Summary: There was fault in the way the Council decided to send Mr B an invoice for a contribution towards care costs from 2016 to 2018. Mr B had paid the contribution from the wrong account, but there was fault in the Council’s communications about this error and its failure to take any action earlier. The Ombudsman recommends the Council apologises to Mr B, writes off part of the debt and offers him a meeting and a repayment plan for the remainder of the debt.

The complaint

1. Mr B complains on behalf of his adult son, Mr C. He says the Council failed to properly inform him that he could not use Mr C’s direct payments to pay Mr C’s contribution towards his care fees. He says it is unfair for the Council now to ask Mr C to pay the contribution again from 2016.

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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 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

4. I have discussed the complaint with Mr B. I have considered the documents that he and the Council have sent, the relevant law, guidance and policies and both sides’ comment 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 (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.

Personal budget

6. The Council has a duty to assess adults who have a need for care and support. If the needs assessment identifies eligible needs, the Council will provide a support plan which outlines what services are required to meet the needs and a personal budget which sets out the costs to meet the needs.

Contribution from income

7. If a person has capital below a certain threshold, the Council will pay for their care package fees. Regardless of capital, a person may still have to pay a contribution from their income (this includes most benefits) towards the fees.
8. The council will carry out a financial assessment to decide what the person’s contribution will be.

Direct payments

9. The Council can organise the care and support or a person can choose to receive direct payments to arrange the care and support themselves.
10. The direct payments can only be used in accordance with the support plan and any unauthorised use of the money will need to be repaid.

What happened

11. Mr C has a learning disability and is not able to live independently without support. He receives support from Mr B and from a package of support which the Council pays for.
12. Mr C receives direct payments, sometimes called an Individual Budget (IB) from the Council. Mr C does not have the mental capacity to manage his finances so Mr B does so on his behalf. The Council carried out an audit of Mr C’s direct payments every year.
13. The Council says it used to deduct the contribution from the direct payments and then pay the net balance to Mr C. Mr B would then transfer the contribution into the direct payment account so Mr C had the full direct payments in his account and this met his needs.
14. Mr C used to receive funding from the Council and the Independent Living Fund, but the Independent Living Fund ceased to exist in June 2015. After that date, Mr C’s entire care package was funded by the Council. The Council also increased the contribution Mr C had to pay. Mr B complained about this increase and had meetings about his complaint as he did not agree with the level of contribution Mr C had to pay.
15. The Council wrote to Mr C in June 2015 and said:
• Mr C’s financial contribution was £23.77 a week.
• The financial contribution would be deducted from the direct payments the Council made.
• Mr B should pay the financial contribution into the dedicated DP bank account.
16. However, the Council has informed me that this letter was not correct. The Council had changed its practice and had started to pay Mr C the entire amount of direct payments and then invoiced him for the contribution. The idea was that Mr C should then pay the contribution back to the Council from his own income (benefits).
17. The Council says Mr B paid Mr C’s contribution to the Council from the direct payments account, but also still transferred the contribution amount from Mr C’s personal benefit account into the direct payments account so in effect Mr C was paying his contribution from his benefits income. When I spoke to Mr B, he said this was not the case.
18. The Council carried out an audit in April 2016 for the period from January 2015 to March 2016 and raised no concerns.
19. The Council says Mr B stopped paying Mr C’s contribution into the direct payments account in October 2016. But he continued to pay the contribution to the Council from the direct payments account. This was a problem as Mr B was in effect paying the contribution from Mr C’s direct payments which should not happen.
20. Mr B signed the direct payment agreement in November 2016 which said:
• ‘… the amount of your contribution will be deducted from your direct payment before we pay it to you. You will be expected to pay your contribution into your Direct Payment Account, preferable weekly, or at least on a four weekly basis.’
• ‘You agree to use your Direct Payment, including your assessed contribution, only for equipment, minor works or services which enable you to achieve your outcomes and meet your assessed eligible needs as agreed in your Support Plan.’
• The Council could ask Mr C to repay his direct payments if the direct payments were not used to meet the agreed outcomes as set out in the support plan or he had not met the terms of the agreement.
• The Council could suspend or stop direct payments if the payments had been used for items or services not in the support plan or if there was evidence of deliberate misuse of funds.
• It could reduce the direct payments if Mr C had accrued a surplus.
21. The Council wrote to Mr C in January 2017 and said:
• The contribution may be payable into this direct payment account. His care manager would have discussed this with him.
22. The Council audited Mr C in May 2017 and checked the accounts from March 2016 to 2017. The Council officer’s note of the audit said Mr B was ‘putting his financial contribution into the account even though he was on gross payments then paying his financial contribution invoices from the account which shouldn’t happen. The financial contribution invoices are still being paid from the [direct payments] so dad is short by £182.04 (too much paid from the account).’ The officer recommended that someone should contact Mr B and advise him how to pay the financial contributions and how the PA’s wages and holiday works.
23. Mr B rang the Council several times in 2017 as he was unhappy about the amount of contribution that Mr C had to pay. The Council investigated his complaint and wrote to Mr B in November 2017. There is no mention in this letter about the contribution being paid from the wrong account although the letter did say that the Council acknowledged that some of the information it produced was not as clear as it could be.
24. On 14 March 2018, the Council officer carried out the yearly audit. The Council officer noted that Mr B paid the contribution from the direct payment account and told Mr B that this was not correct and explained this was why the account was running low. Mr B said he was not aware of this and would transfer the standing order straightaway.
25. The officer recorded that the total contribution paid from the direct payment account was £1,168 but the officer was unsure what to recommend as Mr B said he was not informed that what he was doing was wrong. The officer said Mr B was now aware that the contribution should come from the personal account so this should be checked at the next audit.
26. On 11 September 2019, The Council sent an invoice to Mr C for £2,083. This invoice covers the time from October 2016 to October 2018.
27. Mr B complained in September 2019. He said he paid the contribution every month and had done so for years. He did not understand why the Council was now asking him to pay the money again.
28. The Council said the Council paid the direct payments into a dedicated direct payments account which was only to be used for Mr C’s care costs. However, Mr B had paid Mr C’s financial contribution from the same account. The contribution should have been paid from Mr C’s benefits income, not from his direct payments.
29. As part of my investigation, I asked the Council why the direct payments account did not have a deficit as it would have lacked the contribution amount. I also asked if the Council ever checked whether Mr B made any payments towards Mr C’s care from Mr C’s personal (benefits) account in which case this would cancel out the fact that the contribution was paid from the direct payments account.
30. The Council said that it allowed an extra contingency sum in the direct payments account which may be why the account was not in debit. It said it did not know whether the auditor had ever checked whether payments towards care had been made from Mr C’s personal account.

Analysis

31. The facts that are not in dispute are that Mr B always paid Mr C’s contribution, but he paid it from the wrong account.
32. My investigation has focussed on whether there is any fault in the way the Council then decided to invoice Mr B and ask him to pay the money again.
33. Mr B says the Council did not inform him, until he received the invoice, that he should not pay the contribution from the direct payments account. The Council says it informed Mr B of this request many times, but he did not follow the advice.
34. A basic principle of good governance is communication. If the Council was penalising Mr B for doing something he should not have done, it must be able to show that it informed Mr B that what he was doing was wrong and what the penalty would be.
35. The first part of this investigation was to consider what information the Council gave to Mr B, both verbally and in writing.
36. I cannot find evidence that the Council told Mr B about the requirement to pay the direct payments out of Mr C’s personal account until 14 March 2018.
37. In terms of written communication, I can find no evidence the Council wrote to Mr B to inform him that he had to pay his direct payments from Mr C’s personal account, nor that it ever threatened him with the penalty of repayment if he failed to do so until it sent him the invoice in September 2019.
38. In addition, I note that the Council’s letter dated June 2015 and the direct payments agreement were all incorrect as they referred to the contribution being deducted from the direct payment before the Council paid it out whereas the Council had changed its practice.
39. Therefore, my view is that there was fault in the Council’s decision to invoice Mr C for costs going back to 2016, as there is no evidence the Council informed Mr B that what he was doing was wrong until March 2018.
40. There was also fault in the Council’s failure to ever write to Mr B (before the invoice of September 2019) to explain to him what he should do in terms of the contribution and to warn him that, if he continued to fail to pay the contribution from the correct account, the penalty could be that he would have to pay the money again.
41. There was also fault in the Council’s failure to act earlier. The Council took no action, even after the audit of March 2018 to rectify the situation. It then invoiced Mr C for the entire amount from 2016 in September 2019 and expected him to pay it all immediately.
42. I also do not understand why the Council did not explore other options with Mr B when it discovered the problem. It could have started to deduct the contribution before paying out the direct payment or it could have asked Mr B to transfer the missing contributions to the direct payment account.
43. I have considered the injustice Mr B and Mr C have suffered as a result of the fault. The injustice is that the Council unfairly penalised Mr B and Mr C for paying the money from the wrong account, certainly until March 2018. But also, generally, if the Council had dealt with the problem earlier on, the debt would not have built up as Mr B could switch the payment to the correct account. The injustice is that Mr C now has a large debt which the Council expects him to pay in its entirety immediately and he may not be able to do this.
44. Also, it is still not clear, from the audit, whether Mr B paid for some of the care directly from Mr C’s account which would then cancel out the fact that he paid the contribution from the direct payment account.
45. I therefore recommend the Council writes off the debt from October 2016 until March 2018. The Council should offer a meeting to Mr B to go through the accounts. If Mr B has any evidence that he paid for care directly from Mr C’s personal account, then he should take it to this meeting so the Council can consider whether the debt should be reduced. The Council should offer Mr B a repayment plan for the remainder of the debt.
46. In its reply to the draft decision, the Council agreed the recommended remedy, but wanted it noted that Mr B has still not started paying the contribution from Mr C’s personal account and has now questioned why a contribution was payable.
47. The Council also said that, in addition to the recommendations the Ombudsman made, it would complete a review of the failings identified and look to implement service improvements. This will include a review of direct payment agreements and financial assessment outcome letters to ensure they clearly reflect that contributions are paid from individuals’ income. In addition to offering to meet with Mr B, the Council would also send him a further letter to confirm contribution arrangements.
48. I note these additional actions the Council proposes to take which are positive. I also clarify that my decision has not found fault with the Council’s requirement that Mr B pays the contribution from Mr C’s personal account. The fault I found related to the communication and the delay in taking action.

Agreed action

49. The Council has agreed to take the following actions within one month of the final decision. It should:
• Apologise in writing to Mr B and Mr C for the fault.
• Write off the debt from October 2016 until March 2018.
• Offer a meeting to Mr B to consider the accounts.
• Offer a repayment plan to Mr B for the outstanding debt.

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Final decision

50. I have completed my investigation and found fault by the Council. The Council has agreed the remedy to address the injustice.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman