Summary: The Council failed to make a reasonable contribution to Miss B’s nursery expenditure and loss of earnings when she became a Special Guardian, after it agreed to do so. The Council also failed to ensure the nursery provided Miss B with clear invoices. The Council has agreed to make a payment to Miss B and to take action to ensure all providers of free early education are providing parents with clear, transparent and itemised invoices.

The complaint

1. Miss B complains that, after she became a Special Guardian, the Council:
• Failed to properly consider her nursery expenditure and loss of earnings after it agreed to do so to remedy a previous complaint.
• Failed to make a reasonable contribution to her nursery expenditure and loss of earnings after it agreed to do so.
• Did not ensure she received the free childcare she was entitled to.

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The Ombudsman’s role and powers

2. 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)
3. 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)
4. 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

5. I have:
• considered the complaint and the documents provided by the complainant;
• discussed the issues with the complainant;
• made enquiries of the Council and considered the comments and documents the Council has provided; and
• given the Council and the complainant the opportunity to comment on my draft decision.

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What I found

Background

6. J was born in September 2014. Miss B (who is the aunt of J’s mother) and her partner became J’s special guardians on 28 July 2015.
7. Miss B made a formal complaint to the Council about it not providing her with any legal advice before the hearing for the special guardianship order and a lack of financial support.
8. At the last stage of the complaints procedure, the panel found that in the absence of legal advice, Miss B would not have been aware of the financial support and the long-term impact of becoming a special guardian. The panel recommended the Council should consider Miss B’s nursery costs and loss of earnings from 2015 and make a reasonable contribution towards those costs. The Council wrote to Miss B and confirmed that it accepted the panel’s findings and recommendations.
9. Miss B was unhappy with the Council’s final response and brought her complaint to the Ombudsman. We investigated Miss B’s complaint and found the Council was at fault for not explaining to Miss B that it had not considered her loss of earnings or nursery fees because she had rejected its stage three offer. We recommended that the Council consider Miss B’s nursery expenditure and loss of earnings and whether a financial remedy was appropriate.
10. The Council wrote to us to confirm that it had taken the actions we recommended, but that it had decided that no further payments were due to Miss B. It set out how it had reached its decision and provided supporting evidence.

The Council’s decision to make no further payments

11. Miss B complained to the Ombudsman that there were failings in the way the Council reached its decision that no further payments were due. Miss B says she lost £1775.74 in income as a direct result of becoming a Special Guardian and has paid over £30,0000 in nursery fees. She says she is now in significant debt as a direct result of the Council’s failure to provide adequate financial support.
12. I have considered the way the Council reached its decision to not make any further payments. One of the reasons for the Council’s decision was that Miss B did not request support in an assessment form she completed in July 2015. It has already been accepted that Miss B did not receive the legal advice she was entitled to, and so she was not fully aware of the financial support available and the long-term impact of becoming a special guardian. This was one of the reasons the panel recommended that the Council make a reasonable contribution towards Miss B’s nursery costs. The Council should not have taken the assessment form into consideration when deciding whether to make any additional payments to Miss B.
13. Another reason the Council gave for deciding not to make any further payments was that Miss B included information about bedroom refurbishment costs in the annual review form for 2016-17. This should not have been taken into consideration; it was not paid and is not relevant to the decision.
14. The Council also said that it had decided not to make any further payments in relation to nursery costs because Miss B had already received £12,000 funding towards nursery charges from the Council. There is a national childcare scheme which enables eligible parents to receive some free childcare once their child is two years old. The £12,000 funding which the Council has referred to here was the cost to the Council of the free childcare Miss B received between 2017 and 2019. It was not provided to support Miss B as a special guardian and is therefore not relevant to the decision.
15. Another reason the Council gave for not providing any further payments in relation to nursery costs was that Miss B received £3923.95 towards childcare for the period 26 June 2015 to 5 April 2016. Miss B did receive this help with childcare costs through working tax credits. The tax credits were not provided to support Miss B as a Special Guardian, but it was appropriate for the Council to take this support into consideration when deciding on the amount of any additional payments.
16. The Council has been provided with evidence to show that Miss B has paid around £35,000 in nursery fees. The only help she received with these costs was in the form of tax credits paid by the government. The Council has not offered any contribution towards her nursery costs, or any reasonable justification for this. I consider there was fault in the way the Council reached its decision to not make any further payments to Miss B in relation to her nursery costs.
17. Where we find fault in the way a decision was reached, we normally recommend that the Council reconsider its decision. However, the Council has already had several opportunities and has not properly done so. I have therefore recommended that the Council pay Miss B an amount which I consider to be a reasonable contribution to Miss B’s nursery costs. The evidence I have seen shows that Miss B spent £35,875 in nursery fees. Tax credits cover up to 70% of childcare costs, up to a maximum of £122.50 per week. I consider a reasonable contribution by the Council would be 30% of the amount she paid in nursery fees.
18. The Council’s reason for not making any further payments in relation to Miss B’s loss of earnings is that her salary only dropped for a short-term period of two months. This does not explain why the Council should not make a reasonable contribution to Miss B’s loss of earnings, in accordance with the action it agreed to take following the stage three panel.
19. The evidence shows that Miss B was due to receive a responsibility allowance of £150 per month until the end of December 2015, but she stopped receiving it at the end of August. Miss B’s basic monthly pay also dropped by £389.66 in October and November 2015. Miss B considers she would not have lost this money if she had not become J’s special guardian. The evidence suggests Miss B lost the responsibility allowance and had to temporarily reduce her hours because she was initially struggling to carry out her job alongside caring for J.
20. The Council has not offered any contribution towards Miss B’s loss of earnings, or any reasonable justification for this. I consider there was fault in the way the Council reached its decision that it should not make any payments to Miss B in relation to her loss of earnings. This was fault.
21. If Miss B had received the legal advice she was entitled to, and the Council had agreed to pay towards her nursery fees before the special guardianship order was made, Miss B may not have lost this income. I consider the Council should make a payment to Miss B which is equivalent to 50% of the income she lost.

Free early education entitlement

22. The Childcare Act 2006 (as amended) places a duty on councils to secure early years provision free of charge. Children are entitled to between 570 and 1,140 hours of childcare over no fewer than 38 weeks of the year, depending on their age and eligibility. Regulations set out how councils should discharge their duty. The government has also issued statutory guidance councils must follow and from which they must not depart unless they have good reason.
23. Government guidance says the free places must be delivered completely free of charge and councils should ensure that providers do not charge parents “top-up” fees (any difference between a provider’s normal charge to parents and the funding they receive from the local authority to deliver free places).
24. Government guidance also says councils should work with providers to ensure their invoices and receipts are clear, transparent and itemised allowing parents to see that they have received their child’s free entitlement completely free of charge and understand fees paid for additional hours or services.
25. In January 2017, the term after J was two years old, he was entitled to 15 hours of free childcare each week. Between January 2018 and August 2019, he was entitled to 30 hours of free childcare each week.
26. The nursery was not providing Miss B with invoices and was just charging Miss B a set weekly fee. It told Miss B that it reduced the total fee by £50 for a child entitled to 15 hours of free childcare, and by £100 for a child entitled to 30 hours of free childcare.
27. The free entitlement should not be represented to parents as a monetary subsidy. Statements or invoices should clearly show the free hours taken for that period, and the fees for the provision of any additional hours.
28. I consider the Council failed to ensure the nursery provided Miss B with clear, transparent and itemised invoices to clearly show that she was receiving J’s free entitlement completely free of charge. This was fault. However, I am satisfied that Miss B did receive her entitlement completely free of charge, and so I do not consider the failure to provide clear invoices caused Miss B any significant injustice.

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Agreed action

29. Within four weeks, the Council will make the following payments to Miss B:
• £10,762.50. This is 30% of the amount Miss B paid in nursery fees.
• £480. This is approximately 50% of the amount of income Miss B lost.
• £200 for the avoidable time and trouble Miss B has been put to pursuing her complaint.
30. Within eight weeks, the Council will review its procedures to ensure that when it carries out monitoring, it checks that all providers of free early education are providing parents with clear, transparent and itemised invoices which clearly show the free hours taken for the period, and the fees for any additional hours. It will also check the free entitlement is not represented to parents as a monetary subsidy.

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Final decision

31. I have completed my investigation and uphold Miss B’s complaint. There was fault by the Council which caused injustice. The action the Council has agreed to take is sufficient to remedy that injustice.

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Investigator's decision on behalf of the Ombudsman