Summary: Ms X complained the Council failed to complete annual reviews of her Special Guardianship Order Allowance from 2008 until April 2020. Ms X says because of this failure to review the Council has underpaid her resulting in financial hardship. On the evidence seen, we found fault with the Council failing to complete annual reviews. The Council has already addressed this fault from 2015 to 2020 and from 2008 to 2009 through backdated payments and addressed its customer service failings through total goodwill awards of £3,756.63. The Council agreed to provide a backdated payment to Ms X for the difference between the Special Guardianship Order Allowance it paid her and the equivalent Fostering Allowance, minus child benefit, from April 2010 to 2015.

The complaint

1. Ms X complained the Council failed to complete annual reviews of her Special Guardianship Order Allowance from 2008 until April 2020 resulting in underpayments.
2. Ms X says because of the Council’s failure to review her Special Guardianship Order Allowance she had to borrow money and take out loans because of the extra costs she incurred caring for her granddaughter.
3. Ms X also complained the Council failed to respond to her complaint in December 2019 and has been engaged in a protracted complaints procedure with the Council since 2020. Ms X says the Council’s investigation upheld parts of her complaint but the Council has not acted on them.

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The Ombudsman’s role and powers

4. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
5. 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)
6. We consider whether there was fault in the way an organisation made its decision. If there was no fault in the decision making, we cannot question the outcome. (Local Government Act 1974, section 34(3), as amended)
7. 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

8. I have considered all the information Ms X provided. I have also asked the Council questions and requested information, and in turn have considered the Council’s response.
9. Ms X and the Council provided comments on my draft decision which I considered before reaching my final decision.

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What I found

Rules and regulations

Special Guardianship – the law, guidance and Council’s policy

10. A Special Guardianship Order (SGO), granted by a Court, gives the Special Guardian parental responsibility for a child who is not their own. It does not entirely remove the parental responsibility of the birth parent but limits it.

Financial support to Special Guardians

11. Section 14F of the Adoption and Children Act 2002 states a council should provide financial support to SGO holders where appropriate following an assessment. The Council has duty to make a plan to provide such support and keep this plan under review.
12. Councils should normally comply with statutory guidance unless they can show local circumstances justify exceptional reasons not to.
13. Statutory Guidance for Special Guardianship 2005 says financial issues should not be the sole reason a Special Guardianship arrangement fails. The Special Guardianship Regulations 2005 say financial support can be paid to Special Guardians to support continuing the arrangement after an SGO is made.
14. Where a council assesses a Special Guardian’s need for financial support, Regulation 13 states councils must take account of:
• other benefits available to the Special Guardian or child;
• the Special Guardian’s financial resources, including any tax credit or benefit available if the child lived with them;
• the amount required by the person for reasonable outgoings and commitments (excluding outgoings in respect of the child); and
• the financial needs and resources of the child.
15. This is known as means testing.
16. The Guidance says in determining the amount of ongoing financial support (sometimes called a Special Guardianship allowance), a council should “have regard to” the amount of fostering allowance that would have been payable if the child were fostered. Any means test should use this maximum payment as a basis for calculation.
17. Case law has further considered this matter. In 2010, the Court (R v Kirklees Council) found paying Special Guardianship allowance as a fixed percentage of fostering allowance without any justification did not comply with the Guidance and was unlawful. The Court said councils should pay Special Guardianship allowance at an equivalent rate to foster carers (with the deduction of Child Benefit if appropriate). A second case in 2012, (R v London Borough of Merton) found that councils should use the National Fostering Network’s minimum allowances as a starting point for calculation and “the decision to adopt a level of allowance for special guardians of two thirds of the Fostering Network's minimum allowances was unlawful”.
18. An Ombudsman’s report, published in July 2013, (12006209) found fault by Liverpool Council in calculating its Special Guardianship allowance at a level below the amount it paid foster carers.
19. From time to time we publish focus reports on key issues of local government practice, drawing on lessons from complaints. In November 2013 we published “Family Values: Council services to family and friends who care for others’ children”. We sent the report to all councils. We expect councils to circulate reports to appropriate departments.
20. The report refers to the 2010 R v Kirklees Council case. It states “the court said the rate a local authority sets for Special Guardianship Allowance should be in line with its Fostering Allowance”. One of the case studies in the report “Fiona’s Story” highlighted fault by a council that paid Special Guardianship allowance at a rate less than the rate it paid its own foster carers. A section in the report on promoting good practice said councils should “Pay special guardians the same rate as foster carers”. The report asked councillors on scrutiny committees to ask “Are the rates to carers being paid in accordance with statutory guidance?”.

The Council’s policy

21. The Council did not have a policy before 2012 for SGO Allowances for reviews of SGO Allowances. The Council says that it would only review an SGO Allowance on receiving a request from an SGO holder.
22. In 2012, the Council introduced its SGO Allowances Policy. The Council’s policy states the Council will complete annual reviews of SGO Allowances and put in place a system for it to track and automatically trigger reviews of SGO Allowances.

What happened

23. In 2008, Ms X and her husband, took care of their granddaughter, Y, under a Special Guardianship Order (SGO). The Council arranged to pay Ms X £24.08 every fortnight as an SGO Allowance.
24. Ms X says she asked the Council to complete annual reviews of her SGO Allowance every year. The Council did not complete any reviews.
25. In 2015, Ms X took care of another granddaughter, Z, and Ms X’s husband was no longer involved in the care of either Y or Z. The Council awarded an SGO Allowance more than £200 for Z and completed annual reviews of this allowance.
26. Ms X formally complained to the Council in December 2019 about the failure to review the SGO Allowance for Y. The Council failed to provide a formal response to Ms X’s complaint.
27. In April 2020, the Council increased the SGO Allowance for Y to £318.78 per fortnight. The Council did not provide an explanation for this increase to the SGO Allowance at this time.
28. Ms X instructed a solicitor in July 2020 to contact the Council on her behalf. In November 2020, the Council wrote to Ms X’s solicitors explaining the reason for the increase to the SGO Allowance in April 2020. By December 2020, the Council had begun an independent Stage 2 investigation into Ms X’s complaint.
29. The independent investigators issued their final Stage 2 report on 15 July 2021. The independent investigators found:
• The Council failed to respond to complaints and questions in a timely manner.
• The Council has now provided an adequate explanation of SGO Allowances to Ms X, although not in a timely manner.
• The Council failed to review Ms X’s SGO Allowance for Y between 2008 and 2020 and the Council had no review mechanism in place.
• Ms X did not request a review of her SGO Allowance until 2020 so she was only entitled to a backdated allowance from this review request date.
• The Council took nearly eight months to provide a response to Ms X’s solicitors which was an unacceptable delay.
• The Council was not at fault for conducting an investigation as it had legitimate concerns about an inappropriate relationship between Y and an older male and concerns about Y’s mental health and low mood. The Council noted the investigation concluded that there was no evidence of an inappropriate relationship.
• No evidence of unprofessional behaviour from Council staff and the response from professionals had been proportionate and suitable.
30. The independent investigators recommended the Council:
• Provided all SGO Allowance holders with a written outcome of their annual review detailing how their allowance had been calculated.
• Consider establishing a mechanism to identify all SGO Allowance holders for SGO Allowances agreed before 2015 which are not subject to the current monitoring systems in place to offer them an annual review.
• Provides Ms X with an apology for all areas of complaint upheld.
31. On 30 September 2021, the Council wrote to Ms X on the back of the independent Stage 2 complaint report. The Council:
• Apologised to Ms X for the poor standard of communication by the Council.
• Said it first received Ms X’s request for a review of Y’s SGO Allowance on 1 December 2019. The Council agreed to backdate Ms X’s allowance to 1 December 2019.
• Said it is reviewing how to put in place written outcomes for annual reviews and how to identify SGO Allowance holders before 2015 to ensure these are also subject to annual reviews.
• Offered Ms X £500 to acknowledge the distress, time and trouble the Council’s delays put her to.
32. The Council paid Ms X £2,799.65 on 6 October 2021 for the backdated SGO Allowance to 1 December 2019.
33. Ms X approached the Local Government and Social Care Ombudsman (The Ombudsman) with this complaint in February 2022. The Ombudsman liaised with the Council to request it produces a Stage 3 complaint response. The Council agreed to proceed with a Stage 3 complaint response.
34. On 21 April 2022, the Council convened a Stage 3 panel. The Council wrote to Ms X on 20 May 2022 and 13 August 2022 to advise of the outcome of the panel. The Council said:
• It had now completed a reassessment of Ms X’s finances and reviewed Y’s SGO Allowance back to 14 October 2015. The Council promised to pay the backdated allowance to this date.
• It was seeking legal counsel on how to address the backdated payments from 2009 to 2015 since it did not have a policy in place during this time.
• There was no issue with the original calculation in 2008 for the SGO Allowance in the first year so any outstanding payment would be for 2009 to 2015.
• Since Ms X had not provided financial information from 2009 to 2015 it would be problematic to complete a meaningful reassessment during this time. The Council requested Ms X provide financial information to show financial difficulty during this time period.
• Since Ms X’s husband was living in the family home from 2009 to 2015, any award would need to be split with him.
• Once it receives its legal counsel it will calculate a backdated award. Meanwhile, it promised to pay Ms X £2,456.63 for half of the mortgage arrears shown up to 2013 as this was an example of financial difficulty although not necessarily as being a direct casual link from taking on Y.
• It would offer Ms X a further award of £300 to reflect the ongoing delays.
35. On 21 September 2022, the Council paid Ms X £33,656.95. This was £29,900.32 in backdated SGO Allowance from 14 October 2015 to 1 December 2019, £2,456.63 for half the mortgage costs, the £300 goodwill award promised on 22 August 2022 and a £1,000 goodwill award.
36. In December 2022, the Council wrote to Ms X to confirm its final consideration following receipt of legal counsel. The Council said:
• In the absence of its own policy from 2008 to 2012 it decided to use a Government recommended model outlined the Special Guardianship Financial Support 2005.
• This model required provision of detailed income information from SGO Allowance holders for the Council to complete assessments.
• It would consider a reassessment in line with the recommended model if Ms X could provide annual financial statements with supporting financial evidence.
• If Ms X could not provide this information, it could consider evidence of financial hardship if Ms X can prove this links to taking on responsibility for the care of a Y.
• On review, it considered it had underpaid Ms X £2,419.04 for the year 2008 to 2009 based on the financial information it had available.
• It needed further information from Ms X for the years 2009 to 2015 to review these and said it had already provided an award for 2013 to reflect financial hardship because of mortgage arrears.
37. The Council paid Ms X the £2,419.04 on 14 December 2022.
38. Ms X told the Council her household income did not change from 2008 to 2015. Ms X said the lack of support through the SGO Allowance during this time resulted in an accrual of mortgage arrears. Ms X said she had already provided evidence of this to the Council in 2022 and disputed splitting the award in half for her husband’s part.
39. The Council told The Ombudsman Ms X had not provided any further information to support a back-payment for 2009 to 2015. The Council said it did not consider mortgage arrears specifically linked or attributable to taking on the responsibility for the care of Y.

Analysis

40. I have reviewed the stage two report. I am satisfied the stage two investigation considered all the relevant information. In doing so, the stage two investigation found fault with the Council on many aspects of Ms X’s complaint. Therefore, I consider it suitable to rely on the findings reached at stage two and I have not reinvestigated the same findings of fault.
41. The Council’s Stage 3 review panel added to the fault found in the Stage 2 independent investigation.
42. Fundamentally, the stage two investigation found fault with the Council failing to have in place a review mechanism for Ms X’s SGO Allowance. Therefore, the Council’s fault meant it was not providing Ms X with a suitable amount for her SGO Allowance. The Council’s Stage 3 review panel recommended the Council reviewed the SGO Allowance for Y back to 2008 to address any underpayments made.

Ms X’s SGO Allowance from 2015 onwards

43. The Council has already gone part-way to addressing the SGO Allowance underpayments caused by its fault. The Council has calculated it made underpayments to Ms X going back to 14 October 2015. The Council has already paid Ms X for these underpayments.
44. I am satisfied the Council has suitably addressed the SGO Allowance underpayments to Ms X from 14 October 2015 to date.

Ms X’s SGO Allowance from 2008 to 2009

45. The Council at first told Ms X it was satisfied the calculation of the SGO Allowance for Y in 2008 was accurate based on the information provided. As such, the Council says the payment amount for Y’s SGO Allowance from 2008 to 2009 was correct. Ms X disputed this and said she disputed this in 2008 when the allowance was first awarded.
46. The Council has since recalculated the SGO Allowance for 2008 to 2009 and paid Ms X of £2,419.04 for this year. The Council made this payment by completing a reassessment of the financial information Ms X provided in 2008.
47. While there is discrepancy in the Council’s response about this matter, I have not investigated this. As detailed in paragraph 4, The Ombudsman cannot investigate complaints when someone takes more than 12 months to complaint to us about something a council has done.
48. Ms X’s complaint about failure to review the SGO Allowance was an ongoing issue from 2009 (the date the first review should have taken place) through to 2020. This formed all part of one complaint. However, the original decision about the SGO Allowance is distinctly different to the complaint about failing to review the SGO Allowance.
49. Ms X says she disputed the original SGO Allowance in 2008 but took until 2022 to complain to The Ombudsman. I would expect Ms X to have complained to The Ombudsman much sooner about this part of the complaint.
50. I cannot investigate whether the original SGO Allowance was correct 15 years after this happened. But, I will note the Council has satisfied itself that it has addressed the SGO Allowance underpayments to Ms X from 2008 to 2009 through payment of the £2,419.04.

Ms X’s SGO Allowance from 2009 to 2015

51. When Ms X took on Y under an SGO in 2008, the Council had no system in place to trigger a review of the SGO Allowance for Y.
52. The Council failed to keep Ms X’s SGO Allowance under review as per the Adoption of Childrens Act 2002. This was fault.
53. The Council has said the 2002 Act requires it to get proof of income/ outgoings to complete a financial assessment every year. It would use this information to decide a person’s SGO Allowance. If the Council does not receive this information, it cannot use information from different years to calculate the SGO Allowance. Since Ms X did not provide the Council with financial information from 2009 to 2015, it cannot complete a financial assessment between these years. I cannot find fault with the Council for this.
54. In the absence of financial information, a person would need to provide the Council with proof of financial hardship related to taking on a child under an SGO. In this instance, the Council did not consider Ms X’s payment of her mortgage presented a financial hardship linked to taking on Y under an SGO. The Council was specific in its response to the Ombudsman the payment of £2,456.63 for half of the mortgage arrears was a goodwill award, I will address this goodwill award later.
55. In the circumstances of Ms X complaint, I agree that taking on Y under an SGO has not caused a direct causal link to mortgage payment. On review of Ms X’s mortgage payments, Ms X was generally able to meet her mortgage payment, with some minor discrepancies, from 2008 to 2015. Most of the defaults occurred after 2015, following a change in the household makeup and not through taking Y on under an SGO. I cannot find financial hardship through mortgage arrears caused by taking on Y under an SGO.
56. The Council has argued that since Ms X did not provide financial information and there is no evidence of financial hardship caused by the SGO, it cannot make any additional payment. This is an incorrect conclusion to reach.
57. The courts have determined that local authorities should pay Special Guardianship Allowance at an equivalent rate to foster carers (with the deduction of Child Benefit if appropriate), see paragraphs 18 and 20 above.
58. From 28 March 2009, the Council set its Fostering Allowance for 0-4 year olds at £125.09 per week and £142.52 per week for 5-10 year olds. This remained the same until March 2014. This was above the Minimum Foster allowances.
59. In March 2014, the Council increased its Fostering Allowance for 5-10 year olds to £144.69 per week. This remained the same, and above the Minimum Foster Allowance, until March 2019.
60. Despite these fostering allowance payments, the Council only paid Ms X £12.04 per week for her SGO Allowance. Ms X was receiving an SGO Allowance well below the fostering allowance rate even when child benefit is deducted. In light of the court case in 2010 the Council’s failure to review Ms X’s SGO Allowance and consider the fostering allowance rate in order to calculate Ms X’s SGO Allowance was maladministration.
61. The Council should pay Ms X the same rate as its Fostering Allowance rate (minus child benefit) from April 2010 (the date of the court case) until 2015. As Ms X was a joint SGO holder for Y with her ex-partner, the Council should split this award between Ms X and her former partner. The Council should ensure her former partner receives the correct payment as well.
62. From 2009 to 2010, the Council need not pay any more than it already has done. The court case is only effective from April 2010 and Ms X did not provide financial information or prove financial hardship for the period 2009 to 2010.

Ms X’s distress, time and trouble

63. The Council has also provided a total award of £3,756.63 in goodwill to Ms X as part of the various payments to Ms X in 2021 and 2022. This goodwill award includes the £2,456.63 for half of the mortgage arrears, a payment of £300 and a payment of £1,000.
64. This level of goodwill is more than what the Ombudsman would normally look to award for the delays, distress, inconvenience and frustration this matter put Ms X to. As such, I would not recommend a further goodwill award.

The Council’s practices

65. As part of the Stage 2 investigation, the Council committed to providing all SGO Allowance holders a written outcome of their annual review. The Council also said it would consider establishing a mechanism to identify SGO Allowance holders whose SGO Allowances had been agreed before 2015 to complete annual reviews.
66. I am satisfied the Council took suitable steps to follow on from the Stage 2 recommendations to put in place suitable service improvements to identify SGO Allowance holders who did not have annual reviews.
67. The Council has also committed to reviewing historic SGO Allowances and provide a back payment. I do not consider the Council needs to take further action to address its practices.

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Agreed action

68. Within one month of the Ombudsman’s final decision the Council should:
• Make a backdated payment to Ms X for the difference between what it paid Ms X for Y’s SGO Allowance and the rate it paid its Fostering Allowance, minus child benefit for Y, from April 2010 until 14 October 2015. This backdated payment should be split between Ms X and her former partner as joint SGO holders during this time.
69. The Council should provide us with evidence it has complied with the above actions.

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Final decision

70. There was fault by the Council as the Council has agreed to my recommendation, I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman