Summary: We did not uphold Ms X’s complaint about reclaiming an unspent direct payment because the Council acted in line with Care and Support Statutory Guidance and its direct payment policy and explained how it had calculated the payment that Mr Y needed to make.

The complaint

1. Ms X complained for her brother Mr Y that Shropshire Council (the Council) asked her to repay Mr Y’s direct payment. She said the Council did not explain why it had only contributed a small amount towards Mr Y’s care.
2. Ms X said she and Mr Y had decided not to have direct payments anymore because Mr Y received no benefit. She said the Council’s fault caused her avoidable time, trouble and distress.

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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. 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 considered Ms X’s complaint, the Council’s responses to the complaint and documents described in this statement. I discussed the complaint with Ms X
5. Ms X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Relevant law and guidance

6. Direct payments are cash a council gives to a person who needs care and support. They give the person more flexibility and control and enable them to arrange their own care.
7. Councils can charge people for care and support. The legal framework for charging is in sections 14 and 17 of the Care Act 2014, in detailed regulations and in statutory guidance. To work out the charge, which is called a client contribution, councils carry out a financial assessment which includes all the person’s income and capital. There are rules about income and capital which is ignored (“disregarded”) and some expenses which are also disregarded. Regulations tell councils they must leave the person with a minimum income. If the person has income above the minimum legal amount, then the council can say they need to use this to pay their client contribution.
8. Care and Support Statutory Guidance, Paragraph 8.15 says councils must not charge someone more than the cost it incurs in meeting the assessed needs of the person. (This means a council may not charge the person more than the cost of their care). Paragraph 12.35 emphasises a person has flexibility in how they use the direct payment as long as it is to meet eligible care and support needs.
9. The Council’s direct payment policy says:
1. People need to pay their client contribution into their direct payment account.
2. People need to give four weeks’ notice if they no longer want to receive direct payments
3. It may ask the person to repay any money which is unspent and not needed.

What happened

10. Ms X is Mr Y’s attorney and manages his finances for him. Mr Y received a direct payment from the Council which Ms X used to employ personal assistants to provide him with care and support. The Council agreed weekly funding to meet Mr Y’s care needs of £194.12, (or £776.48 four weekly) paid net of Mr Y’s weekly client contribution which was £99.73 at the time. The four weekly payment the Council made (net of Mr Y’s contribution) was £373.56
11. The Council’s finance team wrote to Ms X in May 2019, May 2020 and March 2021 about changes to Mr Y’s maximum weekly client contribution. The letters set out the payments Mr Y needed to make into his direct payment account towards the cost of his care:
• £93.46 from the end of April 2019
• £99.73 from July 2020
• £101.08 from April 2021.
12. Ms X complained to the Council at the end of June 2021. She said:
• She contacted the Council about the balance in the account in October 2020 and a social worker did a social care assessment in January 2021 and agreed the unused money could be used flexibly during the pandemic.
• She could not see the point of staying on the direct payment scheme as Mr Y was paying for most of his care. She told the social worker this in April in an email. In response, the direct payment team called her to say they were closing the account and to send documentation in for a final audit
• She was not told about giving four weeks’ notice and did not agree with the figure the finance team had given.
13. The Council provided Ms X with a spreadsheet which set out in detail all the payments by the Council and payments Mr Y made. It set out all the things Ms X had spent the direct payment on: staff wages, activities, payroll and insurance. The Council’s final complaint response set out all payments in and out and explained why Mr Y needed to pay back £9661.06. The calculation started out with the balance at May 2019, added in both Mr Y’s contributions and the Council’s payments, subtracted all the costs Ms X had paid out and this left a balance of £9661.06. The response went on to say:
• It was sorry it did not adjust payments when she told officers Mr Y no longer used a payroll company. This was an oversight.
• The financial assessment determines the maximum client contribution and charges no higher than this. If the weekly cost of care is less than the contribution, a person is charged the actual cost of their care. Mr Y’s care cost more than his contribution so he had to pay his contribution
• An audit took place for March 2020 to April 2021. Mr Y was charged more than the services he received during that period and so was due a refund of £150.04 and this could be taken from his direct payment account. He still needed to repay the balance of £9661.06.

Findings

14. The Council is allowed to charge Mr Y for his care according to charging rules and guidance summarised in paragraphs seven and eight. The Council’s reconciliation (audit) of the spending on the account indicates Ms X had under-spent the direct payment during 2020-2021. This was likely because many activities which Mr Y might have otherwise used the direct payment to access, were closed, or he may not have wished to access the community as much during the pandemic.
15. I am satisfied Ms X received appropriate general advice that the payment could be used flexibly during the pandemic. This is within Care and Support Statutory Guidance paragraph 12.35 and there is no fault. I am also satisfied the Council refunded Mr Y those client contribution payments he made in excess of the cost of the care he received. This is also in line with Care and Support Statutory Guidance, paragraph 8.15 and so no fault by the Council.
16. The Council’s policy on direct payments allows it to reclaim unspent money when a person decides to stop having a direct payment and says people need to give four weeks’ notice if they want to stop getting direct payments. Ms X feels the Council should apportion the unspent money, so Mr Y gets more back on account of the client contribution he has paid into the account. It is the case that because of the underspend, the Council ended up contributing a smaller amount than Mr Y but this does not mean the Council is at fault. Often people have to pay much more towards the cost of their care than a council does. This is not fault, it is the way the system works.
17. It is unfortunate that there was a large balance in the account at the time Ms X and Mr Y decided they did not want a direct payment anymore. The money could have been used more flexibly for care and support during the post lockdown period when community services were opening up again as the social worker suggested in January 2021. The Council only reclaimed the money at the point it did because Ms X and Mr Y wanted to stop having a direct payment and so the account needed to be audited/reconciled before closure. The Council acted in line with its direct payment policy which allows it to reclaim unspent payments and I do not regard this as fault.

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Final decision

18. There is no fault in the Council reclaiming unused money in a direct payment account before closing it.
19. I have completed the investigation.

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Investigator's decision on behalf of the Ombudsman