Summary: The Council was not at fault for reducing Ms B’s special guardianship allowance, for its consideration of whether to make extra payments, or for its assessment of her income. It complied with the Special Guardianship Regulations and properly considered the use of its discretionary powers.

The complaint

1. The complainant, whom I refer to as Ms B, is a special guardian for her niece, and for two other children whom she previously fostered.
2. Ms B complains that the Council reduced her special guardianship allowance below what it had promised. She says the Council should stick to what it agreed. She says this reduction has seriously affected her family’s finances.
3. Ms B says one of the children she looks after has additional needs which require greater financial support. She says the Council failed to assess these needs before deciding not to increase her allowance.
4. Ms B also says the Council, when doing a financial assessment, wrongly counted her foster carer mentoring allowance as ‘income’. She says the DWP and HMRC ignore fostering allowance, so the Council should do the same.

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The Ombudsman’s role and powers

5. 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)
6. 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

7. I considered information from Ms B and the Council.
8. I wrote to Ms 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

9. These Regulations set out the law which applies when councils are deciding financial support to special guardians.
10. 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.
11. Regulation 13 also says councils must only disregard a guardian’s financial resources when considering helping them with legal costs. It may, however, disregard them when considering providing financial support for:
• initial accommodation costs;
• contact costs;
• special care for a child with additional needs (under Regulation 6); or
• time-limited extra payments to former foster carers (under Regulation 7).
12. Regulation 10 says a guardian must give the council an annual statement of their financial circumstances, and must tell the council immediately if those circumstances change.
13. Regulation 6 says a council can pay a guardian more if the child’s needs require greater financial support.
14. Regulation 7 says a council can make an extra payment to a guardian who fostered the subject child, when that extra payment was included in the carer’s fostering allowance. These payments can only continue for two years after the date of the order, unless the council decides there are exceptional circumstances.
15. Regulation 18 says councils must review each special guardian’s financial support arrangements at least annually.

Department for Education special guardianship guidance

16. This statutory guidance accompanies the Regulations and provides more detailed instructions to councils on how to provide support to special guardians.
17. The guidance says financial support paid under the Regulations cannot duplicate any other payment to the guardian in respect of the child.
18. 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

19. 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?

20. Special guardianship orders (SGOs) were issued for the two children Ms B was fostering in 2011 and 2012. Neither the Council’s special guardianship reports nor the SGOs specified the financial support Ms B would receive. However, the reports said she would receive some support. It appears that this was the Council’s fostering rate for both children, with deductions equal to the child benefit she received for them.
21. An SGO was issued for Ms B’s niece in 2017. The Council’s financial support agreement said Ms B’s allowance would match the Council’s fostering rate (again with a deduction equal to child benefit). It said it would review this allowance annually.
22. The agreement also said Ms B would receive an extra payment equal to a ‘skills band’ payment (which is something foster carers receive to recognise their training and experience). It said Ms B would receive this for two years only.
23. 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.
24. The Council completed Ms B’s review in December 2018. 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, which would reduce her allowance by £53.48 per child, per week.
25. Ms B complained that the Council was going against what it had promised. She said the changes would seriously affect her family’s finances.
26. The Council agreed to assess the children’s needs to decide if they required greater financial support. It completed this assessment in March 2019. It decided the deductions to Ms B’s allowance did not stop her meeting the children’s needs.
27. The Council also completed a financial assessment. It decided to increase Ms B’s allowance to help her pay off a loan (and to help her take the children on holiday).
28. Ms B complains that the Council’s financial assessment counted her foster carer mentoring allowance as ‘income’. She said the DWP and HMRC ignore fostering allowance when calculating benefits and tax, so the Council should do the same.

My findings

29. 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.
30. 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.
31. 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

32. 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.
33. 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 Ms 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.
34. It did not do this before 2018. At the time of the SGOs, Ms B did not know her allowance would reduce in the future.
35. 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 Ms B was outweighed by her receiving a higher allowance than she should have for several years.
36. The matter at hand is the Council’s decision, in 2018, to reduce Ms B’s allowance below what it had promised.
37. The Council told Ms B in 2017 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.
38. Although it is understandable that Ms 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).
39. This was not fault by the Council.

Ms B’s individual circumstances

40. 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.
41. 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.
42. If a guardian believes the needs of a child they are looking after require greater financial support, I would expect the council to assess whether those needs justify an extra payment under Regulation 6.
43. Ms B believes she requires a higher allowance because of the needs of one of the children she is looking after. She also told the Council she was suffering financial hardship because of the deductions to her allowance. This meant the Council was under the duty to consider whether to exercise its discretionary powers and to make extra payments.
44. The Council did a needs assessment of the children, but decided their welfare was not affected by the deductions to Ms B’s allowance.
45. The Council also did a financial assessment of Ms B. It decided to make extra payments to help her pay off a loan, and to help her take the children on holiday.
46. I cannot decide the allowance a council should provide to a special guardian. I can only look at whether the council has met its legal duties and properly considered the use of its discretionary powers. If it has, then I cannot question its decision.
47. In my view, the Council did properly consider Ms B’s circumstances before deciding whether to exercise its powers to make extra payments, and did act in line with the Regulations.
48. Because of this, I cannot question the decision about Ms B’s allowance, and I have not found fault with the Council.

Ms B’s income

49. Ms B complains that the Council’s financial assessment counted her foster carer mentoring allowance as ‘income’. She said the DWP and HMRC ignore fostering allowance when calculating benefits and tax, so the Council should do the same.
50. I do not agree. Firstly, the Council conducts its own financial assessments and is not bound by the approach taken by another organisation.
51. Secondly, the Regulations say a council, when deciding financial support, must take account of a guardian’s financial resources (except in certain circumstances which do not apply to Ms B).
52. Ms B’s mentoring allowance (which does not involve her actually being a foster carer) is income, and therefore the Regulations suggest that the Council was entitled to consider it in its financial assessment – regardless of the approach taken by the DWP or HMRC.
53. As a result, I have not found fault with the Council.

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Final decision

54. The Council was not at fault for reducing Ms B’s special guardianship allowance, for its consideration of whether to make extra payments, or for its assessment of her income.

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Investigator's decision on behalf of the Ombudsman