Summary: Mr X complained about how the Council made a best interest decision for his brother, Mr Y, when it decided he did not have capacity to make decisions about his finances. The Council was at fault because it did not keep proper oversight when it referred Mr Y to a third-party financial appointee service. However, this did not cause any injustice. The Council will, however, review how it makes best interest decisions to prevent potential injustice to others who cannot manage their finances in future. The Council already apologised to Mr X for some wrong information it gave him when investigating his complaint, which is enough to remedy the injustice caused.

The complaint

1. Mr X complains about how the Council made decisions about the care and support needs of his brother, Mr Y, who has a learning disability and lives in independent living accommodation. Mr X says:
1. the Council failed to involve the family when it assessed his brother’s capacity to manage his finances in late 2022. It then made a best interest decision to arrange financial appointee services for his brother from a third party organisation that he considers were not suitable to carry out the role;
2. in 2024, he raised a safeguarding concern with the Council because he found out money had been withdrawn from a bank account his brother shared with his independent living co-tenants, without the family’s knowledge. He says the Council did not investigate this properly because it initially gave him wrong information about where the money had gone;
3. after the safeguarding investigation, the Council allowed the third party appointee service to resign from its role without notice, leaving his brother without support to manage his finances and benefits; and
4. the Council delayed in responding to his complaint about these issues.
2. Because of this Mr X says:
• although the withdrawn money was returned to his brother, the Council’s failure to properly investigate the safeguarding concern caused Mr X distress and frustration; and
• his brother’s benefits stopped for four months after the third party appointee service resigned from its role. Although the benefits were reinstated and backdated, this caused distress and inconvenience to Mr X because he spent time and trouble resolving the benefits issues.
3. Mr X wants the Council to:
• address the issues with individual staff who were responsible for the faults, and ensure it holds staff accountable;
• end its relationship with the third party appointee service so it no longer uses this company as an appointee for other people; and
• review how it manages its contracts with all third party appointee services so they cannot resign without notice, to prevent issues for others in future.

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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 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)
5. We may investigate complaints from the person affected by the complaint issues, or from someone else if they have given their consent. If the person affected cannot give their consent, we may investigate a complaint from a person we decide is a suitable representative. (section 26A or 34C, Local Government Act 1974)
6. 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

7. I considered evidence provided by Mr X and the Council, and relevant law, policy and guidance.
8. Mr 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

Legislation and guidance

Mental capacity and best interest decisions

9. The Mental Capacity Act 2005 is the framework for acting and deciding for people who lack the mental capacity to make particular decisions for themselves. The Act (and the Code of Practice 2007) describes the steps a person should take when dealing with someone who may lack capacity to make decisions for themselves. It describes when to assess a person’s capacity to make a decision, how to do this, and how to make a decision on behalf of somebody who cannot do so.
10. The council must assess someone’s ability to make a decision when that person’s capacity is in doubt. How it assesses capacity may vary depending on the complexity of the decision.
11. A key principle of the Mental Capacity Act 2005 is that any act done for, or any decision made on behalf of a person who lacks capacity must be in that person’s best interests. The decision maker also has to consider if there is a less restrictive choice available that can achieve the same outcome. Section 4 of the Act provides a checklist of steps decision makers must follow to determine what is in a person’s best interests.
12. The Court of Protection deals with decision-making for adults who may lack capacity to make specific decisions for themselves. The Court of Protection may need to become involved in difficult cases or cases where there is disagreement which cannot be resolved in any other way. The Court of Protection can:

• decide whether a person has capacity to make a particular decision for themselves;
• make declarations, decisions or orders on financial or welfare matters affecting people who lack capacity to make such decisions; and
• appoint deputies to make decisions for people lacking capacity to make those decisions.

Appointee for benefits

13. The Department for Work and Pensions (DWP) allows people to apply for the right to deal with the benefits of someone who cannot manage their own affairs because they are mentally incapable or severely disabled. This is called an ‘appointee’. A benefits appointee can be an individual such as a friend or relative, or an organisation such as a solicitor or council.

Assessment of needs

14. Sections 9 and 10 of the Care Act 2014 require councils to carry out an assessment for any adult with an appearance of need for care and support. The assessment must be of the adult’s needs and how they impact on their wellbeing and the results they want to achieve. It must also involve the individual and where suitable their carer or any other person they might want involved.
15. The Care and Support Statutory Guidance says where someone has substantial difficulty in being fully involved in their care planning or lacks capacity to agree and consent to the care plan, they may be supported by family members or friends. If they have no family or friend who is available and willing to support them, the Council must appoint an independent advocate.

Safeguarding

16. A council must make enquiries if it thinks a person may be at risk of abuse or neglect and has care and support needs which mean the person cannot protect themselves. An enquiry is the action taken by a council in response to a concern about abuse or neglect. An enquiry could range from a conversation with the person who is the subject of the concern, to a more formal multi-agency arrangement. A council must also decide whether it or another person or agency should take any action to protect the person from abuse. (section 42, Care Act 2014)

What happened

17. Mr Y has a learning disability. Up to 2022 he had lived with the same co-tenants in independent living accommodation, managed by Care Provider A, for many years. The co-tenants were friends and had a shared bank account. Care Provider A had supported Mr Y and his co-tenants to manage their finances, including claiming benefits from the Department of Work and Pensions (DWP). Mr Y’s parents were also involved in helping him with his money management and decision making. Mr X was not involved in his brother’s care or finances.
18. In late 2022, Care Provider A told the Council it no longer wanted to support Mr Y with his finances because it had decided this was a conflict of interest. The Council therefore carried out a mental capacity assessment (MCA). It decided Mr Y did not have capacity to understand or manage his finances. It decided it was in Mr Y’s best interest to refer him to a third-party financial appointee service, Organisation Z, for support. The Council accepts it wrongly recorded Mr Y did not have any family actively involved, so failed to consult his parents about this best interest decision. Organisation Z began supporting Mr Y to manage his money and applied to DWP to act as his appointee for benefits. DWP approved this, which meant Organisation Z had authority to deal with DWP on Mr Y’s behalf in managing his benefits claim, and managed the account DWP paid his benefits into.
19. Towards the end of 2023, Care Provider A stopped managing Mr Y’s accommodation and was replaced by a new provider. After this changeover, Mr Y’s family became aware Organisation Z had been supporting him with his finances for nearly a year without their knowledge, instead of Care Provider A. Around the same time, one of Mr Y’s co-tenants moved out and another sadly died. I will refer to the co-tenants as:
• Co-tenant P, who had moved out, and was supported to manage their money by someone known to them, who I will call Q.
• Co-tenant L, who had died, and had a solicitor in place to manage their estate.
20. Q withdrew a large sum of money from the co-tenants’ shared bank account to protect Co-tenant P’s financial interests. Soon after, Q realised they had withdrawn more than Co-tenant P’s share, because they had not known money was owed to Co-tenant L’s estate. Q knew Mr Y’s family so explained their mistake and told the family they were working with Co-tenant L’s solicitor and Organisation Z to resolve the issue.
21. Mr X first contacted the Council in March 2024. He said:
• Organisation Z had been supporting Mr Y without the family’s knowledge and now would not share information with the family about Mr Y’s finances; and
• a large sum of money had been removed from the bank account Mr Y shared with his co-tenants. Mr X said he was not sure who had been managing the bank account and was concerned about this.
22. In April 2024 the Council told Mr X Organisation Z had said issues with the shared bank account were now resolved. Mr X disputed this and told the Council Organisation Z had not explained how a third party had been able to withdraw money from the account. He asked the Council to serve notice to Organisation Z to end its support of his brother so the family could apply for deputyship and take control of his finances. The Council then told Mr X:
• it realised it had failed to involve Mr Y’s family when carrying out the 2022 capacity assessment and deciding he needed support from a third-party appointee service. The Council apologised for not consulting Mr Y’s parents about this assessment;
• Organisation Z had told the Council a solicitor acting for one of Mr Y’s co-tenants had withdrawn the funds from the shared account; and
• the Council did not need to serve notice to Organisation Z on Mr Y’s behalf. Instead, Mr X could apply to the Court of Protection for deputyship, and once he received a court order, supply this to Organisation Z and it would resign its responsibilities.
23. Mr X continued to dispute what Organisation Z had reported to the Council. He said it had had not been transparent with the family about Mr Y’s finances and had falsely told the Council a solicitor withdrew the funds from the shared account. The Council told Mr X to raise a safeguarding concern if he had concerns about how Organisation Z had managed his brother’s money, which he did in June 2024. The Council decided the threshold for a safeguarding enquiry was met and began its investigation.
24. In September 2024, the Council finished its safeguarding investigation. The Council:
• found the shared account funds were not withdrawn by a solicitor, but by Q instead. Through conversations with Q and Organisation Z, and scrutiny of account information provided by Organisation Z, it decided it was satisfied Mr Y had been returned all money he was due;
• said there was no evidence of financial mismanagement by Organisation Z on checking Mr Y’s account information;
• arranged a new mental capacity assessment in early-September 2024. It decided Mr Y did not have capacity to understand or manage his finances, and it was in his best interest for his siblings (including Mr X) to support him with this. In line with Mr X’s wishes, the Council shared this decision with Organisation Z and asked it to resign from its role with DWP so Mr X could take over. Organisation Z agreed to do this; and
• decided it should take no further action as there was no evidence of financial abuse and no future risks to Mr Y.
25. While the safeguarding enquiry was ongoing, Mr X had continued to contact the Council to complain and say he wanted Organisation Z removed from its role. The Council repeatedly explained Mr X should contact DWP directly if he wanted to replace Organisation Z as Mr Y’s benefits appointee. In September 2024, just before the safeguarding outcome, Mr X asked the Council to contact DWP to explain the situation because he said it would not speak to Mr X about Mr Y’s benefits account. After the safeguarding outcome, the Council updated DWP of the situation and provided it with contact details for Organisation Z and Mr X to process the handover. Organisation Z also contacted DWP separately and resigned from its role as Mr Y’s benefits appointee.
26. In October 2024, Mr X complained to the Council. He said now Organisation Z had resigned from its role, DWP had stopped his brother’s benefits because it could no longer pay this to the account managed by Organisation Z. Mr X said the Council should have prevented this by managing the handover with DWP.
27. In November 2024 the Council issued a complaint response which said:
• it accepted it was at fault in how it carried out the original 2022 capacity assessment because it did not involve Mr Y’s family, and apologised for this again. It said it would remind staff to check with families in future or ensure an independent advocate is in place where no family is involved. It also explained, “[Mr Y] had the cost of [Organisation Z] off-set against his client charge; therefore, he has not paid additional costs whilst [Organisation Z] was acting for him”;
• it had no control over how DWP had managed the handover between benefits appointees and Mr X should complain to DWP about this instead;
• the Council’s investigation had found Organisation Z could not have taken funds from the shared account because it only had access to Mr Y’s separate personal account which his benefits were paid into. The Council had found a solicitor acting for one of Mr Y’s co-tenants removed the money, but this had now been returned. Therefore, there was no further safeguarding action to take; and
• it would review whether it should have more formal contractual arrangements in place with third party appointee services which it directs people to.
28. Following further correspondence from Mr X, the Council issued a further complaint response in December 2024. This recognised its previous letter had mistakenly said a solicitor withdrew money from the shared account, when in fact this was Q acting for co-tenant P. The Council apologised for this error. However, it explained this did not change its safeguarding decision of no financial abuse or mismanagement by Organisation Z.
29. We began our investigation in December 2024. In January 2025, Mr X resolved the benefits issues with DWP and it reinstated Mr Y’s benefits, with missed payments backdated.

Time period investigated

30. The law says where someone may lack capacity to make decisions, and a suitable representative complains on their behalf, the Ombudsman has discretion to decide what period we should investigate. Mr X came to the Ombudsman in November 2024. I decided I should investigate what happened from mid-2022 onwards because:
• I needed to look back this far to make sense of what has happened and investigate more recent events; and
• Mr X did not become aware of the issues he complains about until late 2023/ early 2024 when he became involved with Mr Y’s care and finances. At this point he had concerns about how Organisation Z had been managing his brother’s finances since late 2022. Mr X then raised his concerns with the Council about Organisation Z without delay. This led to the safeguarding investigation and complaint. The Council completed the safeguarding investigation in September 2024, then the complaint in late 2024, at which point Mr X came to the Ombudsman. Mr X did not delay in bringing his complaint to us.

My findings

Decision to refer Mr Y to Organisation Z

31. Mr X says Organisation Z was not suitable to support Mr Y with his money because it is not regulated by the Financial Conduct Authority (FCA). He wants the Council to end its relationship with Organisation Z, so it no longer directs people to its services. The Ombudsman cannot direct the Council to end relationships it has with third party organisations. Also, there is no requirement for the Council to ensure such an organisation is regulated by the FCA before it directs people to its services. Organisation Z was not undertaking financial activities for Mr Y of the type which are subject to FCA regulation. In terms of Organisation Z’s role as Mr Y’s DWP appointee, approval of Organisation Z for this role was a DWP decision outside the Council’s control. However, I did consider whether there was fault in how the Council considered its decision to direct Mr Y to Organisation Z.
32. When the Council decided it was in Mr Y’s best interest to refer him to Organisation Z, it should have fully considered the implications of this for him. The Council said it did not have any contractual relationship with Organisation Z, and did not commission the appointee support. Instead, Mr Y had a contract directly with Organisation Z. From the Council’s records, and its response to my enquiries, it was unclear:
• why the Council decided Mr Y needed support to manage his finances, but did not consider this to be an eligible need under the Care Act 2014 which it should arrange to meet for him, by commissioning an appointee; and
• how Mr Y, who the Council decided did not have capacity to understand or manage his finances, entered a contract with Organisation Z without the support of the Council, or anyone else in place to make financial decisions for him.
33. The Council’s failure to keep proper records of its decision making, or ensure proper oversight when referring someone without capacity to a third-party appointee, was fault.
34. It is clear Mr Y needed an appointee, whether Organisation Z or otherwise. Therefore, I considered whether Mr Y experienced any injustice because of the referral to Organisation Z. If the Council had involved his parents, it may be the family would have decided to manage his finances for him rather than involve a third-party organisation which charges for its services. I asked the Council whether it funded the support Mr Y received from Organisation Z, or whether he paid for this himself, to decide if he may have experienced a financial loss. I considered evidence provided by the Council about how it assessed Mr Y’s financial contribution to his care costs and can see it disregarded the cost of Organisation Z as an essential expenditure. This means the Council assessed Mr Y so the contract with Organisation Z would make no difference to him financially. If he had not been paying for its services, the Council would have included that money as part of his assessed income which would have meant he contributed more to his care costs. Therefore, the Council took steps to ensure the arrangement with Organisation Z would not cause Mr Y any financial loss.
35. In responding to Mr X’s complaint, the Council accepted it was at fault for not involving Mr Y’s parents in the late-2022 mental capacity assessment and best interest decision. It apologised and said it had issued reminders to relevant staff about what process the Council should follow in these circumstances. I decided this was suitable to remedy the confusion caused by the fault.
36. However, the Council should address its lack of oversight about referrals to third party appointee services, to prevent future injustice in other cases. In response to Mr X’s complaint, the Council said it would review whether it should have more formal contractual arrangements in place with appointee services which it directs people to. I welcome this action by the Council and have made a recommendation based on this.

Safeguarding investigation

37. The Ombudsman is not an appeal body for safeguarding decisions. We do not reinvestigate safeguarding concerns, make decisions about whether financial abuse occurred, or make judgments about whether we agree with the outcome of a safeguarding investigation. If a council follows the corrects processes in making a decision and considers all the information it should have, we cannot question or criticise the decision itself. We only look at how the council reached the decision, and the process followed.
38. Where we find fault with a safeguarding investigation, we may decide a council needs to investigate again, but only if we decide:
• the fault identified causes doubt about the outcome of the safeguarding investigation; and
• there is value in the council carrying out a fresh investigation retrospectively. Safeguarding investigations are carried out to prevent harm or abuse occurring to an individual. We would usually only recommend a safeguarding investigation be carried out again if there was a benefit to doing so in preventing future harm or abuse.
39. When I spoke to Mr X, he agreed with the Council’s position that the money withdrawn from the shared account was returned so the Council does not need to reinvestigate this issue. However, he said the Council did not carry out its safeguarding investigation properly because it initially gave him wrong information about where the money had gone. He believes Organisation Z lied to the Council about who had withdrawn the money, and the Council then lied to him about it.
40. I cannot comment on the actions of Organisation Z, as it is not a body we investigate. I can only comment on the actions of the Council. Before Mr X raised a safeguarding concern, the Council initially told him Organisation Z had reported the money was withdrawn from the shared account by a solicitor. I found no suggestion the Council deliberately lied to Mr X about where the money had gone and can see no good reason it would have for doing so. It simply reported to Mr X information it had received from Organisation Z. Mr X then reported a safeguarding concern, so the Council investigated this further. It correctly found the funds were not withdrawn from the shared account by a solicitor, but by Q. It then spoke to Mr X in September 2024 who explained he already knew Q had withdrawn the money as they had told him this.
41. There was no fault in how the Council investigated the safeguarding concern. I also found Mr X may have contributed to the confusion in his actions. Mr X knew that Q, not Organisation Z, had withdrawn the money before he approached the Council and asked it to investigate, but did not provide clear information to the Council about this.

Resignation of Organisation Z leading to ending of benefits

42. Mr X repeatedly asked the Council to act to stop Organisation Z carrying out its appointee role for Mr Y. Once the Council had followed its processes by completing its safeguarding investigation and new mental capacity assessment/ best interest decision, it did as he asked and spoke to Organisation Z and DWP.
43. I agree with the Council’s position that it has no control over how DWP manages handovers between appointees and Mr X should complain to DWP about this.

Complaint handling

44. Mr X said the Council delayed in responding to his complaint about these issues. The Council’s procedure for complaints about adult social care services says it will respond to complaints within a maximum of six months. The Council responded within the timescale set out in its procedure. It was not at fault.
45. In November 2024 when issuing its first response to Mr X’s complaint, the Council wrongly said again the money was withdrawn by a solicitor, even though its safeguarding investigation had found otherwise. The Council gave Mr X wrong information, which was fault, and caused him frustration. However, any injustice caused was limited because Mr X already knew who had withdrawn the money. The Council then quickly corrected its mistake in its December 2024 second complaint response when questioned by Mr X. It apologised to Mr X for the error. I am satisfied this is enough to remedy the injustice caused.

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Action

46. Within three months of our decision, the Council will review how it makes best interest decisions where it has decided someone does not have capacity to understand or manage their finances. It will produce a dated action plan of any changes it decides are needed to its policies and processes. As part of the review, it will consider:
• how it can ensure it involves family members where appropriate, or an independent advocate if not;
• how it can ensure it properly records decisions to refer to a third-party financial appointee service. This includes reasons for referral to any particular organisation, and consideration of the financial implications of this for the service user;
• how it can ensure it properly supports service users without capacity to secure third-party appointee services, where they cannot enter into a contract themselves; and
• whether it should have more formal contractual arrangements in place with third-party appointee services it directs its service users without capacity to.
47. The Council will provide us with evidence it has complied with the above action.

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Decision

48. I find fault causing injustice, which the Council has already remedied. The Council agreed to my recommendations for further actions it should take to improve its services and prevent potential injustice to others in future.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman