Summary: Mrs X complained about the Council’s failure to advise her of the restrictions of its direct payments scheme. This led to a misuse of public funds that she cannot afford to repay. We have found some fault because the Council did not respond to Mrs X's proposal to employ her family to provide care. We have made recommendations to the Council to reflect the limited injustice that arose from this fault. Otherwise, we were satisfied Mrs X was given sufficient information to understand public funds could only be spent on assessed support needs.

The complaint

1. Mrs X complains about the Council’s decision to ask her to repay direct payments because they were spent inappropriately. She says they were used to support her daily care needs and general well-being.
2. She also complains about the Council’s failure to provide advice about what direct payments should be used for.
3. Mrs X says the Council’s demand for repayment has caused significant distress because of her financial situation.

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The Ombudsman’s role and powers

4. 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)
5. If we are satisfied with an organisation’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

6. I spoke to Mrs X and reviewed the information she provided.
7. I made enquiries with the Council and reviewed the relevant law and policy.
8. Mrs X and the Council now have an opportunity to comment on my draft decision. I will consider their comments before making a final decision.

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What I found

Direct payments

9. Direct payments are cash payments a council makes to a person with eligible social care needs, instead of providing them with care services. They give people control and choice over their care arrangements and let people have greater flexibility and independence.
10. A person must spend direct payments on eligible needs set out in their care plan.
11. The Care and Support Statutory Guidance says the council must be satisfied that the direct payment is being used to meet the care and support needs set out in the plan and councils should therefore have systems in place to proportionally monitor direct payment usage to ensure effective use of public money.

The Council’s Direct Payment policy

12. This includes the following restrictions:

• They can only be used to arrange and receive the support detailed in the care and support plan.
• They cannot normally be used to employ any family members who live in the same household apart from in exceptional circumstances.

What happened

13. In January 2022 the Council carried out a care needs assessment. This led to a care and support plan (the Plan) stating Mrs X required 7.5 hours of support per week. This would help Mrs X with shopping, meal preparation, dog walking, managing her home and personal care. This amounted to a personal budget of £189 per week.
14. Mrs X decided she preferred to arrange this support herself, funded by a direct payment. She signed the Council’s direct payments agreement. On this form she handwrote, “Please pay to me so I can pay a family member to help me”.
15. Mrs X was issued with a prepayment card (the Card). In March 2022, Mrs X’s direct payment account was credited with £2500. Upon receipt of the Card, Mrs X she phoned the relevant helpline number. She says she was told she could spend the money on whatever she liked.
16. Shortly afterwards, the Council became concerned about how this money was being spent. Mrs X had contacted the Council to say her card had been refused at a fast-food outlet. This led to Council to make further enquiries about Mrs X’s account and showed Mrs X had, amongst other things, used her direct payment to buy disability equipment and put a deposit on a car. She had also made several cash withdrawals and used the Card in supermarkets and shops. As she needed to be accompanied on numerous medical appointments, she paid a family member for their expenses.
17. A social worker contacted Mrs X to explain the limitations of the direct payments scheme. Mrs X agreed not to use the Card while further enquires were made.
18. The Council audited her account and decided there has been a misuse of direct payments. Mrs X was asked to return approximately £3000.
19. Mrs X says she was not told there were restrictions about what she could use her direct payments for. She does not recall signing the agreement but accepts she may have done so but does not remember. She says she was often more confused than she would have appeared, due to her medication.
20. She says she cannot afford to repay the money and the matter has caused extreme anxiety and distress. Mrs X cancelled her direct payments and is instead now supported by her family.
21. In response to her complaint the Council said:

• the direct payments had not been spent in accordance with the direct payment agreement signed by Mrs X. £2000 had been transferred into Mrs X’s personal account that was used to pay family members to provide care. This was not included in the Plan;
• it would look at improving recording practices to ensure clear guidance was given around direct payments; and
• in future, a care worker would read through the direct payment agreement to ensure an understanding if the implications and responsibilities.

22. Mrs X says these service improvements are evidence of an admission that it acted with fault in her case.

Analysis

23. The Council’s policy on direct payments is clear. They can only be used to pay for care needs specified in the Plan. It also explains family members who live in the same household cannot normally be employed to provide care. This information is echoed in the direct payment agreement signed by Mrs X and its “Guide to direct payments”, given to all recipients.
24. When Mrs X attempted to use the Card in a fast-food restaurant, this alerted the Council to a possible misuse of the scheme. In response the Council correctly asked Mrs X to provide details of her expenditure. Having reviewed this information, the Council decided she had not acted in accordance with its policy. This was a decision the Council was entitled to make.
25. However, Mrs X says she was not made aware of the restrictions. In fact, quite the opposite. She says she was told the money could be spent on anything that promoted her general well-being by the call centre. The Council has provided the Ombudsman with a note from the relevant call centre. Although recordings of these calls have not been shared with the Ombudsman, the call centre manager has stated they did not include any discussions about how the money should be spent. However, in the absence of the actual recordings, I do not intend attaching any significant weight to this evidence.
26. In reaching my decision, I must assess whether the information contained within the Plan and the agreement was inadequate, as claimed by Mrs X.
27. The Plan stated Mrs X would have a support worker who would help her with dog walking, shopping and meal preparation. She would also have a carer visit every day to assist with showering and getting dressed. This does not cover the vast majority of Mrs X’s expenditure.
28. Mrs X did not use the funds to employ either a support worker or carer. Instead, she says she paid family members their expenses for supporting her, usually in cash that she had withdrawn from her account. She says she does not have receipts for these payments.
29. I do not consider the wording in the support plan was so unclear as to allow Mrs X to have interpreted it in the way she did.
30. £2500 was deposited into the account on 18 March 2021. Mrs X’s weekly personal budget was £189. The Council’s records (taken from her direct payment account) show that in the first week Mrs X spent £466.93 in various shops as well as transferring £2000 into her personal account.
31. Six days later, on 24 March 2021, Mrs X attempted to use the Card in the fast-food outlet. The same day she was told by the social worker why this was not allowed. The case notes record he social worker also clarified what the money could and could not be used for and the money would have to be repaid.
32. I believe this timeline is relevant in this case. Even if there had been lack of clarity on Mrs X’s part in terms of the scheme, this was rectified by the Council within a week. The deposited funds should have funded approximately 13 weeks of care. Instead, they were spent within a week.
33. I recognise that Mrs X cannot recall receiving and signing the agreement, but I am satisfied she had received it by the fact it was returned to the Council with her signature and additional comment.
34. It is unfortunate the Council did not act on this comment. It should have alerted the Council to Mrs X’s possible misunderstanding about the scheme and prompted a discussion with her about the limitations around using direct payment to pay for family members. In its response to my enquiry about this, the Council accepted this was not registered by the officer who received the document. This was fault.
35. I must consider what, if any, injustice arose from this fault. It is reasonable for me to assume, on balance, that Mrs X would have been clearer about the Council’s expectations. It is possible that she may not have used the direct payments in the way she did, although I cannot be certain about this. However, this uncertainty is limited to the employing of family members. It does not extend further to the other aspects of Mrs X’s expenditure and is reflected in my recommendation below.
36. However, I cannot ignore the fact Mrs X signed the agreement that made it clear the accounts would be audited, receipts would need to be kept and the direct payments should only be spent on services specified in the Plan. I must also take into consideration there is a responsibility on recipients of public funds to use them for their intended purpose.
37. Overall, I am satisfied there is sufficient evidence to persuade me that Mrs X was made aware of the obligations that went alongside receiving direct payments. And so the Council is entitled, because of its obligation to the public purse, to recoup the misspent direct payments.
38. The Council has already implemented services improvements. I do not consider this is evidence the Council accepted it acted with significant fault in this case, as suggested by Mrs X. There is no obligation in the relevant government guidance for a support worker to go through the agreement with clients. Instead, it is a sensible attempt to avoid possible ambiguity in the future and is welcomed by the Ombudsman.

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Agreed action

39. Within four weeks from the date of my final decision, the Council has agreed to take the following action:
1. Apologise to Mrs X for its failure to respond to the handwritten note on the agreement.
2. Reduce the amount owed by Mrs X by £250. This is a symbolic reduction to reflect the uncertainty around employing family members, explained at paragraph 35 above.
40. The Council should provide us with evidence it has complied with the above actions.

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Final decision

41. I have found the Council to have acted with fault and the Council has agreed to remedy the injustice caused.

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Investigator's decision on behalf of the Ombudsman