Summary: The Council was not at fault for reducing Miss B’s special guardianship allowance, because its decision was in line with the Special Guardianship Regulations. However, it failed to properly consider the use of its discretionary powers. It has agreed to assess Miss B’s finances and decide whether her circumstances justify discretionary payments on top of her allowance.

The complaint

1. The complainant, whom I refer to as Miss B, is a special guardian for two children.
2. Miss B complains that the Council reduced her special guardianship allowance below what it had promised. She says this reduction has caused her financial hardship.

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The Ombudsman’s role and powers

3. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), 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)
5. Under the information sharing agreement between the Local Government and Social Care Ombudsman and the Office for Standards in Education, Children’s Services and Skills (Ofsted), we will share this decision with Ofsted.

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How I considered this complaint

6. I considered information from Miss B and the Council. I wrote to Miss B and the Council with my draft decision and considered their comments.

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What I found

What should have happened?

The Special Guardianship Regulations 2005

7. These Regulations set out the law which applies when councils are deciding financial support to special guardians.
8. Regulation 13 says a council, in deciding financial support, must take account of any other financial resources (including benefits) available to the guardian. The council must also consider the guardian’s reasonable outgoings.
9. Regulation 18 says councils must review each special guardian’s financial support arrangements at least annually.

Department for Education special guardianship guidance

10. This statutory guidance accompanies the Regulations and provides more detailed instructions to councils on how to provide support to special guardians.
11. The guidance says financial support paid under the Regulations cannot duplicate any other payment to the guardian in respect of the child.
12. The guidance also says that, in deciding financial support, councils should have regard to the fostering allowance it would pay if the child were fostered.

The Council’s special guardianship policy

13. This policy says that, when the Council first considers providing financial support to a special guardian, it may ask the guardian to complete a financial assessment form. It says this procedure “applies equally to a review of financial support.”

What happened?

14. Special guardianship orders (SGOs) were issued for the children Miss B looks after in 2016. The Council’s financial support agreements said Miss B would receive the Council’s fostering rate for both children, with deductions. Both said the Council would review Miss B’s allowance annually.
15. The Council made deductions to Miss B’s allowance equal to child benefit for both children.
16. In 2018 the Council warned people who received special guardianship allowances that it had not been making the right deductions to their payments, and this could mean changes to the payments at their next annual review.
17. The Council completed Miss B’s review in 2019. It said it should have been making deductions equal to the child tax credits she received for the children (as well as the child benefit deductions), but it had not done so. It said it would now be making the right deductions.
18. Miss B complained that the Council was going against what it had promised. She said the deductions would cause the family financial hardship.
19. The Council did not undertake any further assessment of Miss B’s circumstances.

My findings

20. Councils must comply with the Regulations and guidance when deciding special guardianship support. This means they cannot duplicate any other payments – such as child tax credits and child benefit – the guardian receives for the child.
21. However, councils still have the power to consider individual circumstances before deciding a payment, and there are scenarios in which a council can agree a payment which is higher than the standard allowance. One is when the subject child has needs which require greater financial support. Another is when, having considered the guardian’s reasonable outgoings, the Council decides they need extra payments to prevent financial hardship.
22. If a council has reason to believe that either a child’s needs or a guardian’s expenditure means they may need more financial support, I would expect it to take reasonable steps to consider these issues.

Changes to the Council’s approach

23. The Council’s approach pre-2018 was to pay special guardians the same rate as its foster carers, with deductions equal to the child benefit they received.
24. The national minimum fostering allowance is designed to accommodate the fact that foster carers (who do not have any parental responsibility for the children they look after) cannot claim child benefit or child tax credits. Given that Miss B receives child tax credits for the children, and the guidance says councils cannot duplicate other payments made to a special guardian, the Council should have been making child tax credit deductions as well.
25. It did not do this before 2018. At the time of the SGOs, Miss B did not know her allowance would reduce in the future.
26. I do not intend to review the Council’s decisions before 2018. The Council has admitted its approach was wrong, and has apologised to the people affected. Any injustice to Miss B was outweighed by her receiving a higher allowance than she should have for several years.
27. The matter at hand is the Council’s decision, in 2018, to reduce Miss B’s allowance below what it had promised.
28. The Council told Miss B in 2016 that her allowance would be reviewed annually, which in itself means the allowance could be subject to change. It then, in 2018, decided her allowance would match the Council’s fostering rate, with deductions for both child benefit and child tax credits.
29. Although it is understandable that Miss B is dissatisfied with a reduction in her allowance which she did not anticipate beforehand, the Council’s approach is now in line with the Regulations and guidance (which it previously was not).
30. This was not fault by the Council.

Miss B’s individual circumstances

31. As set out earlier in this decision statement, a council – even when paying a special guardian its fostering rate and making the correct deductions – can make extra payments if the guardian’s finances, or the child’s needs, justify them.
32. If a guardian reports that a reduction of their allowance has caused them financial hardship, I would expect the council to complete a financial assessment (under Regulation 13) to decide whether they can afford their reasonable outgoings, and whether it should make an extra payment.
33. Although Miss B told the Council that the new deductions to her allowance would cause her hardship, the Council failed to assess her financial circumstances, and failed to consider whether those circumstances would justify the use of its discretionary powers to provide extra payments.
34. This was fault by the Council. It should now conduct a financial assessment of Miss B, and should decide whether to make extra payments on top of her allowance.

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Agreed actions

35. The Council has agreed to conduct a financial assessment of Miss B.
36. The Council, when it has completed its financial assessment, has agreed to write to Miss B and tell her whether her financial circumstances justify extra payments on top of her special guardianship allowance.
37. These actions should be completed within six weeks of the date of this decision statement.

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Final decision

38. The Council was not at fault for reducing Miss B’s special guardianship allowance. However, it failed to properly consider the use of its discretionary powers. The agreed actions remedy Miss B’s injustice.

Investigator’s final decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman