Summary: Mr B complained the Council reclaimed surplus direct payment funds from his son, Mr C’s, direct payment account which left him without respite support. He also complained the Council told the family they could no longer use their respite provider as they did not have a Care Quality Commission (CQC) registration. There was fault by the Council. The Council did not ensure annual reviews were carried out for Mr C’s direct payment account. Because of the fault, Mr B and Mr C suffered distress and uncertainty while the Council investigated matters and carried out a review of Mr C’s direct payment account. The Council has agreed to apologise to Mr B and Mr C, make symbolic payments, and issue staff briefings.

The complaint

1. Mr B complains:
• The Council took a large sum of money from his son’s, who I will refer to as Mr C, direct payment account that had accumulated during the Covid-19 pandemic while he could not use the funds.
• The Council then completed an audit of the account which highlighted Mr C’s funds were lower than they should have been due to invoicing issues. Mr B complains this left Mr C without respite while the Council completed its investigation into this.
• The Council told him the family could no longer use the personal assistant (PA) for Mr C’s respite as they are not registered with the Care Quality Commission (CQC).
2. Mr B says the Council’s actions have affected the family’s mental and physical health and left them without respite for several months.
3. Mr B would like the Council to return the reclaimed direct payments to Mr C as he says it was not his fault he could not use the funds during the Covid-19 pandemic due to his vulnerability.

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The Ombudsman’s role and powers

4. 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 significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
5. We may investigate complaints from the person affected by the complaint issues, or from someone else if they have given their consent. If the person affected cannot give their consent, we may investigate a complaint from a person we decide is a suitable representative. (section 26A or 34C, Local Government Act 1974)
6. 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)
7. 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, sections 24A(1)(A) and 25(7), as amended).
8. 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(1), as amended)

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What I have investigated

9. I have investigated matters in this case from March 2020, when the direct payments started to accumulate during the Covid-19 pandemic, to January 2025, when the Council sent its final response to Mr B’s complaint.
10. I have exercised discretion to consider matters from March 2020, as Mr B only became aware of the issues he complains of, when the Council reclaimed the surplus funds in April 2024.

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How I considered this complaint

11. I read Mr B’s complaint and spoke to him about it on the telephone.
12. I considered evidence provided by Mr B and the Council as well as relevant law, policy and guidance.
13. Mr B and the Council had an opportunity to comment on my draft decision. I considered any comments before making a final decision.

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What I found

Direct payments

14. Direct payments are monetary payments made to individuals who ask for them to meet some or all of their eligible care and support needs. They enable people to arrange their own care and support to meet those needs. The council must ensure people have relevant and timely information about direct payments so they can decide whether to request them. If they do so, the council should support them to use and manage the payment properly.

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What happened

15. This is a summary of events outlining key facts and it does not cover everything that has happened in this case.
16. Mr C receives a direct payment from the Council to meet his care and support needs as set out in his care plan. Mr C uses the direct payment for personal assistant support when he goes out into the community, transport, and respite provision. Mr C’s direct payment account and funds are managed by an organisation, which I will refer to as X, on Mr C’s behalf.
17. In April 2024, the Council reclaimed unspent direct payments from Mr C. Mr B says the funds had accumulated during the Covid-19 pandemic when Mr C could not use the funds. The reclaim happened following an audit X carried out which identified several cases with surplus funds, which it told the Council about. When the surplus direct payments were reclaimed by the Council, it says it came to light Mr C’s funds were running out a quicker rate than they should have been. The Council says this is because Mr C’s PA was invoicing for two to one support for each night of respite, rather than the one to one support agreed in Mr C’s care plan, and at a higher rate. This triggered a review of Mr C’s direct payment account. The Council says the review highlighted concerns with the PA used for respite support, including issues with costings and invoices, and the Care Quality Commission (CQC) registration of the PA.
18. In August 2024, the Council told Mr C and his family it would not allocate any further direct payment than what had already been agreed in his care and support plan, but he would continue to be supported to access alternative respite. The Council says Mr C’s direct payment account balance has always remained sufficient to meet the cost of the care as set out in his care and support plan.
19. Mr B told me Mr C’s respite support is now in place again with their original PA. The respite arrangement has been altered so that the PA no longer requires a CQC registration.

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Analysis

20. Mr B says the Council did not tell the family what Mr C’s direct payment could have been used for during the Covid-19 pandemic, while it could not be used by Mr C for its usual purpose. I asked the Council about this. In response to my enquiries, it sent me a copy of an email it sent to all direct payment recipients in the Council area in March 2020. The email contained direct payment Covid-19 advice which outlined funds could be spent flexibly, and recipients did not need permission to use the funds differently to what was initially agreed by the Council, providing it was legal and met assessed needs. There was also advice available to view on the Council’s website. So, there was no fault by the Council. It provided adequate advice. The Council’s direct payment policy requires repayment of funds which have accumulated where there is no reasonable explanation for the surplus funds. As such, the Council was entitled to reclaim the unspent funds.
21. The Council reclaimed the unspent funds in April 2024, some time after they had started to accumulate. The Council told me the funds in Mr C’s account were maintained at expected levels through 2020 and 2021, and the surplus gradually increased between 2022 and 2024. It said this was not noticed sooner because X had not carried out an audit of Mr C’s account for years 2021 to 2022, and 2022 to 2023. Auditing and monitoring of direct payment accounts is a council function, and we would usually expect councils to ensure audits of direct payment accounts are carried out at least annually. X did not do this. As detailed in paragraph 7, we hold the Council responsible for the actions of X. The Council was at fault due to X’s failure to complete annual audits. This caused distress and uncertainty to Mr B and Mr C while the Council investigated matters and carried out a review of the direct payment account.
22. I have seen copies of Mr C’s care and support plans which detail two to one support is required for accessing the community only, not for respite. The care and support plans also detail the costing of the respite support. But it appears Mr C’s PA was invoicing X for two to one respite support, and at a different rate than agreed by the Council in the care plan. This was a result of a misunderstanding, rather than fault by any party.
23. Mr B’s claimed injustice is that Mr C and his family were left without respite for several months due to the Council reclaiming the surplus funds. Following the review of Mr C’s direct payment account, it became apparent Mr C’s PA did not have the CQC registration required to continue to provide respite support in the PA’s home as they had been doing. This appears to be the reason Mr C and his family did not receive respite support for the period in question. The Council offered alternative respite support for Mr C in July and September 2024 which was within his budget allocation. The family declined because they did not want to use a different PA for respite support. The Council then advised the family about the PA’s CQC registration options so they could continue to use them for respite support. So, I cannot say the missed respite was due to fault by the Council, or that the Council told the family they could not use their existing PA. Rather, they could not use the PA how they had been, at the PA’s home, without the appropriate CQC registration.
24. Sometimes we will recommend a financial payment to the person who brought their complaint to us. This might be to reimburse a person who has suffered a quantifiable financial loss, or it might be more of a symbolic payment which serves as an acknowledgement of the distress or difficulties they have been put through. But our remedies are not intended to be punitive and we do not award compensation in the way a court might. Nor do we calculate a financial remedy based on what the cost of the service would have been to the provider.
25. We have published guidance to explain how we calculate remedies for people who have suffered injustice because of fault by a council. Our primary aim is to put people back in the position they would have been in if the fault by the council had not occurred.

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Action

26. To remedy the outstanding injustice caused to Mr B and Mr C by X’s failure to audit Mr C’s direct payment account, the Council will take the following actions within four weeks of my final decision:
• Apologise to Mr B and Mr C for the distress and uncertainty caused by the identified fault. This apology should be in accordance with our guidance Making an effective apology.
• Pay Mr B £200 for the distress and uncertainty caused by the fault I have identified.
• Pay Mr C £200 for the distress and uncertainty caused by the fault I have identified.
27. Within three months of my final decision, the Council will also:
• Remind relevant staff of the importance of ensuring direct payment accounts are audited at least annually.
• Advise relevant staff to direct service users who are arranging respite services through direct payments, to advice about CQC registration.
28. The Council should provide us with evidence it has complied with the above actions.

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Decision

29. I uphold Mr B’s complaint and find fault causing injustice. The Council has agreed actions to remedy injustice.

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Investigator's decision on behalf of the Ombudsman