Summary: Mr X complained the Council failed to provide him with sufficient information regarding how the Special Guardianship allowance would be calculated and did not explain that it would be means tested. Mr X also complained the Council did not respond to his queries regarding the calculation of the allowance. The Council’s failure to provide clear and consistent information regarding the way in which the special guardianship allowance is calculated and how means testing would affect Mr and Mrs X amounts to fault. This fault has caused Mr and Mrs X an injustice.

The complaint

The complainant, whom I shall refer to as Mr X complained the Council failed to provide him with sufficient information regarding how the Special Guardianship allowance would be calculated and did not explain that it would be means tested. Mr X complained the Council did not respond to his queries regarding the calculation of the allowance. He asserts the Council’s failure meant they were unable to make informed decisions about how to manage their finances.

Mr X also complains that having upheld his complaint the Council has recalculated the allowance and is seeking to recover an overpayment of £14,000, without taking account of the financial impact the Council’s error has had on him.

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The Ombudsman’s role and powers

1. 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)
2. 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)
3. 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

4. As part of the investigation, I have:
• considered the complaint and the documents provided by Mr X;
• made enquiries of the Council and considered the comments and documents the Council provided;
• discussed the issues with Mr X;
• Mr X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Special Guardianship

5. A Special Guardianship Order (SGO) is a court order that gives a carer parental responsibility for a child. The Special Guardianship Regulations 2005 set out the Council’s duties when an SGO is made including possible support services such as counselling, advice, information, and financial support.
6. In cases where the special guardian was the child’s foster carer immediately prior to the making of the SGO, the council must complete an assessment for special guardianship support services, including financial support. The financial support provided is called Special Guardianship Allowance. The regulations set out how this should be calculated and that it should have regard to the amount of fostering allowance which would have been paid if the child continued to be fostered. The assessment must also take account of the child’s needs and the family’s financial resources, including benefits and outgoings.
7. If the Council pays special guardianship order allowance, it must review the payments at least once a year.

What happened here

8. Mr and Mrs X do not live in Plymouth. They have been foster carers for their home authority for many years. In 2007 Mr and Mrs X approached the Council regarding caring for two young children, Y and Z. Mr and Mrs X had initially wanted to foster the children on a long term care basis but the Council refused. The Council placed Y and Z with Mr and Mrs X under an interim care order in June 2008 and in May 2009 Mr and Mrs X were granted SGOs.
9. As part of the special guardianship proceedings, the Council filed a support plan with the court which noted Mr and Mrs X would require ongoing financial assistance in the form of an allowance. The plan states a means test has been completed, the outcome of which is that Mr and Mrs X are eligible for the Special Guardianship Allowance. It notes that the allowance will be ongoing for two years from the date of the placement and will then become subject to yearly means tests. Unless there is a significant increase to their household income, the payments will continue for the duration of the SGO.
10. The Council asked Mr and Mrs X to complete financial forms setting out their income and expenditure each year between 2010 and 2017. In August 2018 the Council wrote to Mr and Mrs X at the wrong address, so they did not receive and therefore could not complete the finance form. The Council then wrote to Mr and Mrs X in October 2018, again at the wrong address advising that as they had not completed and returned the finance form, the allowance payments would stop with immediate effect.
11. As Mr X had not received either letter, he contacted the Council to query why the payments had stopped. The Council sent Mr X a copy of the form to complete and advised:

“Following our telephone conversation today about the allowance you currently receive under the Adoption Support Regulations 2005 or Special Guardianship regulations; the allowance that you receive will now need to be means tested.”

12. In January 2019 Mr X made a formal complaint that they had never been told the allowance was means tested, and that the Council had never answered his queries about the allowance. He also complained that the Council had not reinstated the allowance. The Council responded to Mr X’s complaint and noted the SGO report and SGO support plan both clearly state the allowances would be means tested on an annual basis.
13. The Council noted that as part of the annual means test assessment Mr X is required to sign a declaration form which includes the statement that he understands that any financial allowance award is subject to a means test. The Council concluded Mr X was aware the payments would be means tested and that the outcome of the financial assessments was correct.
14. It acknowledged it had not followed due process in reinstating the allowances and apologised for this error. Payments would now recommence on 22 February 2019 and would be backdated to include the missed payments. The Council also offered to pay Mr X £200 in recognition of the error and any distress caused.
15. As Mr X was not satisfied with the Council’s response, and did not agree with the Council’s calculations, which significantly reduced the allowances, he asked for his complaint to be considered further. The Council arranged a meeting in late April 2019 to discuss Mr X’s concerns. The minutes of this meeting record Mr X stated they had never been advised that the allowance would be means tested, how the allowance was calculated or why the amounts were adjusted. He asked for a breakdown of the last ten year’s assessments, showing how the allowance had been calculated each year.
16. Mr X also stated that had the Council explained the financial assessment properly, they would have chosen to defer their pensions and would not have rushed to pay off their mortgage so quickly. He noted they had been told their allowance would not change unless they won the lottery.
17. The Council confirmed it was reviewing the SGO process and developing training. This would include all social workers being fully transparent around the financial element of an SGO. It also reiterated that the support plan written at the time the SGO was granted did record that the allowance would be annually means tested.
18. Following this meeting the Council agreed to escalate Mr X’s complaint to stage two of the complaints procedure. The stage 2 investigation considered five heads of complaint:
1. The Council did not provide Mr and Mrs X with adequate information or assessment of the children’s needs at the time they applied for SGOs;
2. Contrary to the Special Guardianship Support Plan, the Council has never reviewed the support plan;
3. Mr and Mrs X were not provided with sufficient information regarding how the special guardianship allowance would be calculated, including being subject to an annual means test, resulting in them not being able to make an informed choice as to whether or not to proceed with the SGO applications;
4. The Council failed to respond to Mr and Mrs X’s enquiries regarding how the allowances were calculated over a ten-year period; and
5. The Council had not made the backdated special guardianship allowance payment or paid the £200 compensatory payment.
19. The investigating officer partially upheld complaint 1, upheld complaints 2, 3, and 4 and made no finding on the fifth complaint as the matter was now resolved. They also made a number of recommendations, including:
• A review of how Mr and Mrs X’s special guardianship allowances have been calculated over the past 10 years, and the base allowance used to calculate these. Any discrepancies should be addressed without delay.
• A review and overhaul of the Council’s case recording policy in relation to how information is recorded in special guardianship cases.
• Ensuring front line workers and managers are familiar with the Good Practice section in Appendix 1 of the Council’s Special Guardianship policy and that any training delivered includes financial services staff.
• Updating the financial allowance form to clearly state the allowances are means tested. And
• Developing a clear policy/ practice guidance note to explain what means testing entails and sharing this with those who will be in receipt of means tested allowances
20. The Council accepted the investigating officer’s findings and agreed to carry out a full review and reassessment of the SGO allowances. The Council then wrote to Mr and Mrs X in November 2020 with the outcome of the review of the SGO allowances. It explained it had identified a number of discrepancies with regard to their income.
21. The Council noted Mr X and Mrs X had at various points over the previous ten or so years received rent from members of their family in the form of housing benefit. As rent is a source of income, details of the rent charged needed to be taken into account in assessing the special guardianship allowance. The Council used information obtained from the authority paying the housing benefit to recalculate the allowances.
22. The reassessments did not affect the allowances for the first two years but determined that in subsequent years the Council had either overpaid or underpaid the allowances. In respect of allowances paid for Y this resulted in a total overpayment of £7,109.04 and for Z, a total overpayment of £9,314.66. The Council did not propose to recover overpayments made by Council error which reduced the overpayments for Y to £6,325.86 and for Z to £7,716.54.
23. The Council advised Mr and Mrs X it intended to recover the total net overpayment of £14,042.40 by offsetting it against ongoing payments. It also offered to pay Mr X £500 in recognition of the lack of clarity throughout the SGO process.
24. Mr X is unhappy with the Council’s conclusions and has asked the Ombudsman to investigate his concerns. He complains that although the Council upheld his complaints and accepted they were not properly advised the allowances would be means tested it has not adequately considered the impact of this error on them.
25. In response to our enquiries the Council states it has always advised Mr and Mrs X that the allowance is means tested. It was stated in the initial support plan in November 2008 and each annual financial form completed includes a declaration that the applicant is making a full statement of their financial situation.
26. The Council does not accept any responsibility for decisions made about the management of Mr and Mrs X’s finances. If Mr and Mrs X had asked for advice the Council states it would have provided it. But there is no record of Mr and Mrs X asking for advice regarding paying off their mortgage or drawing early pension. The Council does not consider Mr and Mrs X were disadvantaged by paying off their mortgage early as this meant they had more disposable income.
27. In relation to Mr X’s assertion that he was told he would continue receive an allowance unless he won the lottery, the Council states the level of award was not agreed, just the fact they would be eligible for an allowance which would be means tested.

Analysis

28. In 2018, we published a focus report, ‘Firm Foundations: complaints about council support and advice for special guardians’. The report highlights the importance of councils following the right steps when working with special guardians to ensure they receive the right advice and support. This built upon the guidance we provided in an earlier related focus report published in 2013.
29. The Council states it has always advised Mr and Mrs X that the allowance is means tested, but the documentation does not support this assertion. There is no evidence of clear and consistent advice about the allowance being means tested, what this means or how the allowance is calculated.
30. The Council’s stage one response to Mr and Mrs X’s complaint states Mr X signed a declaration form with each annual financial assessment confirming he understood that any financial allowance award was subject to a means test. This is not correct. The financial assessment form makes no reference to the allowance being means tested. Nor, until late 2018 do the covering letters sent with these forms.
31. The stage two investigating officer noted that there were only two occasions between 2008 and 2018 when the Council referred to the allowances being means tested. The first was in June 2008, prior to the SGO being granted, when it notified Mr and Mrs X of the allowances and stated: “means assessments will be reviewed annually”. The second occasion was the letter of November 2018 referred to in paragraph 12 above which stated: “the allowance that you receive will now need to be means tested”.
32. The reference to the allowance now needing to be means tested suggests this is a change to what happened previously and adds to the lack of clarity around how the allowance is calculated.
33. Although Mr and Mrs X do not live in Plymouth, as Y and Z were looked after children immediately before the SGO was granted, the Council remained responsible for the provision of support for three years from the date of the order. The Special Guardianship support plan stated the Council would review the plan annually, however, the Council did not review the plan at all during these three years. Had these reviews taken place Mr and Mrs X would have had the opportunity to discuss and raise any queries they had regarding the allowances. And the means testing of the allowance and what this meant for Mr and Mrs X could have been identified much sooner.
34. I consider the failure to provide clear and consistent information regarding the way in which the special guardianship allowance is calculated and how means testing would affect Mr and Mrs X amounts to fault. This fault meant Mr and Mrs X were unable to make informed decisions around managing their finances before entering into the SGO or subsequently, as their circumstances changed.
35. I recognise the annual finance form asks for details of income from lodgers, and that Mr and Mrs X did not provide information about the payments they received from adult family members who periodically lived with them. The Council disputes that the failure to declare this income was due to a lack of knowledge about how the allowance was calculated. It also asserts that Mr and Mrs X did not declare their full income due to a desire to maximise the award. However, I consider it more likely that the failure to declare various aspects of their financial position was due to confusion arising from a complex and unfamiliar set of rules and entitlements and a lack of clear explanations from the Council.
36. Two of Mr and Mrs X’s former foster children remained with them after they turned 18, under the staying put scheme. Mr X states their home authority offset the housing benefit their former foster children were entitled to from the staying put allowance they received. They did not therefore consider the housing benefits were rent payments, but rather that they were part of the staying put allowance.
37. The Council’s calculations show the most significant changes in Mr and Mrs X’s finances occurred when they had paid off their mortgage and Mrs X drew her pension. These events resulted in a large increase in their disposable income, which as a result of the means testing, led to an equivalent reduction in the allowance. Had Mr and Mrs X understood the impact the decision to pay off their mortgage early and to draw the pension would have on the allowances, I consider it more likely than not they would have made different decisions.
38. Had Mr and Mrs X made smaller monthly mortgage payments over a longer period, the rental income may have meant that at some points they did not receive the full special guardianship allowance. But Mr and Mrs X would have been in a position to anticipate any reduction and manage their finances to ensure they were not left in any difficulties. They would also not now be faced with a bill of over £14,000 and effectively no financial support while they continue to care for Y and Z.
39. In the circumstances I am not persuaded Mr and Mrs X should be expected to repay the full overpayment. I consider there are too many variables to be able to accurately calculate, but for the fault, the level of allowance Mr and Mrs X would have received each year. I cannot assess the level of any disposable income Mr and Mrs X would have had each year had they utilised the full period available to pay off their mortgage, rather than significantly overpaying each month. Nor is it appropriate to speculate on the possible impact of the many other financial decisions they would have made over a ten year period.
40. I recognise that to waive the full amount of the overpayment would likely place Mr and Mrs X in a better position than they would have been but for the fault. I therefore recommend a proportion is written off.
41. In relation to service improvements, I am pleased to note the Council is reviewing its practice and policies around SGOs and will consider the recommendations and suggestions in the stage two reports a part of the review.

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Agreed action

42. To remedy the injustice caused the Council has agreed write off £7,000 in overpayments of Special Guardianship allowances for Y and Z. The Council should provide Mr and Mrs X with an extended repayment option for the remaining sum to ensure the amount is affordable and does not cause financial hardship.
43. The Council should take this action within one month of the final decision on this complaint. It should at that stage confirm the amount Mr and Mrs X have already repaid and the balance outstanding.

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Final decision

44. The Council’s failure to provide clear and consistent information regarding the way in which the special guardianship allowance is calculated and how means testing would affect Mr and Mrs X amounts to fault. This fault has caused Mr and Mrs X an injustice.

Investigator’s final decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman