Summary: Mrs Y complains the Council has not paid the correct direct payments in respect of her disabled son, Mr X. The direct payments stopped due to an administrative error in August 2016. Mrs Y has not managed the direct payment account properly and the Council has not properly audited the account. In order to ascertain whether any money is owed by the Council it should now properly audit the direct payments from when they were first paid.

The complaint

1. Mrs Y, on behalf of her son Mr X, complains she had to use her own money to meet his assessed care needs between August 2016 and August 2017 because the Council wrongly stopped the direct payments. Mrs Y says the Council did not promptly raise concerns about how the money was being spent even though she sent in quarterly returns.
2. Mrs Y says she has been left several thousand pounds out of pocket because of the Council’s actions.

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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 a council’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. As part of the investigation, I have:
• considered the complaint and the documents provided by the complainant’s representative;
• made enquiries of the Council and considered the comments and documents the Council provided;
• discussed the issues with the complainant’s representative;
• sent my draft decision to both the Council and the complainant’s representative and taken account of their comments in reaching my final decision.

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What I found

6. Mr X is a disabled man aged 24. His condition results in physical and mental disabilities. Mr X was at a residential college for several years. In August 2017, he moved to live in full time residential care.
7. Mr X used to attend a residential college and would return home during the holidays and weekends. Mr X’s care needs were met while at college. However, the Council completed a care assessment to identify Mr X’s eligible needs when at home during the holidays and weekends. The Council provided direct payments for 36 hours a week during holidays; eight hours when he was at home for weekends and 28 nights of respite.
8. The Council’s assessment says the payments were to provide one to one support with travel training; for Mr X to enjoy activities with his peers; to learn social skills and develop peer group friendships; to develop daily living skills; to help with communication and to provide rest and relaxation for Mr X at home and in the community.
9. Mr X’s mother, Mrs Y, handled the direct payments on his behalf. Mrs Y signed a contract which detailed the terms under which the Council would make direct payments. The contract allows the Council to end the agreement if Mrs Y does not spend the money in line with the assessed needs in the care plan.
10. Mrs Y made a previous complaint to the Ombudsman on behalf of Mr X. She complained the Council cancelled the direct payments in August 2016 without reason. The Ombudsman’s investigation of that complaint found fault. We found the direct payments had been cancelled as a result of administrative error as the Council had put a 12 month time limit on the payments and did not notice when the payments stopped. There is no evidence to show the direct payments stopped for any reason other than administrative error. If the Council had stopped the payments for any other reason it would have needed to provide commissioned services to meet Mr X’s assessed needs. There is no evidence to show the Council took any action to replace the direct payments with commissioned services.
11. Our previous investigation did not recommend any financial payment to Mr X or Mrs Y. The Council was in dispute with Mrs Y about the management of the direct payments. It felt Mrs Y had not spent the money correctly and was considering taking action against Mrs Y to recover it. Our previous investigation concluded the Council should resolve the direct payments issues and if Mrs Y was dissatisfied with the outcome then she could make a further complaint. This is Mrs Y’s further complaint.
12. The Council has decided not to take any further action against Mrs Y to recover money. At one point it asked Mrs Y to enter into mediation but said she would need to pay £500 to do this. At that time, the Council had not provided any clear information to Mrs Y about how much it considered had been misspent and how much it was attempting to recover. Mrs Y was willing to enter into mediation but did not consider it reasonable to expect her to pay for this. I agree with Mrs Y that she should not be expected to pay to for mediation.
13. Mrs Y made a formal complaint to the Council seeking reimbursement of the direct payments for the missing period. She says that once the Council decided not to take further action against her, it was accepting she had not misspent the direct payments. She says that as the payments stopped because of an administrative error the Council should make a lump sum payment for the missing months.
14. The Council declined to make any further payments to Mrs Y. It says that while it accepts there is a period of 12 months where no payments were made, there was a considerable balance in the direct payment account that was available for Mrs Y to use and so it does not actually owe her any money.
15. Mrs Y has provided me with copies of the bank statements for the direct payments account. These show a credit balance of £4,765.26 at the end of August 2016. No further payments were made into the account by the Council after this date.
16. Mrs Y was required to send in a quarterly return showing how the direct payments had been used. She was required to show the amount spent and to provide evidence to support this such as an invoice or receipt. The Council says it had to prompt Mrs Y more than once to return the monitoring forms.
17. In November 2016, Mrs Y provided a monitoring return for the period 1 July to 30 September. This return showed the following:
• A balance of £5287.33 at the start of the period;
• Income to the direct payments account of £919.52;
• Expenditure of £4,685.37 during the period; and
• A closing balance on the account of £1521.48.
18. The monitoring return form states the closing balance should equal the amount shown on the bank statement. In this case the figure on the monitoring return form was not the same as the balance on the bank statement. The monitoring return form included expenditure of £2,846.79 paid for by Mrs Y and not reclaimed from the direct payment account.
19. Mrs Y says that after September 2016 the Council did not send her any quarterly monitoring forms. She completed a monitoring form for the period 1 October 2016 to 16 August 2017, the point at which Mr X moved into full time residential care.
20. The monitoring return showed the following information:
• A balance of £1521.48 at the start of the period;
• Income to the direct payments account of £0
• Expenditure of £3773.89;
• A negative closing balance of £2252.41 which Mrs Y says was owed to her.
21. The monitoring form figures and those on the bank account did not match. This return included expenditure paid for by Mrs Y outside of the direct payment account. The Council says it never received this monitoring return until I forwarded it a copy as part of this investigation. However, it now accepts Mrs Y did previously send the monitoring form.

Analysis

22. The Ombudsman was not in a position to make a recommendation when dealing with Mrs Y’s previous complaint. There was a dispute between Mrs Y and the Council regarding the use of direct payments for her son, Mr X.
23. Mrs Y took on the responsibility to manage the direct payments for Mr X. She signed a direct payment agreement which set out the duties of the Council and her responsibilities in managing the money. The agreement includes the following conditions:
• The direct payment account is to be used for direct payment monies and the client contribution. You must not make other payments into or out of the account without agreement from the Council;
• If you do not use all your direct payments on the services you need, you agree to repay the balance to the Council, unless an annual surplus is agreed in your support plan;
• You agree to keep all the records/documents in connection with the services you receive for six years for inspection by the Council;
• The Council will ensure the requirements set out in the support plan are reviewed at least once a year;
• The Council will monitor and discuss with you the quality of the services provided and the extent to which the arrangements you have made using the direct payments.
24. On the basis of the information I have seen I am not satisfied the direct payment account was properly managed by Mrs Y or properly monitored by the Council.
25. Mrs Y did not always pay for Mr X’s care from the direct payment account. She should have only used this account to make payments for Mr X’s care. While I can appreciate sometimes it may have been easier or more convenient for Mrs Y to use her own money, this is not in accordance with the agreement she signed.
26. Mrs Y has used her own money rather than the direct payment account on a regular basis. She allowed the amounts to accrue rather than reimbursing herself for each item. It appears Mrs Y was doing this for many years and there is nothing to suggest the Council picked up on this as part of its quarterly monitoring. As the Council did not provide any advice to Mrs Y about this she had no reason to change how she managed the account.
27. While I am aware the Council did query some of the direct payment spending, I can see nothing to show it ever queried why the balances on the bank statements did not match the figures included on the monitoring forms. There is also no evidence to suggest the Council ever queried the balance in the direct payment bank account or sought to recover the unspent balance. This is fault. I have therefore considered what injustice this caused to Mrs Y.
28. Mrs Y says she was owed £2831.79 in September 2016 but did not reclaim this money from the direct payment account at that time. Mrs Y says therefore the available balance at 30 September 2016 was £1521.48. The Council says the direct payment account shows a balance of £4,430.77 on 30 September.
29. Mrs Y says she spent £3773.89 to meet Mr X’s assessed needs for the period October 2016 to August 2017. Mrs Y says she is owed £2244.42 for this period. Mrs Y says she had to use her own money because the Council did not make any payments in this period due to administrative fault.
30. The Council says it does not owe Mrs Y anything for the period October 2016 to August 2017. It says there was a balance of £4,430.77 in the direct payment account at the start of the period and Mrs Y has provided evidence of only £3773.89 of spending. It says there was more than enough money to cover the costs to meet Mr X’s needs. It has not asked Mrs X to repay any money even though the figures the Council uses suggests a balance of £656.88.
31. I have previously stated it was fault for the Council to stop the payments and that it should reimburse Mrs Y. My view has not changed. However, I am unable to say what amount, if any, should be paid. The failure of Mrs Y to use the direct payments in accordance with the agreement she signed and the failure of the Council to properly audit the account and notify Mrs Y of any issues, means I do not know how much money was available to meet Mr X’s needs in October 2016.
32. To resolve this situation the Council should now properly audit the direct payment account from the time direct payments were first made. This will result in all parties knowing that the direct payments have been correctly used to meet Mr X’s assessed eligible needs and whether the Council owes any money for the period when it failed to make payments.
33. I am also of the view this matter has been poorly handled by the Council. There is evidence to suggest the Council delayed in taking action, delayed in dealing with Mrs Y’s complaints and as a result put her to avoidable time and trouble. It also should not have asked her to pay for mediation to resolve the problems. I consider she is due a payment to recognise this and the frustration suffered.

Agreed action

34. Within one month of my final decision the Council should:
• pay Mrs Y £250 to recognise the frustration experienced as a result of the Council’s delays in this case; and
• properly audit the direct payment account; notify Mrs Y of the outcome and pay any monies owing;
35. Within three months of my final decision the Council should:
• review its direct payment monitoring process to ensure it is fit for purpose. It should ensure any queries on accounts are dealt with promptly and clear instructions are given about the appropriateness of how money is being spent.

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Final decision

36. I will now complete my investigation as a suitable remedy for the injustice caused to Mrs Y is agreed.

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Investigator's decision on behalf of the Ombudsman