Summary: Mrs B says the Council failed to pay her an appropriate amount as a special guardianship allowance. The Council failed to follow Government guidance when deciding how much to pay Mrs B, failed to consider whether Mrs B had an exceptional case, wrongly stopped the payments without notice, failed to consider whether it was appropriate to deduct child benefit from the special guardianship allowance and delayed providing a breakdown of how it had calculated the financial support. An apology, payment to Mrs B, reconsideration of whether to deduct child benefit from her allowance, a review of the Council’s special guardianship policy and training for officers is satisfactory remedy.

The complaint

1. The complainant, whom I shall refer to as Mrs B, complained the Council:
• failed to pay the minimum national fostering allowance equivalent rate when calculating her special guardianship allowance (SGA) at the end of the two-year period November 2022;
• when agreeing to pay the SGA at the minimum national fostering rate in November 2022, failed to backdate that to the date it reduced the allowance;
• incorrectly applied regulation 7 of the special guardianship guidance and stopped her SGA at the end of the two-year period despite the fact she had applied for an extension;
• wrongly deducted child benefit from her SGA, contrary to Government guidance;
• failed to provide a breakdown of how it had calculated her SGA; and
• failed to address her concerns about the Council misapplying regulation 7 when responding to her complaint.
2. Mrs B says the Council’s actions have caused her significant distress and anxiety at a time when she needed support to provide a permanent family home to vulnerable children, all of whom have additional needs. Mrs B says she has also experienced significant financial pressure as a result.

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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 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

5. As part of the investigation, I have:
• considered the complaint and Mrs B's comments;
• made enquiries of the Council and considered the comments and documents the Council provided;
• considered the Special Guardianship Regulations 2005 (as amended in 2016);
• considered the Special Guardianship guidance, January 2017 issued by Department for Education;
• considered the Department of Education Means Test Model for adoption and special guardianship financial support;
• considered caselaw;
• considered the focus report issued by the Ombudsman: Family Values: Council services to family and friends who care for others’ children, 2013;
• considered the focus report issued by the Ombudsman: Firm Foundations: complaints about Council support and advice for special guardians, 2018.
6. Mrs B and the organisation had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.
7. Under our information sharing agreement, we will share this decision with the Office for Standards in Education, Children’s Services and Skills (Ofsted).

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What I found

What should have happened

8. Under a special guardianship order the courts appoint someone, often extended family members, like grandparents, to be a child’s special guardian who will then become responsible for all day to day decisions about the child.
9. Councils are required to make arrangements for the provision of special guardianship support services, including financial support, as prescribed in The Special Guardianship Regulations 2005 (The Regulations).
10. The Government has also issued Special Guardianship guidance (the guidance). The guidance says special guardianship arrangements should not fail just because of financial problems. Financial support should be paid to help secure a suitable arrangement where this is not possible because of a financial obstacle.
11. Financial support is referred to as an SGA. Any support, including financial, should be reviewed at least annually. SGA is means tested and the guardian may end up receiving no payment.
12. Regulation 7 says for former foster carers financial support may include an element of remuneration for two years from the making of an order. That element of remuneration ceases to be payable after the expiry of the period of two years unless the local authority consider its continuation necessary having regard to the exceptional needs of the child or any other exceptional circumstances.
13. Regulation 13 says in determining the amount of financial support, the local authority must take account of any other grant, benefit, allowance or resource which is available to the person in respect of his needs as a result of becoming a special guardian of the child.
14. Regulation 16 says after deciding whether to provide special guardianship support services to a person, the local authority must give the person notice of that decision, including the reasons for it. If the local authority decide financial support is to be provided, the notice must include the method of the determination of the amount of financial support.
15. The starting point for calculating SGA, if a person qualifies for it under The Regulations, is the Council’s fostering allowance rate. A council can depart from the fostering allowance as the starting point if it has ‘cogent reasons’ to do so. However, the courts have not yet found a case where the council could prove a good reason.
16. The guidance says the procedure for assessment set out in Regulations 12 and 13 applies equally to a review of financial support as to first assessments for financial support. If the local authority proposes, as a result of the review, to reduce or terminate financial support or revise the plan, before making that decision the local authority must give the person an opportunity to make representations. For that purpose it must give the person notice of the proposed decision and the time allowed for making representations, but the local authority may suspend financial support pending that decision if they think it appropriate. The guidance in regulation 13 includes the following paragraph:
• In determining the amount of any ongoing financial support, the local authority should have regard to the amount of fostering allowance which would have been payable if the child were fostered. The local authority’s core allowance plus any enhancement that would be payable in respect of the particular child, will make up the maximum payment the local authority could consider paying the family. Any means test carried out as appropriate to the circumstances would use this maximum payment as a basis.
17. The Department of Education has developed a model means test for special guardianship financial support. It is not a statutory requirement for local authorities to use this model. However the Department does recommend its use to establish a fair, consistent, and equitable approach between local authorities.
18. The model means test says if a family receives income support it recommends the Council pay the family the maximum payment (income support plus 25%) without assessing their income/expenditure in the test and the figure paid to the family should not include any deductions for child benefit.
19. This advice from the Government is not a statutory requirement for local authorities but a recommendation to achieve a fair and consistent approach by local authorities. The Ombudsman would want to see how local authorities took account of such advice from the Government when deciding whether to deduct child benefit from those in receipt of income support.
20. The Council’s special guardianship policy (the policy) says the Council will use the model means test referred to in paragraph 16 and 17 to calculate allowances. The maximum payment per week, per child will be equivalent to a payment that brings the assessed family up to 25% above the level they would receive on income support, universal credit or equivalent after allowable expenses. The policy says though there may be individual or exceptional circumstances that apply.

What happened

21. Mrs B was originally a kinship foster carer for her grandchildren. In 2019 Mrs B became a special guardian for the children. Under the terms of the special guardianship order Mrs B continued to receive an SGA at the same rate as the fostering allowance she had previously received. That was for a two-year period until November 2020.
22. In October 2020 Mrs B applied for an extension to the SGA.
23. The Council stopped paying Mrs B the SGA in November 2020 as that was the end of the two-year period. When Mrs B complained the Council reinstated the payment while it considered whether to extend its financial support.
24. In February 2021 the Council’s finance and resource panel agreed a 12 month extension of financial support of £484.85 per week for the children. That was based on income support rates +25%, rather than the minimum national fostering allowance rate, which Mrs B had previously received. That meant a reduction in the amount Mrs B received. There is no evidence the Council sent Mrs B a breakdown of how it had calculated that amount.
25. The Council carried out a further means test in November 2021. The Council awarded £343.40 per week for the children. Mrs B raised concerns about that and asked for a breakdown of how the Council had calculated the amount. The Council sent Mrs B that calculation in December 2021. That calculation did not break down how the Council had reached its figures for the income support rates.
26. Mrs B put in a complaint in February 2022. When responding to that complaint the Council agreed to increase the SGA to £484.85 per week. That was to reflect the assessment in February 2021. The Council backdated the amount to December 2021. The Council awarded that as it accepted it had not taken into account the children’s exceptional needs.
27. Mrs B again asked the Council for a breakdown of how it had calculated the allowance. The Council sent Mrs B a breakdown in April 2022. That breakdown though did not explain how the Council had calculated the income support rates.
28. Mrs B asked the Council to escalate her complaint to stage two. At stage two the Council did not uphold the complaint about failing to use the minimum national fostering allowance rate when calculating the SGA or the complaint about deducting child benefit from the SGA. The Council accepted though it had not provided Mrs B with a breakdown of how it had calculated the SGA despite her repeated requests.
29. Mrs B was not happy with the outcome of stage two. The Council therefore considered the complaint at stage three. Stage three partially upheld the complaint about how the Council had calculated the SGA allowance. The Council recognised exceptional circumstances applied in Mrs B’s situation as she was caring for multiple grandchildren. The Council therefore agreed to pay Mrs B an SGA at the same rate as the Council’s level I fostering allowance, minus child benefit. The Council also agreed to:
• pay Mrs B £300 to reflect her time and trouble;
• recalculate the SGA in line with equivalent fostering rates for the respective children from 1.11.22. This will be paid for each child until either:
1. The child ceases to live with Mrs B;
2. The child ceases full time education or training or commences employment;
3. The child qualifies for income support or JSA in their own right; or
4. The child turns 18 unless they continue in full time education or training, when it may continue until the end of the course or training they are undertaking.
• The complaints department to track and monitor future recommendations as they are made in complaints and representations to the Council to ensure compliance with recommendations and to raise with senior leaders when actions are not completed;
• review SGO financial assistance arrangements. That review will include Mrs B and her representative and representatives from the Peterborough Kinship Carers Group to assist in the co-production of guidance.

Analysis

30. The Ombudsman will not normally consider the substantive issues that have been investigated by a Council at stage two of the children’s complaints procedure. That is because an independent investigation has already taken place and considered the relevant documentary evidence. In this case though I have considered the substantive issues because it is clear from the stage two report that the independent investigator considered there was a contradiction between regulations, guidance and caselaw. In those circumstances I have considered the substantive issues.
31. Mrs B says the Council failed to pay the minimum national fostering allowance equivalent rate when calculating her SGA between November 2020 and November 2022. I set out in paragraphs 14-16 what The Regulations and guidance say about the calculation of SGA payments. The guidance is clear the starting point when considering an SGA is the minimum national fostering allowance rate and that guidance has been further confirmed by caselaw. That does not mean the Council has no option but to award the minimum national fostering allowance rate when setting an SGA. What it means though is the Council must begin with the minimum national fostering allowance rate as a starting point and be able to demonstrate it has taken that into account and explain why it has deviated from that amount, should that be the case.
32. In this case I am satisfied the Council paid the SGA at the national minimum fostering rate for the first two years. The Council then considered whether to grant a further SGA at the end of the two-year discretionary period in February 2021, November 2021 and March 2022. On each of those occasions the Council awarded an amount which was less than the minimum national fostering allowance rate. At stage two the independent investigator recorded her view that the minimum national fostering allowance rate only applied for the first two years. That was her interpretation of The Regulations and guidance.
33. It is not the Ombudsman’s role to interpret guidance or legislation. Instead, we will take it on its simple reading. Having considered The Regulations, guidance and caselaw I have seen no evidence to suggest the reference to using minimum national fostering allowance rates applies only for the first two years. Instead, I note Regulation 13, in setting out how the Council should carry out assessments for special guardianship financial support, refers back to regulation 7 and says the method of calculation should be the same as for the initial assessment. That does not suggest to me the reference to using minimum national fostering rates is relevant for only the first two years of a special guardianship order.
34. I further note regulation 7, which I refer to in paragraph 12, says remuneration can continue beyond two years if the Council considers it necessary where exceptional circumstances apply. I would have expected the Council to take into account The Regulations and guidance when deciding what financial support to award Mrs B in February 2021, November 2021 and March 2022. I have seen no evidence it did so in this case as there is no reference to the minimum national fostering allowance rate or why the Council did not consider that rate appropriate in those assessments. That is fault.
35. In addition to The Regulations and guidance I also note the Council’s own policy says there may be individual or exceptional circumstances that apply. In those circumstances I would have expected the Council to consider whether it was appropriate to continue the SGA at the rate Mrs B had received for two years, which the Council has now done following a complaint. It should not have taken a complaint to get to this point. Failure to consider when the two-year period came to an end whether there were exceptional circumstances which would warrant a payment at or close to the minimum national fostering allowance rate, taking into account the guidance and caselaw is fault.
36. I am satisfied though the Council has now decided to award an SGA at the minimum national fostering allowance rate for the children. It has also decided this does not need to be reviewed annually. I welcome that decision. It is clear the Council has decided to award that amount as it considers Mrs B’s circumstances are exceptional as she has multiple children to support, all of whom have varying degrees of additional needs. Given that has been the case throughout the entire period Mrs B has been caring for the children though I would have expected the Council to backdate the award at the level of the minimum national fostering allowance rate to February 2021. February 2021 was the point at which the SGA was first reduced. Failure to do that is fault. As remedy for this part of the complaint I recommended the Council pay the difference between the amount Mrs B received and the minimum national fostering allowance rate between February 2021 and November 2022. The Council should also ensure when carrying out its review of its special guardianship policy it makes sure the policy is clear about the implications of the guidance and caselaw. The Council has agreed to my recommendations.
37. Mrs B is also concerned the Council stopped the SGA in November 2020 despite the fact she had applied for an extension. The Council accepts it was at fault here and has apologised to Mrs B and offered her £300 to reflect the impact this had on her. I welcome the Council’s willingness to accept where it has been at fault. I consider though the abrupt ending of Mrs B’s SGA when she had submitted a request for it to be extended came as a significant shock to her. Taking that into account, plus the other areas on which I have found fault in this case, I recommend a revised financial remedy to reflect Mrs B’s distress later in this statement, which the Council has agreed to.
38. Although the Council has now awarded an SGA at the minimum national fostering allowance rate Mrs B remains concerned the Council is deducting child benefit from that amount. Mrs B points to the guidance, which I refer to in paragraph 18, which says when a person is in receipt of income support the Council should not deduct child benefit from any SGA payments. In this case Mrs B receives universal credit, which is equivalent to income support. The Council says though it is required to deduct child benefit from the SGA under the terms of regulation 13 which says it must take into account any benefits a special guardian may receive.
39. I appreciate there is a tension between The Regulations and guidance. I also recognise the guidance issued by the Government is just that: guidance. However, the Ombudsman would expect the Council to have regard to Government guidance and be able to justify a departure from that guidance where it decides to do so. The Ombudsman’s long-standing position is that we would expect councils to follow the guidance and not deduct child benefit from an SGA for those who are on income support unless there is a clear justification, which does not amount to a fettering of the council’s discretion, for doing so.
40. I am concerned in this case by adopting the position of always deducting child benefit from an SGA on the basis regulation 13 requires it to do so, thereby ignoring the guidance and previous Ombudsman decisions, amounts to a fettering of the Council’s discretion. I would expect instead, in each case, for the Council to decide whether it is appropriate to deduct child benefit, taking into account The Regulations, guidance, caselaw and Ombudsman decisions/focus reports. I have seen no evidence the Council considered Mrs B’s circumstances when deciding whether it was appropriate to deduct child benefit from the SGA awarded. Instead, the Council applied a blanket reduction. I therefore consider the Council’s decision is affected by fault. As remedy for this part of the complaint I recommended the Council consider whether it is appropriate in Mrs B’s case to continue to deduct child benefit from her SGA. I also recommended the Council consider as part of its review of its special guardianship policy the way in which the policy sets out how the Council will consider child benefit for those on income support who have an SGA, taking into account the guidance and our previous decisions. The Council has agreed to my recommendations.
41. Mrs B says the Council failed to provide a breakdown of how her financial support had been calculated following the assessments undertaken in February 2021, November 2021 and March 2022. I recognise the Council sent Mrs B some information about the calculation of her SGA in December 2021 and March 2022. However, I do not consider the explanations provided by the Council are clear, particularly in terms of how it had reached the income support figures quoted in those communications. As the Council is required to provide a clear breakdown under The Regulations I consider the Council at fault here. For future cases I recommended the Council ensure when communicating with special guardians about the SGA awarded the Council make clear how it has calculated the income support rate. I also recommended the Council pay Mrs B an additional £500 to reflect her distress. The Council has agreed to my recommendations.
42. Mrs B also says when considering her complaint the Council failed to address her concerns about how it had applied regulation 7. I am satisfied the Council has addressed the issue of regulation 7 in its complaint responses, albeit I have raised concerns in this decision about how the Council reached its conclusions.

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Agreed action

43. Within one month of my decision the Council should:
• apologise to Mrs B; and
• revisit its decision to deduct child benefit from Mrs B’s SGA given Government guidance and previous Ombudsman decisions/focus reports and let us know the outcome. Should the Council not be able to identify a justification for deducting child benefit it should repay to Mrs B the amount it has deducted for child benefit from her SGA since November 2020 within two months.
44. Within two months of my decision the Council should:
• pay Mrs B £500 to reflect her distress;
• pay Mrs B the difference between the SGA amounts she received which were not based on the level I fostering allowance and the level I fostering allowance for the period February 2021-November 2022.
45. The Council should ensure its current review of the special guardianship policy takes into account The Regulations, guidance, previous Ombudsman decisions/focus reports we have issued and caselaw.
46. Within two months of my decision the Council should carry out a training session for officers on:
• the calculation of SGA payments, taking into account The Regulations, guidance and caselaw;
• the need to ensure a breakdown is provided when an SGA has been awarded so the person receiving the allowance can establish how the figure has been reached;
• the action officers need to take when a two-year transitional SGA is coming to an end to ensure the recipient has an opportunity to apply for an extension before the award ceases.

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Final decision

47. I have completed my investigation and uphold the complaint.

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Investigator's decision on behalf of the Ombudsman