Summary: Mr X complained the Council’s overpayment of fostering allowance has caused his family stress, anxiety and inconvenience. The Council has accepted it was at fault, and has offered a financial remedy to Mr X. We consider this remedies Mr X’s injustice.

The complaint

1. Mr X complained that the Council overpaid his fostering allowance for 11 months.
2. He said this mistake has resulted in:
• him taking out a loan to pay the money back which has caused financial hardship; and
• inconvenience, stress and anxiety for his family.

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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 an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. 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

5. I have considered Mr X’s complaint and information provided by Mr X and the Council.
6. I have spoken with Mr X and the Council to gain clarity about the complaint.
7. I have written to Mr X and the Council with my draft decision and considered their comments

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What I found

8. Mr X and his partner Mr Y became special guardians for Child W in January 2017. Before this time, they had been Child W’s foster carers.
9. Between February 2017 and January 2018, Mr X and Mr Y received overpayments on their weekly fostering allowance from the Council to an amount totalling £14,231.
10. Mr X said he contacted the Council on several occasions when he noticed the large payments going into their account. I have seen evidence that Mr X and Mr Y contacted the Council and asked for a breakdown of the allowance payments so they could reconcile their accounts.
11. The Council did not respond. Mr X said they assumed everything was in order when the Council did not respond. Mr X complained that poor communication from the Council had allowed the overpayments to escalate.

Repayment of the overpayments

12. On 1 March 2018, the Council wrote to Mr X. It confirmed the Council had accidentally made an overpayment in Foster Care Allowance and Skills Allowance for W. It explained the overpayment was due to an administrative error. This was because it had continued to pay Mr X Foster and Skills Allowance as well as Special Guardianship and Skills Allowance. The Council’s letter asked Mr X to contact the Council to discuss his preferred method of repayment.
13. In response to the letter, Mr X emailed the Council on 6 March about the overpayments. He complained the Council did not respond to his emails dating back from March 2017 when he first noticed the overpayments. He also asked for a detailed statement to show all the payments made by the Council since January 2017. He did not ask about a repayment plan or methods of payment.
14. Mr X said he took out a loan to repay the full amount on 7 March.
15. The Council responded to Mr X’s email on 13 March. It attached the requested statement, highlighting the payments made in error. It asked Mr X to contact the Council to discuss a payment plan.
16. Mr X contacted the Council again on 15 March. He asked for clarification regarding some of the payments.
17. On 27 April, the Council responded. It asked Mr X to contact the Council to make a repayment arrangement. It offered a regular amount of £240 per week. Mr X responded the same day stating he did not want to pay it back in instalments.
18. On 4 May, Mr X asked the Council what it meant when it asked him to make an offer of payment. The Council replied stating that ideally it would like the payment to be paid in full but due to the circumstances and the amount of the overpayment the Council would accept a reasonable weekly payment arrangement. It said the amount would be the same i.e. no cost or interest would be added but it would take longer for him to clear.
19. On the same day, Mr X responded. He explained he would be paying it off in one go. He added that he should be paying it back in weekly instalments, but he did not want a debt hanging over him.
20. On 8 May 2018, Mr X paid the full amount back to the Council.

Mr X’s complaint

21. Mr X complained the loan repayments and interest have caused his family financial and emotional hardship. He wanted the Council to take some responsibility and to pay compensation for the inconvenience, stress and anxiety the situation had caused him and his family. In addition, he wanted the Council to take some financial responsibility. He wanted it to pay the interest on the loan repayments to put his family back in the situation they would have been if it were not for the fault.
22. The Council wrote to Mr X to apologise for its mistake and offered £250 for the inconvenience. Mr X said this was not proportionate to the level of stress and worry the mistake had caused.
23. In response to my enquiries, the Council carried out further investigations and reviewed its offer to Mr X. It said it could understand that Mr X may have felt it was important to settle the overpayment in one lump sum and may have incurred interest costs in doing so. The Council also acknowledged the distress caused to the family by what was, originally, the Council’s error. It offered an increased ex-gratia payment of £1500 to remedy the family’s injustice.

My findings

24. The Council has acknowledged it was at fault for making the overpayments. It has offered Mr X a payment of £1500 in recognition of the inconvenience his family experienced. I have viewed this offer as a remedy for the inconvenience, stress and anxiety caused to Mr X and his family.
25. Although the Council acknowledges its mistake for making overpayments, it has provided evidence that it offered Mr X the option to make the payments in instalments. He could have done this instead of taking out a loan.
26. I have seen an email which showed that Mr X refused this offer, stating he wanted to pay it all at once. This means that the decision to get a loan – with its accompanying interest – was Mr X’s.
27. Mr X commented on my draft decision. He said the dates of the Council’s correspondence are significant. He said he took out the loan in early March and the Council did not offer a repayment plan until May 2018. Emails between Mr X and the Council dated March and April 2018 show the Council offered a payment plan. Mr X took out a loan the day after he sent the Council an email asking for clarification. He did this before he received the Council’s response.
28. Given the above, I consider the Council’s offer of £1500 and an apology – for the inconvenience and stress caused – to be satisfactory.

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Agreed actions

29. The Council has agreed to apologise to Mr X for overpaying his fostering allowance for 11 months.
30. The Council has also agreed to make a payment of £1500 to Mr X to recognise his inconvenience and stress.
31. These actions should be completed within six weeks of my final decision statement.

Final decision

32. The Council was at fault for overpaying Mr X’s fostering allowance. The agreed actions remedy Mr X’s injustice. I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman