Summary: Miss X complained about how the Council manged her savings as a looked after child. There was fault in how the Council delayed transferring Miss X’s savings to her Child Trust Fund account and how it failed to provide Miss X with clear information about her savings. This caused Miss X avoidable distress for which the Council agreed to apologise and pay her a financial remedy. It also agreed to review its policy and practices around savings for looked after children.

The complaint

1. Miss X complains about how the Council managed her savings for her child she was looked after by the Council. She says the Council:
• should have started saving for her earlier than it did;
• did not manage her savings properly; and
• did not give her clear information about what savings the Council held for her.
2. As a result, Miss X says she had less money than she expected and this caused her avoidable distress. She wants the Council to provide a clear breakdown of her savings, along with backdated payments and interest.

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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 significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. When considering complaints we make findings based on the balance of probabilities. This means that we look at the available relevant evidence and decide what was more likely to have happened.
5. 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

6. I considered evidence provided by Miss X and the Council as well as relevant law, policy and guidance.
7. Miss X and the Council now had an opportunity to comment on my draft decision. I considered their comments before making a final decision.
8. 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

Savings for looked after children

9. Savings accounts for most looked after children are managed by a charity, (Charity A), appointed by the Government in around 2017.
10. Children who are looked after by a council for more than 12 months should usually have one of the following accounts, setup and/or managed by Charity A:
• a Child Trust Fund account (CTF), if they were born between September 2002 and January 2011; or
• a Junior individual savings account (Junior ISA), if they were born outside those dates.
11. It is not possible for a child or young person to have both a Child Trust Fund and a Junior ISA. (Individual Savings Account Regulations 1998, Regulation 12A)
12. Government guidance (Junior individual saving accounts for looked-after children) says councils should cooperate with Charity A, and share information about children and young people in their care. Councils should also make children (where appropriate) and their parents or carers aware of the account and that it is being managed by Charity A.
13. Councils do not have to build savings for looked after children. However, councils can choose to do so and, if they do, should have a policy setting out the Council’s approach.
14. Since June 2016, the Council has had a policy of saving for children who are in care. Where a child or young person has an account managed by Charity A, the Council pays these savings to the Charity for it to manage.

What happened

15. Miss X became a looked after child some time before the Council’s savings policy started in June 2016. At the time Miss X came into the Council’s care, she had a CTF set up by her biological parents.
16. A statement for Miss X’s CTF in late 2021 showed that only payments into that account, as that point, were ones made by Miss X’s parents before she became looked after by the Council.
17. Although the Council’s savings policy came into effect in June 2016, the Council’s records show it did not begin making payments to Charity A until early 2022. The first payment the Council made to Charity A was for savings between April 2019 and December 2021. The Council then made a further lump-up payment for payments backdated to June 2016. After this, the Council made quarterly payments until Miss X turned 18.
18. Just before Miss X turned 18, Charity A contacted her about her CTF so she could take control of the account.
19. The Council also paid Miss X a small amount of her savings directly, since Chairty A would not accept any further payments after Miss X turned 18.

My findings

20. The Ombudsman can only investigate the actions of the Council. So, while I can consider how the Council acted and whether it followed its own policy, I cannot investigate any investment decisions made by Charity A when it was managing Miss X’s CTF. The Council had no influence over those financial decisions.
21. The Council has shown it saved the correct amount for Miss X for the period between when its savings policy started in June 2016 to when she turned 18. The total amount the Council transferred to Charity A and directly to Miss X when she turned 18, is the same as the amount as it should have saved under its policy.
22. In its response to my enquiries, the Council said Miss X’s savings were invested in a Junior ISA. However, this is not possible since children can only have either a CTF, or a Junior ISA, not both.
23. I am satisfied, on the balance of probabilities, that Charity A invested the amounts transferred from the Council into Miss X’s CTF. I have reached this view because:
• Miss X could only have either a CTF or a Junior ISA, not both;
• the fund Miss X has details of was solely used for CTFs; and
• the only explanation for the final balance in that fund, is that the money the Council saved was added to the amount Miss X’s parents saved before she became a looked after child.
24. However, the evidence from the Council shows there were delays in transferring Miss X’s savings to Charity A. Although the Council’s policy was to start saving for Miss X in June 2016, it did not transfer any of these savings to Charity A until early 2022. I am satisfied that delay was fault.
25. Had the Council transferred Miss X’s savings to Chairty A sooner, those savings would have had a chance to earn interest or grow in value while in her CTF. Since the performance in investments are so variable, I cannot say how much Miss X’s savings would have been, had there been no delays. However, there is a remaining uncertainty about this which is an injustice to Miss X.
26. The Council has also provided no evidence it properly informed Miss X or her carers about the arrangements for her savings. The Government guidance makes it clear that councils should provide suitable information to looked after children and young people about their savings. The Council’s failure to do that was fault which caused Miss X avoidable frustration and worry at a time of significant change in her life.
27. I am also satisfied the Council failed to keep clear and adequate records about Miss X’s savings and the accounts maintained for her. That added to the confusion as it could not provide Miss X with the relevant details when she complained. That added to her frustration.

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Action

28. Within one month of my final decision the Council will:
• apologise to Miss X for the avoidable frustration, worry and uncertainty caused by the fault I have identified above; and
• pay Miss X £350 to recognise that distress.
29. Within three months of my final decision the Council will:
• review its policy about savings for looked after children to ensure this meets the requirements of the statutory guidance, sets out how and when any savings should be held or invested, and is published appropriately;
• review the information it provides to young people leaving care about their savings. The Council should ensure it can provide clear information and advice about young people’s savings and that they are involved in decisions about their savings before leaving care; and
• provide a briefing or training for relevant staff, including independent reviewing officers, on the policy and how this should be implemented in practice.
30. The Council should provide us with evidence it has complied with the above actions.
31. We publish guidance on remedies which sets out our expectations for how organisations should apologise effectively to remedy injustice. The organisation should consider this guidance in making the apology I have recommended in my findings.

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Decision

32. I find fault causing injustice. The Council has agreed actions to remedy injustice.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman