Summary: It was not fault for the Council to require use of a pre-paid card as a way of enabling Mr and Mrs X to manage their daughters’ Direct Payment accounts more efficiently. The Council has a duty to ensure the proper management of public funds.

The complaint

1. Mr and Mrs X (as I shall call them) complain that the Council threatened to withdraw the Direct Payments used to fund the care of their disabled daughters, C and G, unless they agreed to use pre-paid cards to pay for the care. They say the Council failed to see C and G personally to carry out the review of their needs.

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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. 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

3. I considered the information provided by the Council and by Mr and Mrs X. I spoke briefly to Mr X. Both the Council and Mr and Mrs X had an opportunity to comment on an earlier draft of this statement and I took their comments into consideration before I reached a final decision.

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What I found

Relevant law and guidance

4. 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 clear information about the money allocated to meet the needs identified in the assessment and recorded in the plan.

There are three main ways in which a personal budget can be administered:

• As a managed account held by the local authority with support provided in line with the person’s wishes;
• As a managed account held by a third party (often called an individual service fund or ISF) with support provided in line with the person’s wishes;
• As a direct payment. (Care and Support Statutory Guidance 2014)

5. Direct payments are monetary payments made to individuals who ask for one to meet some or all of their eligible care and support needs. They provide independence, choice and control by enabling people to arrange their own care and support to meet their eligible needs.
6. The Care and Support Statutory Guidance says, ‘Many local authorities have been developing the use of pre-paid cards as a mechanism to allow direct payments without the need for a separate bank account, or to ease the financial management of the payment…..they should not be provided as the only option to take a direct payment The offer of a 'traditional' direct payment paid into a bank account should always be available if this is what the person requests and this is appropriate to meet needs..’ (CSSG 12.58)
7. The Care and Support Statutory Guidance also says, “The local authority must be satisfied that the direct payment is being used to meet the care and support needs set out in the plan, and should therefore have systems in place to proportionally monitor direct payment usage to ensure effective use of public money…… Monitoring should be proportionate to the needs to be met and the care package.” (CSSG 12.24)
8. The Council’s Direct Payments policy says ‘It will be made clear to individuals that the direct payment account is subject to auditing and the need for good record keeping on expenditure is important.’ It goes on, ‘All direct payment accounts will be subject to quarterly (every 3 months) monitoring. Individuals shall provide this information within 14 days of the quarter end request. Failure to provide such documentation shall result in a reassessment of the individuals’ eligibility for receipt of a direct payment.’
9. The policy also says, ‘If the Council is considering discontinuing a direct payment they will make all reasonable attempts to discuss as soon as possible with the individual or their authorised person all available options before making the final decision to terminate the direct payment.’
10. The policy explains that everyone who receives services from the Council is assessed to see whether they are required to make a financial contribution towards the cost of their care. It goes on, “The Council will deduct the assessed contribution from the total amount of the direct payment before the individual receives the payment. The individual must pay the assessed contribution onto their pre-payment card, into their nominated direct payment bank account or into their managed account every 4 weeks. By making this payment, the individual is ensuring that there is enough money available to pay for their full support as detailed in the care and support plan.”

What happened

11. Mr and Mrs X have two disabled daughters, C and G, who need 24-hour care. They live in adjoining properties of which one is converted into specially adapted living space for C and G, with access between the two properties. The Council provides a personal budget by way of Direct Payments to meet the needs of C and G’s care, and Mr and Mrs X employ a care team of Personal Assistants. The payments are made net of C and G’s contribution into designated Direct Payment bank accounts.
12. The Direct Payments agreement between the Council and Mr and Mrs X says the Council will review the care needs on an annual basis.
13. The agreement also says, “The Council will monitor how the Personal Budget/Direct Payment is managed and used… [you must] supply to the Council (when requested to do so) all documentation held by you that relates to the Personal Budget/Direct Payment”. The agreement says the Council may terminate it immediately if any of the terms of the agreement are not met. The agreement also says (in bold) “You agree to pay your contribution towards your Personal Budget/Direct Payment”.
14. Mr X says they have not signed a Direct Payment Agreement since 2014 as they do not believe it complies with the Care Act requirements in respect of Direct Payments. They also say the Council has substituted its term “audit” for the term “monitoring” used in the Care Act Statutory Guidance.
15. The Council says the Direct Payment arrangements worked well until 2018. It says the monitoring information it required to comply with the terms of the Direct Payment agreement started to be delayed.
16. The social worker for C and G says when she completed the annual review in 2019 there were already concerns about some unpaid contributions into C and G’s Direct Payments accounts, and lack of evidence about expenditure, and the accounts were regarded as ‘high risk’ as a result. She recorded in her notes of the annual review in February 2019, “No evidence of spend submitted for 2 years – (Mr and Mrs X) advised that they have all of the invoices in a folder however it takes a lot of time that they haven't got to scan these in”. The notes continue “I discussed a pre-paid card with (Mrs X) and provided her with some information to explain how a pre-paid card works. She suggested that this may be easier as she would not have to send all bank statements in.”
17. In March 2020 the Council wrote to Mr and Mrs X saying they had not paid the assessed contributions into the Direct Payments bank account. In June 2020 the Council wrote to them again reminding them of a contractual obligation to provide monitoring information. It asked for all evidence of expenditure from January 2018 onwards, bank statements from 24th February 2020 onwards, and their current employer's Public Liability Insurance for the Personal Assistants they employed to care for C and G. It added that failure to supply the requested information might affect future Direct Payments.
18. The Council says by June 2020 there was £171,957.82 of expenditure unaccounted for.
19. The social worker telephoned Mr X to arrange the annual review in July 2020. She says Mr X mentioned in the telephone call that he was finding it difficult to manage the Direct Payments due to the level of administration required.
20. The annual review took place by telephone, because of Covid 19 restrictions, on 8 July. The social worker completed a new care and support plan for C and G. She says she also discussed the Direct Payment accounts, “specifically unpaid client contributions amounting to approximately £3,000 and unaccounted spend on both accounts”. She says she reminded them the Direct Payment agreement was conditional on the production of the required monitoring information and confirmation of contribution payments. She says she explained that a pre-paid card would simplify the administration of the account as they would no longer be required to send in bank statements and payslips. She says she understood from the conversation that Mr and Mrs X agreed both C and G would be transferred to pre-paid card accounts.
21. The social worker emailed Mr and Mrs X the week after the review. She said “Going forward we discussed setting up a pre-paid card in order to manage the Direct Payment. This will mean that you will no longer need to send in bank statements. We ask that you use this card to purchase all care and support for the girls. I have attached some information regarding this for you to have a look at and I will ask our direct payments team to send you out the relevant forms to complete in order to set this up.” She also reminded them of the need to pay the assessed contributions into the Direct Payment accounts.
22. The social worker asked the Direct Payments team to send out information about the pre-paid cards to Mr and Mrs X. In October the team advised her there had been no change to the ‘high risk’ status of the accounts: no further information or evidence of contributions to the Direct Payment accounts had been received. She asked the team to send information about the pre-paid cards again as Mr X said he had not received it.
23. Mr X says in October he and Mrs X received information about the pre-paid cards and bank mandates to redirect the payments away from the two accounts which were designated for the receipt of Direct Payments for C and G. They did not return the mandates. Both Mr and Mrs X returned the cards they subsequently received.
24. In December the Council paid £9863.20 into an account in Mr X’s name held with the pre-paid finance company. Mr X says he had no knowledge of the account. He emailed the Council as it had not made a payment into the two bank accounts designated for C and G’s Direct Payments.
25. The social worker agreed with the Direct Payments team to transfer the money from the pre-paid accounts into the designated bank accounts to ensure Mr and Mrs X could pay C and G’s care team. She emailed Mr X on 15 December: “I am surprised by your email stating that you were not aware of the pre-paid card being delivered as we had discussed this during (the) annual reviews over the telephone on the 8th July 2020, and in addition to this I sent an email on 15th July 2020 to explain that the Direct Payments Team would be sending out all information to set up the pre-paid card.” She said she had agreed to transfer the money back into the designated bank accounts but said “we cannot do so again. The accounts must be moved over to pre-paid cards due to monitoring issues with how the existing Direct Payment is currently managed. If the pre-paid cards are not set up, the direct payments will need to cease and we will need to discuss providing care directly through a care agency.”
26. Mr X says the arrival of the email shortly before Christmas caused enormous distress. He says there had been no prior indication that the Direct Payments might stop. He says despite efforts to protect C and G, the suggestion that their care might move to a managed agency was concerning for them. He says there has never been any suggestion by the Council that the Direct Payments are being used for anything other than to support C and G, or that there has been any doubt about the care they receive.

The complaint, and the Council’s response

27. In January 2021 Mr and Mrs X made a formal complaint to the Council about the conduct of the social worker, her failure to meet C and G at their property, the threats to withdraw Direct Payments, and the failure to make payments into the designated bank accounts.
28. The Council’s head of care services replied in March after investigating the complaint. She did not uphold the complaints that the social worker had bullied them and that the coercive use of the pre-paid cards was a contravention of the Care Act. She said ‘the Direct Payment is considered high risk and due to the unaccounted spending on the accounts, the Local Authority are therefore able to change the mechanism for payments to ensure that public funds are being spent as assessed within the care and support plans.’
29. The head of care services did not uphold the complaint that the failure to make the normal payment into the designated bank account had caused a grave threat to C and G’s wellbeing. She said the social worker did not know they had declined to use the pre-paid cards until 11 December: she contacted the Direct Payments team and within one day the money was transferred into the designated bank account.
30. The head of care services did not uphold the complaint that the social worker had sent a late reply ‘in a fit of pique’ threatening the withdrawal of Direct Payments and the change to a managed service. She said ‘The Local Authority has a statutory responsibility to monitor expenditure of the direct payment and have offered a pre-paid card as an alternative to the direct payment accounts which will enable (C and G) to continue receiving services without disruption. The guidance clearly states that services can be arranged in place of a direct payment……I have also taken into consideration the fact that the direct payment has remained at high risk for a significant period of time’. She added, “there is no doubt that (C and G) are well cared for by you.”
31. The Council upheld or partially upheld complaints that there was a delay in the response to an email over the Christmas period: that it could not tell from its records whether the social worker had met with C and G personally or not; that the correspondence was confused over whether Mr or Mrs X was responsible for the management of the Direct Payments, and that the review documents themselves did not reference the Direct Payments discussion. It said going forward it would ensure practitioners noted on the record if they had met the subject of a review; it would consider including Direct Payments discussions in the review papers; it would ensure service users were made aware of their right to make formal complaints.
32. The Council concluded by saying if they did not want to progress with the useof a pre-paid card then the Council would need ‘to review the agreement to pay for care via a direct payment and explore the option of providing care to C and G directly through a care agency’.
33. Mr X complained to the Ombudsman. He said after 20 years the Council was now insisting they used a pre-paid card to manage the Direct Payments. He said the actions of the Council had caused their family intolerable stress over a very difficult Christmas period.
34. The Council says “numerous” reminders and requests were sent to Mr and Mrs X about monitoring information and contributions payments. It says “Despite this, since April 2018, monitoring information has not consistently been received, and since June 2020, no monitoring information has been received to enable the Local Authority to monitor the spending of both (C and G’s) direct payments effectively.” The Council says it was the failure to provide required information which prompted the discussion about pre-paid cards as a way of simplifying the management of the Direct Payment accounts. Mr X says they have always submitted annotated bank statements on request which should be sufficient to satisfy the Council that the payment is being used to meet the care and support needs set out in C and G’s plans.
35. The Council says it put on hold the process of transferring funds to the pre-paid accounts when it fully understood the family’s position: however, it says that contrary to Mr X’s remarks, “There is no evidence that any action suggested has been with the intent of constraining choice and control of services, as a pre-payment card still enables choice and control over how care is arranged.”
36. The Council has offered to meet the family to discuss the options available and to ensure C and G’s needs are being met but so far these offers have been declined.

Analysis

37. It was not fault on the part of the Council to require the submission of regular information about the way in which Direct Payments were spent, nor to require evidence that contributions were paid into the Direct Payment accounts as calculated.
38. The Direct Payments agreement and the Council’s Direct Payments policy both clearly set out the consequences of failing to provide the requested information. The Council wrote frequently to Mr and Mrs X reiterating the need to provide the information. Its letters set out for Mr and Mrs X that failure to supply the information might affect future Direct Payments, so it is not correct for Mr X to say the Council’s actions in December 2020 were the first indication that Direct Payments might be affected. The Council complied with its policy, and I see no evidence of fault there.
39. There was some confusion over the extent to which Mr and Mrs X had accepted the prospect of the pre-paid cards during the annual review (although Mr X says there was no confusion on his part). The social worker clearly regarded their discussion as an acceptance by them that the new system would be put in place: Mr and Mrs X had no such view. It was not fault for the Council to send out the cards as expected.
40. It was a shock for Mr and Mrs X to find the accounts had been set up and December’s funds paid into them. It was also concerning for Mr X to consider a mandate had been set up in his name without his agreement or signature and the Council should consider how it approaches that point in the future. However, as it was only 24 hours before the money was transferred back to the designated accounts, I do not agree there was significant injustice caused.

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Final decision

41. I have completed this investigation on the basis there was no fault on the part of the Council. It complied with its Direct Payments policy and the agreement reached with Mr and Mrs X.

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Investigator's decision on behalf of the Ombudsman