Summary: Ms X complains the Council has failed to deal properly with her direct payments. The Council was at fault over the handling of Ms X’s direct payments. This left her out of pocket and pursuing her concerns for a long time without success. The Council needs to apologise, refund the money owed to Ms X and make a symbolic payment for the distress and time and trouble she has been put to.

The complaint

1. The complainant, whom I shall refer to as Ms X, complains the Council has failed to deal properly with her direct payments by:
• failing to refund her for riding lessons and transport she paid for herself and losing her receipts;
• continuing to collect her assessed charge despite her making little use of the direct payments;
• failing to refund any money to her after closing her direct payment account; and
• failing to deal properly with her complaints.

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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, sections 30(1B) and 34H(i), as amended)
4. We investigate complaints about councils and certain other bodies. Where an individual, organisation or private company is providing services on behalf of a council, we can investigate complaints about the actions of these providers. (Local Government Act 1974, section 25(7), as amended?

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How I considered this complaint

5. I have:
• considered the complaint and the documents provided by Ms X;
• discussed the complaint with Ms X;
• considered the comments and documents the Council and Herefordshire and Worcestershire Health and Care Trust (HWHCT) have provided;
• considered the Ombudsman’s guidance on remedies; and
• invited comments on a draft of this statement from Ms X, the Council and HWHCT, for me to consider before making my final decision.

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What I found

What happened

6. During 2018 and 2019, HWHCT delivered some social care functions on behalf of the Council.
7. Ms X has mental health problems. Her May 2018 care plan included a personal budget of £117.19 a week. She received this as a direct payment. Her care plan said £30 was for riding lessons (they actually cost £35) and £80 to pay for taxis to/from the stables and her voluntary work there. In July HWHCT amended her care plan to say she could also spend the direct payment on horse riding equipment “as long as within the balance of her account”. Ms X was assessed to contribute £46.80 a week towards her personal budget.
8. In August Ms X provided the Council with receipts for five riding lessons (£175) and seven return taxi journeys (£280).
9. On 31 August the Council refunded Ms X for £326.29. There is nothing to explain why it did not refund the full amount (£355).
10. Around the end of December the stables closed and did not reopen until late April 2019. According to HWHCT’s records, the Council put a temporary stop on Ms X’s direct payment account during this time.
11. In May HWHCT asked the Council how to reinstate the direct payments. It said Ms X had paid some of her assessed charges while the account had been on hold and asked how she could get this returned. The Council said Ms X could now use the account again. It suggested Ms X withhold her payments until she had recouped the money she had paid in while the account had been on hold. HWHCT passed the information on to Ms X.
12. HWHCT’s records show Ms X continued to visit the stables from late April. However, the first payment for riding lessons from the direct payment account was not made until 6 June (following a gap since mid-February).
13. HWHCT updated Ms X’s care plan in June 2019. Her personal budget remained £117.19 a week. The care plan said she could use the money to pay for two riding lessons a week (£35 each) and equipment for horse riding. It said she no longer needed money for taxis, as she was driving her own car. Ms X was assessed to contribute £47.92 a week towards her personal budget.
14. In August HWHCT reviewed Ms X’s direct payment with her. They discussed the possibility of her claiming money back for a second riding lesson she had been paying for each week since the end of June. Ms X agreed to get copies of her bank statements and to ask the riding school to provide receipts for the extra riding lessons.
15. On 15 August, Ms X gave HWHCT a folder which contained bank statements and receipts from the riding school.
16. On 29 August Ms X asked if her bank statements would be returned to her.
17. On 2 October HWHCT told Ms X:
• riding lessons were a “therapeutic need” not a social care need, so she would have to pay for them herself;
• her direct payment would end on 25 October and all contributions/deductions would end; and
• the surplus in the direct payment account would be split between her and the Council.
18. However, later in October HWHCT told Ms X the Council would reclaim all the unspent money in the account.
19. According to the Council’s records for Ms X’s direct payment account:
• it paid money into the account every four weeks (in advance);
• Ms X paid her assessed contribution weekly;
• its final payment into the account was on 8 October 2019;
• Ms X paid her assessed contribution into the account on 11, 18 and 25 October, and 1 and 8 November 2019;
• the last spending from the account was on 28 October 2019 (£70 for riding lessons);
• Ms X spent £918.26 in October, largely on riding equipment;
• during the time the account was active, Ms X paid £2,460.48 into it and spent £5,370.69; and
• there was £1,850.12 in the account when it was closed.
20. HWHCT visited Ms X on 7 November and questioned her spending on riding equipment. She pointed out this had been agreed.
21. In December Ms X told HWHCT she had provided receipts totalling £315 to her social worker when they met several months ago. Ms X says she later provided the original receipts to another social worker but heard mothing further. By this time, the social workers were no longer working for HWHCT.
22. According to HWHCT’s records, Ms X had been asked to provide bank statements directly to the Council, so it could refund any money owed to her, less spending on riding equipment. Ms X had provided bank statements but it could not say whether they were originals or copies, as they had been scanned on to its electronic system.
23. Ms X asked HWHCT about the receipts and her direct payments again in January 2020.
24. In May HWHCT e-mailed the Council about the failure to refund Ms X. It noted the Council had agreed in April to audit her direct payments. The Council confirmed it would look into the matter but could not put a timescale on resolving it.
25. In July Ms X told HWHCT she had never had any response to her concerns about the handling of her personal budget. She said she did not understand why it had been stopped, what she could spend the money on or why the Council had recently taken £178.93 from the direct payment account.
26. HWHCT wrote to the Council about the direct payments but also suggested Ms X write to it herself.
27. Ms X complained to the Council in August 2020 about its handling of her direct payments between May 2018 and August 2020, including:
• the failure to split the surplus in the direct payment account between her and the Council;
• having to deal with four different social workers who never completed anything they agreed to do;
• why the Council removed £178.93 from her direct payment account in April 2020 without notice or explanation;
• that money she had paid directly to the stables in cash was not refunded to her but paid into the Council’s own account.
28. The Council invited HWHCT to address elements of her complaint.
29. When HWHCT wrote to Ms X in November, it said:
• there had been confusion over her direct payments due to changes in personnel;
• receipts she provided in August 2019 went missing and were not passed on to the next social worker;
• duplicate receipts went missing, after she provided them to the next social worker, who was only in post for a short time;
• the next social worker contacted the Council about her direct payments, but left before receiving a response;
• it offered to reassess her needs under the Care Act, pending the outcome of the Council’s investigation into her direct payment problems;
• in May 2018 HWHCT encouraged her to apply for direct payments and said she could use them for “therapeutic purposes”, namely horse-riding activities;
• her direct payment had been set up to fund transport to a voluntary job and to pay for riding lessons once a week;
• riding lessons were an appropriate use of the direct payments, but petrol for her own car was not;
• Ms X’s care and support plan said she could use any excess money in her direct payment account to pay for riding equipment, but this would not normally be agreed as an appropriate use of a direct payment; and
• it apologised for the conflicting and incorrect information it had provided to her and the distress this caused.
30. In October 2021 the Council told Ms X:
• “Direct Payment is funds for a specific purpose and time span, if they are not used then they should be returned to WCC. Client contribution is spent first before funds from WCC, it’s not a case of percent funds. For example, £100 DP budget, £80 from WCC, £20 of client contribution – amount spent £90. The first £20 will be from client contribution and then the remaining £70 from WCC and the remaining £10 in the account will be due back to WCC”.
31. Ms X asked the Council to escalate her complaint to stage 2 of its complaints procedure. In September 2022, the Council referred her to what it had told her in October 2021. It said no purpose would be served by a stage 2 complaint investigation and told her she could complain to the Ombudsman.
32. The Council says it does not “collect” the assessed contributions from people receiving direct payments. It says it is the individual’s responsibility to pay it into their account and stop the payment when necessary.

Is there evidence of fault by the Council which caused injustice?

33. The evidence shows Ms X spent £355 of her own money around the time the direct payment account was set up in 2018. There is nothing to explain why the Council repaid £326.29, rather than £355. That was fault by the Council and means it owes her a further £28.71.
34. The evidence does not support the claim Ms X was paying more into the direct payment account than she was spending from it. Therefore, the Council was not at fault for taking all the unspent money when it closed the direct payment account. HWHCT should not have told her the unspent money would be shared between her and the Council. However, it corrected that error shortly after making it.
35. Ms X continued to pay money into her direct payment account after 25 October. The Council should have repaid that money to her (£95.84). The failure to do so was fault by the Council.
36. There is no dispute over the fact HWHCT lost Ms X’s bank statements and receipts. It had access to digital copies of the statements but never took any action over them. Despite accepting its fault, it failed to address the implication this had for Ms X. This prevented her from receiving the money she was entitled to receive (£315). That was fault for which the Council is accountable.

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Agreed action

37. When a council commissions another organisation to provide services on its behalf it remains responsible for those services and for the actions of the organisation providing them. So, although I found fault with the actions of HWHCT and the Council, I have only made recommendations to the Council.
38. I recommended the Council within four weeks:
• writes to Ms X apologising for the problems she experienced with her direct payments, including the loss of her documents and the failure to ensure she received a refund; and
• refunds £440 to her and pays £150 for the avoidable distress she has been caused.

The Council has agreed to do this. It should provide us with evidence it has complied with the above actions.

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Final decision

39. I have completed my investigation on the basis there has been fault causing injustice which requires a remedy.

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Investigator's decision on behalf of the Ombudsman