Summary: On behalf of Care Provider Z, Mrs X complains the Council backdated a financial assessment for one of its service users for 14 months, leading to a significant shortfall in care fees. Mrs X wants the Council to accept liability for these costs and make up the difference. We have discontinued our investigation. This is because we cannot achieve a worthwhile outcome from further investigation, as we cannot achieve the outcome Mrs X is seeking.

The complaint

1. On behalf of Care Provider Z, Mrs X complains the Council backdated a financial assessment for a service user for a period of 14 months. She says this resulted in Care Provider Z incurring a significant and unexpected shortfall in care fees. Mrs X wants the Council to accept liability and pay the difference in care costs.

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The Ombudsman’s role and powers

2. We investigate complaints about ‘maladministration’ and ‘service failure’, which we call ‘fault’. We must also consider whether any fault has had an adverse impact on the person making the complaint, which we call ‘injustice’. We provide a free service, but must use public money carefully. We do not start or continue an investigation if we decide:

• we cannot achieve the outcome someone wants; or
• there is another body better placed to consider this complaint. (Local Government Act 1974, section 24A(6), as amended, section 34(B))

3. We may decide not to start or continue with an investigation if we think the issues could reasonably be, or have been mentioned as part of the legal proceedings regarding a closely related matter. (Local Government Act 1974, sections 24A(6) and 34B(8), as amended, section 34(B))

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How I considered this complaint

4. I considered information Mrs X provided about the complaint.
5. I considered information the Council provided about the complaint.
6. Both Mrs X and the Council were able to comment on a draft version of this decision. I considered any comments I receive before making a final decision.

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Relevant legislation, guidance and policy

Charging for permanent residential care

7. The Care Act 2014 (section 14 and 17) provides a legal framework for charging for care and support. It enables a council to decide whether to charge a person when it is arranging to meet their care and support needs, or a carer’s support needs. The charging rules for residential care are set out in the Care and Support (Charging and Assessment of Resources) Regulations 2014 and councils should have regard to the Care and Support Statutory Guidance.
8. When the Council arranges a care home placement, it must follow the regulations when undertaking a financial assessment to decide how much a person must pay towards the cost of their residential care.

Mental capacity and health

Mental Capacity Act

9. The Mental Capacity Act 2005 is the framework for acting and deciding for people who lack the mental capacity to make particular decisions for themselves. The Act (and the Code of Practice 2007) describes the steps a person should take when dealing with someone who may lack capacity to make decisions for themselves. It describes when to assess a person’s capacity to make a decision, how to do this, and how to make a decision on behalf of somebody who cannot do so.

Mental capacity assessment

10. A person aged 16 or over must be presumed to have capacity to make a decision unless it is established they lack capacity.
11. The council must assess someone’s ability to make a decision when that person’s capacity is in doubt. How it assesses capacity may vary depending on the complexity of the decision.
12. An assessment of someone’s capacity is specific to the decision to be made at a particular time. When assessing somebody’s capacity, the assessor needs to find out the following:
• Does the person have a general understanding of what decision they need to make and why they need to make it?
• Does the person have a general understanding of the likely effects of making, or not making, this decision?
• Is the person able to understand, retain, use, and weigh up the information relevant to this decision?
• Can the person communicate their decision?

Lasting Power of Attorney

13. The Mental Capacity Act 2005 introduced the “Lasting Power of Attorney (LPA)”. This replaced the Enduring Power of Attorney (EPA). An LPA is a legal document, which allows a person (‘the donor’) to choose one or more persons to make decisions for them, when they become unable to do so themselves. The 'attorney' or ‘donee’ is the person chosen to make a decision on the donor’s behalf. Any decision has to be in the donor’s best interests.
14. There are two types of LPA. Relevant to this case, a Property and Finance LPA gives the attorney(s) the power to make decisions about the person's financial and property matters, such as selling a house or managing a bank account. Unless the donor says otherwise, the attorney may make all decisions about the donor’s property and finance even when the donor still has capacity to make those decisions.
15. An attorney or donor must register an LPA with the Office of the Public Guardian before the attorney can make decisions for the donor.

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What I found

What happened

16. Below is a summary of the key events leading to this investigation. It is not an exhaustive chronology of every exchange between parties. Where necessary, I have expanded on some of these events in the analysis section of this decision statement.
17. In September 2020, Care Provider Z accepted a residential client under contract from the Council. I have referred to the client as Client D in this statement.
18. In February 2021, the Council attempted to carry out an assessment of Client D’s finances. The Council says it did not receive the information it sought from Client D, which would have allowed it to complete a full assessment. Accordingly, the Council decided Client D was able to meet the full cost of their care. Mrs X says the Council told Care Provider Z that Client D would be responsible for funding the cost of their care.
19. Mrs X says that on every weekly payment schedule the Council sent to the Care Provider between March 2021 and July 2022, the Council stated Client D was a self-funder.
20. In June 2021, Client D drew up an agreement to create a Property and Finance LPA, naming an LPA.
21. The Council says the LPA provided Client D’s financial information in August 2022. The Council says it assessed this information and determined Client D was eligible for financial support from 21 June 2021 onwards. The Council informed Care Provider Z of its decision.
22. In December 2022, Client D’s LPA contacted the Council. The Council says the LPA provided the Council with an account balance statement for Client D from Care Provider Z, showing outstanding costs. The Council informed Care Provider Z that Client D qualified for financial assistance towards the cost of their care from the 10 June 2021. It said from this date, Care Provider Z should only invoice Client D for their contribution, rather than seek to charge Care Provider Z’s private rate. The Council asked Care Provider Z to amend its records and cancel any private rate invoices it had issued to Client D.
23. Following further exchanges, Mrs X complained to the Council. In her correspondence, Mrs X:
1. Said backdating a financial assessment for 14 months was not acceptable. Care Provider Z would have to bear the financial impact of Client D’s financial re-assessment, which Care Provider Z calculated at over £20,000.
2. Mrs X said the Council’s finance guidance said the Council would make regular payments under a light-touch financial assessments, if the Council believed a client to be contracted through the Council. Mrs X said this had not happened, as the Council had made no payments in the previous 14 months. Mrs X said if the Council had done so, Care Provider Z would have been aware Client D was contracted through the Council.
3. Care Provider Z would seek payment for the full cost of care.
24. In January 2023, the Council replied to Mrs X under its complaints procedure, setting out its position. The Council:
1. Said Care Provider Z had accepted Client D under a Council contract in September 2020.
2. Accepted Care Provider Z had told the Council of concerns about Client D’s capacity to self-fund the placement. However, the Council said as no capacity assessment had been carried out, it had to assume that Client D had capacity when conducting an initial assessment. It had therefore written to Client D directly.
3. Said Client D had not provided the financial information the Council had asked for. The Council concluded that Client D would have to fund their own care, until the Council received any evidence to suggest otherwise. The Council said it had told Care Provider Z to provide Client D with a contract immediately, setting out the rates Care Provider Z would charge Client D. The Council said it was unclear whether Care Provider Z had taken this step. It said if Care Provider Z had not provided Client D with a contract, it would not be lawful to recover funds from this period.
4. Said it understood the frustration caused by the financial assessment being backdated 14 months. However, the Council said it acted promptly once it had received the information needed to carry out the assessment. It said any overall delay was because of the time needed to register an LPA, finalised in November 2021. The Council said it then took some time for the LPA to collate Client D’s financial information and provide this to the Council to assess.
5. Said Care Provider Z could not charge a person more than they could afford to pay, for a period where they were eligible for financial assistance from the local authority. This was because a client could not afford to pay more in addition to the contribution they were already making to the cost of their care.
6. Said Care Provider Z had been aware of issues around Client D’s legal representation when the Council had decided they were a self-funder. It said had it managed to assess Client D at the time, then the Council would have continued to offer financial assistance throughout, meaning Client D would not have paid the private rate at any point. It did not therefore agree Care Provider Z was having to accept a financial loss. It said neither the Council nor the LPA were at fault, given the time taken to register the LPA and then collate the information needed for assessment.
7. Said its financial assessment showed that Client D could not afford to pay any private rates beyond 21 June 2021. The Council said Care Provider Z should not attempt to demand any payment Client D could not afford to make.
25. Mrs X escalated her complaint to the final stage of the Council’s complaints procedure. In March 2023, the Council provided its final response. The Council reiterated its position and said it was not its responsibility to repay a private debt, which was not supported by a material contract.
26. Mrs X brought her complaint to the Ombudsman in March 2023.

Analysis

27. Mrs X has said the overall time taken for the Council to assess Client D’s finances led Care Provider Z to issue invoices for the full cost of care for 14 months. I understand these invoices have not been fully paid, resulting in Care Provider Z losing a significant sum of money it expected to receive if it cannot seek to recover these costs. Mrs X would like the Council to make up the difference in costs she says Care Provider Z will lose.
28. Mrs X, on behalf of Care Provider Z, is asking the Ombudsman to confirm the invoiced, unpaid costs remain valid debts, and to confirm the Council is liable to meet them. Having considered the information available, I do not believe this is something the Ombudsman can achieve, for the following reasons:
1. The Council may have acted with fault by not taking steps to determine Client D’s capacity as soon as Care Provider Z raised concerns about this. I cannot speculate now whether Client D would have been found to have capacity. However, in either scenario, it appears likely the Council would have concluded that Client D was eligible for financial support towards the cost of their care from June 2021 onwards, based on an objective assessment of their finances. I believe I would be unlikely to find the Council’s faults caused the injustice Care Provider Z claims.
2. Unlike the Ombudsman, the court can decide whether a debt is valid and establish liability. I believe this is of key relevance in this case, given the apparent lack of contract, the size of the claimed debt, and the fact liability is disputed.
3. The court’s directions are legally binding, whereas the Ombudsman’s recommendations are not.
29. For these reasons, I believe the Ombudsman cannot provide the outcome Mrs X is seeking and her complaint would be better considered by the courts. I have discontinued my investigation on this basis.

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Final decision

30. I have ended my investigation. This is because I cannot achieve a worthwhile outcome from further investigation, as I am unlikely to be able to achieve the remedy Mrs X wants.

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Investigator's decision on behalf of the Ombudsman