Summary: Mrs X complained about the Council failure to advise her about her obligations under the direct payments scheme. We did not find the Council to be at fault because Mrs X signed an agreement that explained her responsibilities as an employer and to provide an audit trail. In the absence of any evidence to show how public finds were spent, the Council was entitled to request its return.

The complaint

1. Mrs X complains about the Council’s decision ask her to repay direct payments she paid in cash to carers. She says it is unfair because she was not told she was unable to do so.
2. She says this has caused distress and affected her physical and mental health.

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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. 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 significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. 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

5. I considered evidence provided by Mrs X and the Council as well as relevant law, policy and guidance.
6. Mrs X and the Council had an opportunity to comment on my draft decision. I considered any comments before making a final decision.

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What I found

Relevant law and Council policy

Care and support plans

7. The Care Act 2014 gives councils a legal responsibility to provide a care and support plan (or a support plan for a carer). The care and support plan should consider what needs the person has, what they want to achieve, what they can do by themselves or with existing support and what care and support may be available in the local area. 

Direct payments

8. Direct payments are monetary payments made to individuals who ask for one to meet some or all their eligible care and support needs. They provide independence, choice, and control by enabling people to commission their own care and support to meet their eligible needs.

The Council’s direct payment agreement

9. The agreement (signed by Mrs X in March 2022) contained the following obligations.

• The direct payment recipient must operate the direct payment from a separate bank account that is to be used only for transactions in respect of the direct payment…money must not be transferred into any other account without the agreement of the Council.
• The direct payment recipient must provide a summary of income received and expenditure incurred. This information will be supplied in a format requested by the Council.

The Council’s direct payments leaflet

10. This explained how the Council’s scheme works and contained the following relevant information.

• A pre-paid card account will be opened.
• Money is paid into the account every four weeks in advance.
• The pre-paid card can be used to set out direct debits or make bank transfers. The card cannot be used to withdraw cash.
• The recipient has several responsibilities as an employer, including employer’s liability insurance and checking someone is legally able to work in the UK.

What happened

11. Below is a summary of the key events leading to this investigation. It is not an exhaustive chronology of every exchange between parties. Where necessary, I have expanded on some of these events in the “Analysis” section of this decision statement.
12. Mrs X has care and support needs. For several years, she received support for her daily care needs, funded by a direct payment. The administration of the direct payment was managed by an independent agency (the Agency). Mrs X used the direct payment to pay for a carer.
13. In March 2022, Mrs X signed a direct payment agreement.
14. Management of her direct payment was discussed at a review of Mrs X’s care and support plan in April 2022. Because Mrs X only employed one person, the social worker suggested she could manage the direct payments herself, rather than incur the Agency’s costs. She was told money would be paid into an account and this would be accessed by a debit card.
15. Her social worker sent a leaflet confirming details of the scheme. Mrs X was asked to provide information, including her passport and insurance details.
16. Mrs X was twice admitted to hospital in May and June 2022. Mrs X says she was confused during this time because of her poor state of health.
17. The direct payment account was set up in June 2022. Soon afterwards, Mrs X’s long-term carer resigned. Mrs X struggled to find a replacement. She decided to put an advert on a local notice board. From this, she recruited two carers who provided care over a period of approximately five months between December 2022 and April 2023. Due to the carers’ personal circumstances, Mrs X paid them in cash. She says her son transferred funds from the direct payment account into his personal account and sometimes used his own money in the first instance. She did not keep any receipts or invoices about the money that was paid to the carers. Nor did she have any contact details or surname for the carers.
18. In October 2023, the Council became aware of this arrangement and suspended Mrs X’s direct payments. She was asked to provide evidence of how the direct payments had been spent. Mrs X was unable to do so.
19. The Council asked Mrs X to repay £3000. Mrs X complained to the Council about this. She says she should not be asked to pay repay this money that she had legitimately spent on meeting her care and support needs. She says she was not told she was not allowed to pay carers in cash. Although she had signed an agreement that set out her responsibilities as an employer, she was unwell at the time and had no recollection of signing such an agreement or being told about her legal responsibilities.

The Council’s position

20. In response to both Mrs X’s complaint and the Ombudsman’s enquiries, the Council’s position is as follows.

• Mrs X signed an agreement In March 2022 that set out her responsibilities as an employer and the restriction on making cash payments.
• Despite several requests by the Council, Mrs X was unable to provide any evidence as to how the direct payments were spent. The only information she was able to provide were the first names of the two carers and how much they were paid in cash.
• If Mrs X can provide evidence to prove direct payments were used for their intended purpose, the debt will be reviewed

Analysis

21. It was not fault by the Council to require the Mrs X to provide evidence of how she spent her direct payments. The agreement signed by Mrs X in March 2022 clearly set out the consequences of failing to provide the requested information. Mrs X making cash payments with no supporting documentation was a clear beach of this agreement.
22. Mrs X’s case records confirm she was suffering with ill health between April and June 2022 and was hospitalised during this time. This contributed towards the delay in setting up the direct payment until July 2022. I am not persuaded this period of ill health absolved Mrs X of her responsibilities under the Council’s direct payments scheme.
23. I say this for the following reasons.

• Mrs X had already been a direct payment user for several years. Although she received support from the Agency in doing so, I am satisfied she would have been familiar with her responsibilities as an employer and the need for an audit trail.
• Mrs X was sent a leaflet that set out her obligations under the scheme in March 2022.
• She signed the direct payments agreement in March 2022. This was before she was hospitalised. There is no evidence to show Mrs X did not have capacity to understand what she was signing in March 2022.
• Mrs X was in regular contact with her social worker around this time about her care package. I can see no reason why Mrs X could not have raised any questions she may have had about the direct payment if she was unsure about her responsibilities.
• Mrs X demonstrated an awareness of restrictions of the scheme because she knew she was unable to employ her son without permission for the Council.

24. The Council has a duty to protect the public purse and its decision to recoup money is in line with that duty. The Council was not at fault.

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Final decision

25. I found no fault. The Council was entitled to seek recovery of direct payments in accordance with its policy.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman