250 threshold on 10 August 2021 so the Council reduced his weekly charge after that date and recalculated the invoices from 10 August 2021 onwards.

Ms B’s email – November 2021

18. Ms B emailed the Council on 8 November 2021 and said:
• She accepted there had been a delay in paying the invoice but said she had been waiting for the outcome of the Continuing Healthcare Assessment (to receive NHS funded care).
• She had emailed the Council in May 2021 about the problem with the invoice and had not received a response until July 2021.
• She had assumed that the financial reassessment would be backdated to include all the outstanding invoices from May onwards. If the Council insisted that Mr C pay the outstanding invoices which were £11,393, this would reduce his bank balance to £14,250.
• She asked the Council to re-assess Mr C’s finances based on the information she had given.
19. The Council replied and said:
• Although the Council did not respond to Ms B’s email from May 2021 until July 2021, the charges on the May 2021 invoice were correct. Ms B was not disputing the amount on the invoice.
• The Council received payment of the invoice on 10 August 2021 so ‘until this date the funds in [Mr C’s] account remained above the upper threshold of £23,250.’
• The Council apologised that this was not the outcome Ms B would have liked but said it had to comply with the Care Act 2014.

Ms B’s complaint - November 2021

20. Ms B made a formal complaint to the Council. I have summarised Ms B’s complaint and the Council’s responses. Ms B said:
• The Council’s response lacked empathy and respect. The Council worked on the assumption that people knew how the system worked. Instead the family was going a difficult and stressful time during Mr C’s move and was then trying to understand the financial system without an explanation.
• The family received an invoice for £15,183 to be paid within seven days. When they asked for clarification on this invoice, they received no response for two months, but instead received threatening letters to pay the debt. The Council’s delay caused the problem and they were being financially penalised for the Council’s incompetence.
21. The Council said:
• It apologised for the delay in its response to Ms B’s email from 18 May 2021.
• In response to the complaint regarding a lack of empathy and respect, the Council said the email was factually correct but ‘could have been written in a more understanding manner’ and this would be addressed.
• Mr C’s capital remained above the threshold of £23,250 until payment of the invoice of £15,183 was made on 9 August 2021.
• ‘If you believe that [Mr C] went below the threshold before this date, please provide bank statements to allow a further reassessment to take place.’
• The financial assessment had been carried out in accordance with the relevant law, guidance and regulations. The Council was not allowed to pay towards the cost of residential care if a person’s capital exceeded £23,250.

The Council’s reply to the Ombudsman

22. Ms B took her complaint to the Ombudsman and the Ombudsman asked the Council to comment. The Council said:
• It apologised for any additional stress this situation had caused and recognised that anyone with family members in receipt of care was already in a distressing and stressful situation.
• The Financial Assessment and Client Finance team had recently been transferred under new management and the Council was reviewing its processes to improve services.
• The Council was reviewing the team’s communications.
• It was carrying out a review on how it applied the capital limits. The Care Act and charging policy were not explicit on whether this should be applied on an accruals basis. Therefore, the Council had adopted a cash basis approach which following a review, ‘we deem could be incorrect’ and it welcomed the Ombudsman’s interpretation of this.
23. The Council proposed a remedy for the error which I will go through in more detail below.

Analysis

24. I agree with the Council that there was fault.
25. The initial problem was partly caused by the fact that there was a long delay between Mr C moving into the care home (November 2020) and the Council sending the invoice (May 2021). I cannot say that this delay was entirely the Council’s fault. I note the Council sent the financial assessment documents to the family in November 2020 but they were not returned until February 2021. However, the later delay was caused by the Council.
26. The Council said, in its reply to Ms B of November 2021, that the charges in the May 2021 invoice were correct and that Ms B was not questioning the charges. But that was not entirely true. Ms B was questioning the charges. She understood that the charges should not take Mr C’s capital below the threshold so there was a problem with the invoice. She did not say so explicitly but what she was implying was that the charges should be reduced to the lower contribution rate (based on Mr C’s income) from the point that Mr C’s capital hit the threshold. The Council should have acted upon the May 2021 email and should have reviewed the invoice at that stage.
27. The Council’s delay in responding to Ms B’s May 2021 email was partly the reason why the family was holding off paying the invoices. The later invoices were also wrong as the Council had been informed on 18 May 2021 of the fact that the previous invoice would reduce Mr C’s capital to a level that was too low.
28. There was also fault in the Council’s response to Ms B’s complaint from November onwards. The Council did not really answer Ms B’s complaint which was that the Council could not expect Mr C to pay invoices that were reducing his capital to below the threshold and that Mr C reached this point at some time before the May invoice.
29. The Council failed to address this issue either way in its complaint response. It said the actual capital did not reach £23,250 until 10 August 2021 which was true, but that was not the point Ms B was arguing. The Council suggested that Ms B should find a bank statement that showed that Mr C’s capital had reached the threshold of £23,250 before 10 August 2021. This was slightly disingenuous as the Council knew that Ms B would be unable to provide this. Ms B was not saying Mr C’s actual capital had reached the threshold before 10 August 2021. However, she was arguing that the Council’s calculation of capital was incorrect.
30. The Council’s correspondence suggested that the only way to calculate the capital was to look at the actual figure in the bank account and that it could not consider any other factors. It implied that to do so, would not be in line with the Care Act which was not true. There is detailed guidance on how capital should be calculated and what should and should not be included. Although this particular scenario was not included in the guidance, that did not mean the Council did not have a duty to consider Ms B’s arguments or that it was, in some way, prevented from doing so.

Injustice and remedy

31. The Ombudsman’s remedy aims to address any injustice caused by the fault. The key principle is that the remedy should, as far as possible, put the complainant back in the position they would have been in if the fault had not happened.
32. The faults were the initial delay (partly caused by the Council) in sending out the invoice and the delay in responding to Ms B’s email of May 2021. This led to the capital not being reduced as it would have been and there was then further fault as the Council continued to send out invoices that did not reflect what the capital would have been if the fault had not occurred.
33. There was fault in the Council’s communications with Ms B which meant she and the family had to cope with the stress of the complaint while receiving reminders and final notices for the debts.

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Agreed action

34. The Council has admitted that it was at fault in its response to the Ombudsman which is positive. The Council has agreed to take the following actions within two months of the final decision:
• A letter of apology to be sent to Ms B. If Ms B would like to speak to the Service Manager over the phone or meet with them in person, this can be arranged.
• Ms B to provide bank statements going back to November 2020 (when the care package commenced) so a review can be conducted and an accruals basis applied to the capital limit balance.
• Following the review, any balance owed to the complainant will be applied to their account and a revised balance of what they owe to the Council will be supplied.
• It will pay Ms B £150.
35. The Council has also said the following:
• A review of the whole process is already underway with the view to amending the council charging policy to remove ambiguity and make it explicitly clear on how this process should operate. A practical solution to such situations (i.e. calculation working paper) is going to be developed to allow financial assessors to provide an efficient and consistent approach to service users.
• Training and updated guidance will be amended as required following the outcome of this complaint.
36. I agree that these actions, in addition to the improvements the Council has already made as outlined in paragraph 22, should ensure a similar problem does not occur again.

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Final decision

37. 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