Summary: There was poor communication and lack of transparency in the Council’s financial assessment of Miss C. The Council failed to review Miss C’s direct payments on a yearly basis. The Council has agreed to apologise, pay a financial remedy and review the financial assessment and direct payments.

The complaint

1. Miss B complains on behalf of her adult daughter, Miss C. Miss B manages Miss C’s finances as Miss C is unable to do so.
2. Miss B says the Council started charging Miss C a contribution towards the cost of her care in 2018. She says the Council failed to invite her to the financial assessment, failed to inform her of the charges and then failed to monitor the payments. This led to a large bill accruing without Miss C knowing.

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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. 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

5. I have discussed the complaint with Miss B. I have considered the information that she and the Council have sent, the relevant law, guidance and policies and both sides’ comments on the draft decision.

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What I found

6. 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 also has its own policies.

Financial assessment and charging

7. Councils must carry out a financial assessment if they decide to charge for the care and support. The council must then give the person a written record of the completed assessment.
8. An overriding objective of charging is that it should be clear and transparent so people know what they will be charged.

Disability related expenditure

9. People receiving care and support other than in a care home need to keep a certain level of income to cover their living costs. After charging, a person’s income must not reduce below a weekly amount known as the minimum income guarantee (MIG). This is set by national government and reviewed each year.
10. Councils can take disability-related benefit into account when calculating how much someone should pay towards the cost of their care. When doing so, a council should make an assessment to allow the person to keep enough benefit to pay for necessary disability-related expenditure (DRE) to meet any needs it is not meeting. The Care and Support Statutory Guidance sets out a list of examples of such expenditure.

Direct payments

11. Direct payments enable people to arrange their own care and support to meet their needs.
12. The Care and Support (Direct Payments) Regulations 2014 set out that the local authority must review the making of direct payments initially within 6 months, and thereafter every 12 months.
13. The outcome of the review should be written down, and a copy given to all parties. Where there are issues that require resolving, the resolution method should be agreed with all parties involved, as far as is reasonably practicable.

Council’s policy on DRE

14. The Council applies a flat rate of £11 DRE to service users who receive certain disability related benefits.
15. If a service user has DRE above this amount, then they will have to provide proof of expenditure for the Council to consider the DRE. The policy sets out how the Council considers particular DRE:
• Fuel costs. The Council compares actual expenditure with the National Association of Finance Assessment Officers’ rates (which show average expenditure broken down by area and type of property).
• Dietary needs. The Council compares the average expenditure on food a week with a person’s actual expenditure and allows extra costs over the average expenditure with a cap of £23.30 per week. The Council sent me the policy dated November 2019 which said average food expenditure a week was £33.68.
• Transport costs. The Council says transport costs should be paid from the DLA/PIP (mobility component) so the Council will only allow costs that exceed the DLA/PIP rate.

UK General Data Protection Regulation (GDPR)

16. The UK GDPR came into force in May 2018 and introduced a new data protection regime to organisations which held data of individuals such as local authorities.

What happened

17. Miss C has additional needs including a learning disability and receives a care package funded by the Council. Miss C receives direct payments which are used to pay for personal assistants who provide care to Miss C.
18. Miss C is unable to manage her financial affairs. Miss B is Miss C’s appointee for benefits. The Council always sent any correspondence relating to Miss C’s finances to Miss B at Miss B’s address.
19. The Council assessed Miss C’s finances in previous years (before 2018) and said her contribution to the cost of the care package was nil, although there was a brief period of six weeks in 2014 when Miss C was assessed as having to pay a contribution.

Chronology of events

• December 2017. The Council changed its adult social care charging policy and removed some discretionary disregards. This meant that more people would have to pay a contribution towards the costs of their care package.
• May 2018. Miss C’s income increased as she started to receive the Personal Independence Payment instead of Disability Living Allowance (DLA). The Council re-assessed Miss C’s finances and concluded that she would have to pay a weekly contribution of £25.52.
• July 2018. The Council wrote to Miss C at her address. The letter included a copy of the financial assessment. The Council included the standard DRE of £11 and said Miss C’s weekly contribution was £25.52. It invited Miss C to write to the Council if any of the information was incorrect.
• March 2019. The Council re-assessed Miss C’s finances and wrote to Miss C. It included the financial assessment and said the contribution had increased to £28.75 per week.
• November 2019. Miss D was appointed to manage Miss C’s direct payments and to employ personal assistants.
• December 2019. Miss C moved to a new address. The net rent figure (rent minus housing benefit) increased from £16.81 to £57.19. The Council was not informed of the move so its calculation of the contribution was based on the lower rent at Miss C’s previous address.
• January 2020. The Council carried out an audit of Miss C’s payments and realised she had not paid her contribution since July 2018. The Council wrote to Miss D and informed her of this. The outstanding debt was £1,710.80. Miss D then informed Miss B of the outstanding debt.
• January 2020. Miss B contacted the Council. She said she had not been aware that Miss C had to pay a contribution or had an outstanding debt until Miss D informed her. She disputed whether any payment should be made.
• March 2020. The Council wrote to Miss C and said her contribution had increased to £32.32. It included the financial assessment which was still based on the old rent figure.
• In May 2020 Miss C filled in a financial assessment form and provided evidence of Miss C’s new rent figure and of DRE. The Council carried out a revised financial assessment based on the new information.
• June 2020. The Council wrote to Miss C to inform her of the outcome of the new financial assessment. It said her contribution from December 2019 to April 2020 was nil and from April 2020 was £1.66 per week. It backdated the invoices.
• September 2020. The Council wrote to Miss B at her address and said the outstanding debt was £2,113.30.

Complaint – October 2020

20. I have summarised the complaints that the Ombudsman is investigating. Miss B said:
• She found out in January 2020 that Miss C had a debt of over £2,000 for unpaid contribution.
• The Council had never informed Miss B of this debt although it knew that Miss B managed Miss C’s finances as Miss C was unable to do so. Previously the Council had always written to her about any financial matters.
• The Council had not informed Miss B it was carrying out a financial assessment of Miss C or gave her an opportunity to provide evidence for the assessment.
• The Council had not informed Miss B that Miss C had to pay a contribution towards the cost of her care from July 2018.
• The Council failed to chase Miss B for the unpaid contribution for two years or inform her about the problem. It then chased her for a large amount all at once. She questioned why the account had not been audited before.
• She had been trying to get the matter resolved since January 2020, but the Council had continued to send invoices for different amounts and financial assessments showing different calculations. It was not clear how the Council has calculated the contribution.

Response to complaint – November 2020

21. The Council responded to Miss B’s complaint but sent the response to Miss C at her address. The Council said:
• It had no authorisation to allow Miss B access to Miss C’s finances therefore it was writing to Miss C directly.
• It set out the chronology of events (see above) and said that it had based its financial assessments on the information it had available at the time. It re-assessed Miss C’s finances in June 2020.
• It explained why it had not audited Miss C’s account before. It said that, as Miss C’s direct payments were paid into a specific holding account (not her personal account) and because her contribution was nil, she was assessed as low risk for audit purposes.

Miss B’s stage 2 complaint – November 2020

22. Miss B was not satisfied with the Council’s response and said:
• The Council had always accepted that she was Miss C’s appointee and representative for her finances. It had always discussed Miss C’s finances with her and shared information. So she did not understand why the Council was now questioning this and why she had not been informed of this change of practice earlier.
• She had been sent conflicting information for months and still did not know what Miss C had to pay.

January 2021 – letter to Miss C

23. The Council wrote to Miss C in January 2021 and said it had reviewed her financial assessment.
24. The Council allowed these costs as DRE:
• Gardening - £9.38
• Broadband - £8.08
• Mobile phone - £2.77
25. The Council did not allow these costs as DRE:
• Gas/electricity. Miss C’s costs were not higher than the national average.
• Water/telephone. These costs were covered by the income (minimum income guarantee).
• Petrol. Miss C should pay these costs from the PIP (mobility component).
• Food. Miss C spent on average £35/40 per week on food although some of the receipts were not clear.
26. The revised financial assessment meant that the weekly contribution was from:
• 2 July 2018: £16.29 per week.
• 8 April 2019: £19.52 per week.
• 30 December 2019: nil per week.
• 6 April 2020: nil per week.
27. Therefore, the outstanding debt had been reduced to £1,393.36.

The Council’s response to the stage 2 complaint – January 2021

28. On 27 January 2021 the Council said:
• It could not find any evidence of signed authorisation that Miss B was Miss C’s appointee or that the Council could discuss/disclose financial information to her.
• It acknowledged that Miss B was Miss C’s appointee but said it had changed its working practices following the introduction of the GDPR and now required signed authorisation to disclose information. It had sent the authorisation form on 13 January 2021.
• It said the outstanding debt was £1,393.36. If Miss C was unable to pay this in full, Miss B should contact the Debtors team to set up a repayment plan.
29. Miss B appealed the decision, but the Council did not uphold her appeal.

Further information from Miss B

30. Miss B sent me the letters the Council sent to her updating her on Miss C’s financial affairs before 2018. The letters said:
• ‘Your details have previously been provided as dealing with [Miss C’] financial affairs.’ The letters also said: ‘The attached letter has not been sent directly to [Miss C]. If you are not longer dealing with [Miss C’s] financial affairs, please contact the Financial Assessment Team as soon as possible and a copy of the attached letter will be sent to the appropriate person.’
31. Miss B provided evidence to the Ombudsman of what she called the ‘confusing and conflicting information’ that the Council sent her.
32. These included:
• An invoice dated 2 January 2020 - £1,710.80
• An invoice dated 2 September 2020 - £2,113.30
• An invoice dated 4 December 2021 - £1,393.36
33. Miss B also said the Council had still not properly considered Miss C’s DRE. The Council told her that costs relating to travel such as petrol and car maintenance should be paid from the PIP (mobility) allowance. However, Miss B said Miss C had a motability car since 2018 and her entire PIP (mobility) allowance was paid towards the cost of this. Therefore Miss C was paying the petrol and car maintenance from her income.
34. Miss B said she was unable to provide receipts from 2018 for the DRE as she did not know at the time that she had to keep receipts. For example, the Council had not allowed Miss C’s food expenses.
35. She said the Council had not properly included Miss C’s rent. She was sent two different financial assessments dated 12 March 2020. One assessment said the rent cost was £16.81 per week and the contribution as £32.32 and the other assessment said the rent cost was £46.92 and the contribution was £1.66.

Further information from the Council

36. The Council provided the following further responses.
37. In response to the food DRE, the Council said that it had considered the evidence provided by Miss B and this showed that, over a 9-week period, Miss C’s weekly food shop cost £34. The Council compared that to the DRE matrix and said an average bill was £34.50 per week. Therefore, it did not allow additional DRE for food.
38. In terms of the transport costs, the Council said it had not been informed that Miss C had a motability car. If Miss C used a motability car, then Miss B should provide the evidence and the Council would review the financial assessment. This would only affect the financial assessment before December 2019 as Miss C’s contributions after December 2019 had been assessed as nil.

Analysis

Communication

39. The CASS Guidance says the principle of transparency should underpin the entire charging regime. The Council knew that Miss B managed Miss C’s financial affairs because Miss C was unable to do so. It knew it had to communicate with Miss B about Miss C’s finances. This was clearly recorded on Miss C’s file.
40. I accept the Council may have changed its communication practices after the GDPR and needed a signed consent form to continue to send letters to Miss B. But the Council should have informed Miss B of this change in 2018 or should have sent her a consent form so that it could continue to communicate with her. Instead the Council just sent the contribution letter and the financial assessment forms to Miss C, knowing that she was unable to manage her finances. This was fault.
41. This was even more important because the Council had made changes to its charging policy in 2017/2018 which meant that more people would be charged. So it was crucial that people were able to contribute to the financial assessment in 2018 as there had been a change in policy.
42. It was slightly disingenuous of the Council to say, in its complaint response letter of 27 January 2021 that it could not send Miss C financial information about Miss B because it did not have a signed consent form when the Council knew it had not sent the consent form until 13 January 2021.
43. The Council failed to carry out a yearly review of the direct payments and this was fault. Therefore, the fact that Miss C was not paying her contribution towards the direct payments went unnoticed and a large bill accrued. I note the Council says it does not audit ‘low risk’ accounts, but the Council still had a duty to review the direct payments each year. And, in any event, Miss C’s account stopped being a ‘low risk’ account in July 2018 as she became liable for the contribution. So the Council should, even by its own policy, have carried out the review sooner.
44. Miss C has suffered an injustice as a result of the fault. The main injustice is that, as Miss B was not offered the opportunity to engage in the financial assessment in 2018 and to provide evidence, this meant that the assessment was incorrect and the calculation of the contribution too high. And it was more difficult to provide evidence of expenditure after the event.
45. However, I do note that the Council has remedied this injustice to some extent.
46. The Council’s charging policy says it will not normally consider DRE without evidence of the actual expenditure. I note the Council made an exception for Miss C and agreed to exercise discretion when it re-assessed her finances in June 2020.
47. The Council agreed to allow DRE without evidence of actual expenditure. It agreed to pay for gardening (£9.38), broadband (£8.08) and mobile phone (£2.77). It agreed to backdate these DRE to July 2018 which resulted in a substantial reduction of the contribution.
48. The other injustice was that Miss C was faced with a large bill in one instalment, but that could be remedied by the Council’s offer to consider repayment in instalments.
49. Miss B also suffered injustice as she had to deal with the stress and confusion over the months after she found out that Miss C had to pay a contribution and had accrued a large debt.
50. I have also looked at the ‘confusing and conflicting’ invoices Miss C received. This was partly because the Council carried out a re-assessment of Miss C’s finances in June 2020 and this then led to a reduction in the contribution and in the overall outstanding debt.
51. This is why Miss C received two invoices dated March 2020, with different net rent figures and therefore different contributions. However, this did not explain all the conflicting figures. For example, the Council still sent an invoice on 2 September 2020 for the outstanding debt of £2,113.20 despite the fact it had carried out the revised financial assessment in June 2020 so the figure should have been reduced.
52. Also, the Council did not send a full breakdown of the revised figures and outstanding debt until January 2021, after Miss B’s stage 2 complaint. This information should have been sent sooner.

Disability related expenditure

53. In terms of the DRE, I find no fault in the way the Council considered the DRE for heating. The Council compared Miss C’s expenditure with the average expenditure rates compiled by National Association of Finance Assessment Officers. As Miss C’s expenditure was not higher than the average expenditure, the Council did not include it as DRE. That is common practice in local authorities.
54. I note that, in relation to the food DRE, the Council allowed the cost figure of £34.00 and said that, as this was lower than the average expenditure of £35.40, it had not included the cost as a DRE. I presume the £35.40 figure is the figure in its current policy. However, the Council also sent me its policy from 2019 which said the average food expenditure was £33.68. The Council should have used the average expenditure figure that was in the policy at the time when it made the comparison and its failure to do so was fault.
55. In terms of the transport costs, Miss B had not informed the Council of the costs of the motability car at the assessment in June 2020. So there was no fault in the Council not including the costs at the time. The Council has agreed to review the financial assessment if Miss C provides evidence of these costs and that should resolve the issue.
56. In terms of the rent, there is no evidence of fault. The Council included Miss C’s higher rent costs once it was informed of these costs. It has backdated the cost to December 2019 which resulted in the nil contribution from that date.

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Agreed action

57. The Council has agreed to take the following actions within one month of the final decision. It will:
• Apologise to Miss B in writing and pay her £300 for the distress caused by the fault.
• Carry out a revised financial assessment of Miss C and consider any additional evidence that Miss B may provide, particularly in terms of transport costs. If the Council is comparing Miss C’s costs with average costs, then it should use the average cost figures which were relevant at the time. If this re-assessment results in a reduction of the contribution, then this should be backdated.
• Carry out a review of Miss C’s direct payments.
• Remind relevant officers of the requirement to carry out a yearly review of direct payments and ensure that a yearly review is carried out.

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Final decision

58. 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