Summary: There was fault in the way the Council communicated with Ms C about a debt in April 2017 and failed to carry out a yearly review in April 2018. This partly contributed to Ms C not knowing that she owed a debt. The Council has already apologised for the fault and put in service improvements. These actions have adequately addressed the concerns the Ombudsman has identified.

The complaint

1. Ms C says the Council knew that a debt was accruing on her direct payment account in September 2017 and should have informed her earlier. Its failure to do so resulted in a large invoice in January 2019.

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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 Ms C’s representative. I have considered the documents that she and the Council have sent, the relevant law, guidance and policies and the Council’s reply to the draft decision.

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What I found

Law, guidance and policies

Personal budget

5. Everyone whose needs the local authority meets must receive a personal budget as part of the care and support plan. The personal budget gives the person information about the money allocated to meet the needs identified in the assessment and recorded in the plan.

Direct payments

6. A person can choose to receive support commissioned by the Council or they can choose to receive direct payments to arrange the care and support themselves.
7. The amount of direct payment is derived from the personal budget set out in the care and support plan.

Terminating direct payments

8. Direct payments should only be terminated as a last resort, or where there is clear and serious contradiction of the regulations or conditions. Local authorities should take all reasonable steps to address any situations without the termination of the payment. Effective, but proportionate monitoring processes will help local authorities to spot any potential issues before a termination is necessary.
9. In all cases, as soon as possible, the local authority should discuss with individuals, their carers and any person managing the direct payments if it is considering discontinuing direct payments to them, in order to explore all available options before making the final decision to terminate the direct payments.
10. If the local authority does decide to withdraw direct payments, it will need to conduct a review of the plan and agree alternative care and support provision with the person.

What happened

Background

11. Ms C has learning difficulties and received a package of support from the Council. The care plan from 2015 said she received support 4 hours a week (£16 per hour / £64 a week) from charity L. Ms C received direct payments and employed charity K to manage her direct payments. Her total weekly personal budget was £70.92.
12. Ms C did not pay a contribution from 2015 until March 2017 so the Council paid the entire £70.92 as a direct payment to charity K.
13. The Council re-assessed Ms C’s finances on 11 March 2017 and said she had to pay a contribution of £62.32 per week and the Council would only pay £8.60. The Council wrote to Ms C on 18 April 2017 to explain this and said she was expected to pay her weekly contribution into her direct payment account. Ms C signed the letter on 20 April 2017 to acknowledge that she had received it.
14. The Council should have reduced its payment from £70.92 to £8.60 in March 2017, but continued to pay the higher amounts for 9 weeks and this led to an overpayment of £560.88.
15. Ms C had to repay the overpayment and the plan was for the direct payments team to contact Ms C to see if she wanted to repay the £560.88 in full or, if not, the Council would stop the direct payments of £8.60 until the debt was repaid. There are no notes that this conversation took place, but the Council stopped paying its £8.60 from April 2017 until August 2018 when the debt had been repaid.
16. Ms C started to pay her two week’s contribution (£124.65) into her direct payment account in April 2017, but she only paid it every 4 weeks, instead of every 2 weeks. This meant, of course, that her direct payment account was in substantial deficit from April 2017 onwards.
17. Ms C stopped paying her contribution on 26 October 2018 as she was not satisfied with the care that charity L provided.
18. The Council stopped paying direct payments on 7 December 2018 as Ms C had cancelled the support package.
19. Charity K informed the Council in January 2019 that there was not enough money in Ms C’s direct payment account to pay the outstanding invoice to charity L.
20. The Council spoke to Ms C on 4 March 2019 and sent an internal email about the proposed plan. The officer said he had explained to Ms C that she had only been paying half of her contribution which had led to the debt. Ms C confirmed she was happy to repay the contribution she owed. The officer said Ms C should have paid charity L £4,872 (£58 x 84 weeks), but she only paid half of her contribution so she owed roughly £2,436. The officer planned to ask charity L what the actual amount of debt was and use that as the final figure Ms C owed. The officer was seeking authorisation to pay off charity L’s debt and then set up a repayment plan for Ms C to repay the debt to the Council.
21. Charity L sent an invoice of £1,740 to the Council on 25 March 2019.
22. In the following months there were further internal emails trying to get authorisation for the payments and the setting up of the repayment plan.
23. The service manager authorised the payment to charity L on 28 June 2019. She sent an internal email to other officers and said that a letter had to be sent to Ms C to explain what she had to pay back. The Council needed to ‘review what support she will need in relationship to this.’ The manager said Ms C ‘…will need support from family or from her support provider to set up repayment arrangements and deal with the correspondence re this as this will make her anxious.’
24. The Council paid the invoice of £1,740 to charity L on 2 July 2019.
25. There were internal emails at the Council on 5 July 2019 which said the Council was planning to contact Ms C to set up a repayment plan.
26. Ms C then paid the £1,740 to the Council on 10 July 2019.
27. Ms C complained to the Council in September 2019 via her representative. She said:
• The Council agreed to pay the invoice to charity L and alleviate her of the responsibility of this. Is this true and why did the Council change its position?
• The shortfall in client contributions was identified in July. Ms C queried how this happened and who made the mistake. Why was this not addressed in September 2017?
• Why was no repayment plan set up?
28. The Council replied and said:
• The Council agreed to pay charity L as there were insufficient funds in Ms C’s direct payments account. There was then a delay in agreeing the repayment plan with Ms C. Ms C paid the invoice before the Council contacted her to arrange a repayment plan. The Council partially upheld this complaint as it accepted there was a delay in contacting Ms C about the repayment plan.
• In response to the question why the error was not picked up in September 2017, the Council said the reviewing officer was notified of the increase in Ms C’s contribution by the finance team after the financial assessment. However, this information was not actioned by the reviewing officer due to an oversight. The Council upheld this complaint.
29. The Council said it had learned from Ms C’s complaint and had identified the following learning points:
• It had reviewed the process of updating customer records after any assessment that may have a financial impact.
• It would also clarify the repayment programme process to colleagues so that they could have clearer communications with customers and staff.

Further questions

30. I asked the Council to clarify its comment that it partly upheld the complaint that the shortfall was identified in September 2017 and Ms C should have been informed. I asked what happened in September 2017.
31. The Council said that this date was an error as there was no review in September 2017. The officer was referring to the problem that had arisen in April 2017 where Ms C owed the Council £560.88. The Council should have contacted Ms C about this, but there are no notes that this conversation took place. That is why it partly upheld the second part of the complaint.
32. I asked how frequently the Council carried out direct payment reviews. The Council said it carried out reviews every 12 months so there should have been a review in April 2018. This may not have shown that Ms C was in debt to charity L but may have shown that payments were not being made as expected. However, Ms C appointed charity K to manage the payments for her and charity K should have been aware of the problems.
33. I asked the Council why the debt was allowed to accrue and why the Council took no action earlier. The Council said:
• The Council only became aware of the debt when charity K contacted them in January 2019.
• Ms C ‘…was in receipt of a direct payment to pay for their own care, the arrangement for the care with the provider would have been a private arrangement between those two parties and the responsibility of the service user to pay for their care with the direct payment monies and the client contribution. The arrangements for [charity K] to manage the account is an arrangement between the service user and [charity K].’
34. The Council also clarified the further actions it took in terms of service improvements as a response to the complaint. It has:
• Amended its procedures so that all terminations of direct payments are now agreed by the relevant head of service to ensure they are appropriate and individuals are not left without care. 
• It has introduced a case escalation panel for cases that require further discussion and action.
• It ensures there are communications to the Direct Payment team to ensure they do not end the financial element of the direct payment without formal evidence of the authorisation from the appropriate Head of Service. 
• It will send correspondence to relevant staff reminding them of the guidance relating to the termination of direct payments. 
• It has updated its direct payments process and has implemented procedures that would prevent the error in Ms C’s case from happening again. 

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Analysis

35. The Council upheld the complaint about the communication in April 2017 (although it said this happened in September 2017) and I agree this was fault.
36. The Council should have spoken to Ms C or charity K to find out how Ms C wanted to repay the debt she owed and there is no evidence it did so.
37. I am also concerned that the Council stopped the direct payments as it is not clear that it had grounds to do so. Ms C had not misused the direct payments. It is true that a debt had accrued but that was partly because the Council overpaid Ms C and partly because Ms C had not started paying in the contribution. The CASS guidance says that, if councils plan to stop direct payments, they should do so as a last resort, they should discuss options with the recipient and offer a direct service. The Council failed to do this and this was fault.
38. The Council should also have carried out a review in April 2018 which it did not do which is further fault.
39. The final fault was that there was a short delay in July 2019 in the Council contacting Ms C to inform her that it was offering a repayment plan.
40. I will consider what injustice Ms C suffered and whether any further remedy is required.
41. Ms C’s main complaint was that the Council knew about the debt earlier but failed to inform her.
42. However, the Council says it would not have known about the increasing debt early on as this was not a debt to the Council. I agree. Charity K and charity L would have known about the problem early on, but not the Council. The Council would have only become aware of the problem at the time of the yearly review.
43. I also accept that it was not the Council’s role to manage Ms C’s direct payment account. That was charity K’s role. I do not know why Ms C did not pay her full contribution into the account and when charity K advised her of the problem. Charity K’s actions are outside of the Ombudsman’s jurisdiction, but I agree with the Council that charity K should have known about the problem from the outset, much earlier than the Council.
44. But the Council should have carried out a review in April 2018 and did not do so. Therefore, it missed a chance to alert Ms C to the problem at that stage.
45. The main injustice was that Ms C was faced with a large invoice in one instalment. The Council’s fault partly contributed to this, but only to a small extent, as I have explained.
46. I have considered whether the remedy would be to reduce the debt, but there is no evidence that Ms C has overpaid any money. On the contrary, the final invoice was lower than what the Council expected it to be.
47. The appropriate remedy for the problem of the large invoice was to ask the Council to offer Ms C a repayment plan. I can see from the documents that the Council was planning to do this but Ms C then paid the debt. I also note that the Council has already apologised to Ms C and has put in place service improvements relating to the communication about debts and the direct payments. I am of the view that these are appropriate remedies for the fault and I do not recommend any further remedy.

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Final decision

48. The Ombudsman has identified fault and the Council has already addressed the injustice Ms C has suffered as a result of the fault.

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Investigator's decision on behalf of the Ombudsman