Summary: Ms X complains on behalf of Ms Y in her capacity as Mrs Z’s court appointed deputy for property and financial affairs. Ms X complains the Council did not include deputyship fees in Mrs Z’s financial assessment as an allowable expense and it intended to take Ms Z’s capital below that allowed in statutory guidance to clear a debt she owed to the Council. We found fault in the way the Council decided to recover the debt from Mrs Z, calculated her financial assessment and failed to consider the deputyship fees as an allowable expense. These faults caused Mrs Z an injustice which cannot be remedied as she has since died. The Council accepts our recommendations it should make changes to its charging policy when considering requests for including deputyship fees in financial assessments.

The complaint

1. Ms X complains on behalf of Ms Y in her capacity as Mrs Z ‘s court appointed deputy for property and financial affairs. Ms X complains about the Council’s handling of Mrs Z’s financial assessment and says the Council refused to include deputyship fees as a personal expense. Ms X says this meant Mrs Z did not have sufficient income to pay the fees and no capital leaving her at a financial disadvantage.

1. Ms X also complained about the Council’s decision to require Mrs Z to repay outstanding client contributions towards her care home fees from 2018 to 2020 which takes nearly all her capital causing financial difficulties.

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The Ombudsman’s role and powers

2. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, we 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. We 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)
3. 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)
4. We may investigate matters coming to our attention during an investigation, if we consider that a member of the public who has not complained may have suffered an injustice as a result. (Local Government Act 1974, section 26D and 34E, as amended)
5. 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)

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How I considered this complaint

6. I have read the papers submitted by Ms X and spoken to her about the complaint. I considered the Council’s comments on the complaint and the supporting documents it provided.
7. Ms 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

Deputyship

8. If somebody lacks the mental capacity to make decisions for themselves the Court of Protection may appoint a deputy to make decisions for that person. A deputy is usually a friend or relative of the person who lacks capacity, but in some circumstances, it could be a professional such as a solicitor or accountant, or another professional appointed by the court.
9. There are two types of deputy.
• Property and financial affairs where the deputy will do things like pay a person’s bills or organise their pension.
• Personal welfare where the deputy will make decisions about medical treatment and how someone is looked after.
10. Professional deputies will charge for their time, and their fees are normally paid out of the person’s finances. Practice direction B of the Court of Protection Rules 2007 outlines the fees a professional deputy may take each year for managing a client’s finances (called fixed fees).
11. The maximum amount of fixed fees for a solicitor appointed as a deputy for property and financial affairs is:
• £1,670 plus VAT for the first year.
• £1,320 plus VAT for the second and subsequent years.

Where the net assets of the person fall below £16,000, the professional may take an annual management fee not exceeding 4.5% of the person’s net assets.

12. The Office of the Public Guardian (OPG) is there to protect people who lack the mental capacity to make decisions for themselves. The Court of Protection and the OPG are the same institution however they have different functions. The court makes decisions about things like deputyship and the OPG takes care of administration and supervises deputies appointed by the court. If anybody has concerns about a deputy, they can contact the OPG. This could be concerns about misuse of money or concerns that the deputy is not acting in the person’s best interests.

The Care Act 2014

13. In 2015, the Government introduced the Care Act. This legislation replaced all previous guidance about how councils assess and provide care for adults in need. It includes guidance on charging for care.
14. Sections 9 and 10 of the Care Act 2014 say councils must assess the needs of an adult who appears to need care and support. The council must do this regardless of whether it thinks the person has eligible needs and regardless of the person's finances. Following an assessment, the council must decide which needs are eligible for their support. If the council provides support, it must produce a written care plan.
15. Councils must assess a person’s finances to decide what contribution they should make to a personal budget for care. There are differences in how income is treated in a care home and in other settings, such as receiving care at home.
16. The charging rules for residential care are set out in the “Care and Support (Charging and Assessment of Resources) Regulations 2014”, and the “Care and Support Statutory Guidance 2014”. When the council arranges a care home placement, it has to follow these rules when undertaking a financial assessment to decide how much a person has to pay towards the costs of their residential care.
17. The rules state that people who have over the upper capital limit of £23,250, are expected to pay for the full cost of their residential care home fees. However, once their capital has reduced to between £14,250 and £23,250, they are expected to pay £1 for every £250, or part thereof, between the two figures towards their placement. This is called ‘tariff income’. So, the council must assess the means of people who have less than the upper capital limit, to decide how much they can contribute towards the cost of the care home fees. If a person’s assets are valued at less than £14,250, they will not have to contribute from those assets.
18. Section 8.9 of the guidance says ‘where a person lacks capacity, they may still be assessed as being able to contribute towards the cost of their care. However, a local authority must put in place policies regarding how they communicate, how they carry out financial assessments and how they collect any debts that take into consideration the capacity of the person as well as any illness or condition. Local authorities are expected to use their social work skills both to communicate with people and also, to design a system that works with, and for, very vulnerable people’.

The Personal Expenses Allowance (PEA)

19. People in a care home will contribute most of their income, excluding their earnings, towards the cost of their care and support. However, the council must leave the person with a specified amount of their own income, so they have money to spend on personal items such as clothes and other items that are not part of their care. This is known as the personal expenses allowance (PEA). The PEA must not be used to cover any aspect of their care and support that is assessed as necessary to meet the person’s eligible needs. The current level of PEA is £24.90 a week. Councils have discretion to apply a higher income allowance in individual cases.
20. Neither councils or care providers have the authority to require residents to spend their PEA in particular ways and, as such, should not do so.

Recovering a debt

21. A council may use its powers under the Care Act to recover a debt. But in deciding how to proceed it should consider the circumstances of the case before deciding whether it was a deliberate avoidance of paying or due to circumstances beyond the person’s control. The council can ultimately issue County Court proceedings to recover the debt. But it should only use this power once all other reasonable alternatives have been exhausted.
22. Annex D of the Care and Support Statutory Guidance 2014 (Guidance) on recovery of debts says councils will want to bear in mind the following principles when approaching the recovery of debt.
• Possible debts must be discussed with the person or their representative.
• The local authority must act reasonably.
• Arrangements for debt repayments should be agreed between the relevant parties.
• Repayments must be affordable.
• Court action should only be considered after all other reasonable avenues have been exhausted.
23. Annex D says local authorities should also bear in mind they are bound by the public law principle of acting reasonably at all times, and must act in accordance with human rights legislation, as well as the wellbeing principle set out in the Care Act. A local authority should also consider whether it is appropriate to recover the debt as it does not have to, or it may wish to only recover part of the debt.

The Council’s Charging Policy for Education, Health and Social Care Services 2016

24. The Council’s policy sets out income and capital to be taken into account in the financial assessment including state pension and tariff income on savings between the lower capital threshold and the upper capital threshold. It also sets out specific categories of expenditure which it takes into account when carrying out the financial assessment. It says it will include current bank accounts as capital.
25. The policy says the Council will considers a person’s means and will not require them to pay any more than is reasonably practicable. This may mean the person will pay either a reduced charge or no charge for the service.
26. The Council will not withdraw services from a person if they do not pay their contribution. Unpaid contributions are treated as a civil debt and the Council follows its debt recovery policy. It says it will also have regard to the principles in the Guidance in Annex D underpinning the approach to debt recovery. Appendix 5 of the Council’s policy outlines the actions it will take to recover debts. The policy says the Council should discuss with the person or their representative what payment plans can be put in place to repay the debt and what assistance is available for advice on debt management.

What happened

27. Mrs Z had been living in a care home since 2010. She lacked capacity to make decisions and Ms B, a relative, held power of attorney for her from 2010. Mrs Z owned a property which she sold in 2011, and Ms B paid her care home fees from Mrs Z’s bank account. Mrs Z’s funds were over the upper capital threshold, so the Council assessed her as being able to self-fund her care home fees. It considered she had enough funds to pay for her care until 15 January 2018.
28. In January 2018 Ms B stopped paying Mrs Z’s care home fees. Ms B told the Council Mrs Z had less than £23,250 but did not provide any bank statements to enable the Council to assess whether it could help her with funding. The Council paid Mrs Z’s fees to secure her care home placement as her funds could not be accessed. Due to concerns about Ms B’s actions the OPG removed her as Mrs Z’s attorney. The Court of Protection appointed Ms Y, a solicitor from a firm I will refer to as J solicitors, as Interim Deputy for Mrs Z for property and finance in July 2018.
29. The Interim Order from the court gave Ms Y authority to take possession or control of Mrs Z’s property and affairs. The order required Ms Y to keep statements, vouchers, receipts, and other financial records and to submit a report to the OPG as and when required.
30. For cost and expenses, the order stated;

“The interim deputy is entitled to receive fixed costs in relation to this application, and to receive fixed costs for the general management of (Mrs Z’s) affairs. If the interim deputy would prefer the costs to be assessed, this order is to be treated as authority to the Senior Courts Costs Office to carry out a detailed assessment on the standard basis.”

31. J solicitors told the Council Ms Y was appointed as Mrs Z’s deputy. From August 2018 onwards the Council tried to carry out a financial assessment of Mrs Z to calculate whether she needed to make a client contribution towards her care home fees. There were delays until J solicitors had full details of Mrs Z’s finances in June 2020. J solicitors said it believed Ms B had misappropriated £67,000 of Mrs Z’s finances by transferring the money to herself and her husband. This left Mrs Z with about £24,000 of capital and J solicitors were considering whether to pursue Ms B for the missing funds.
32. J solicitors gave the Council more information about Mrs Z’s finances and they were not intending to pursue Ms B for the missing funds. J solicitors said it was now up to the Council to pursue Ms B for the outstanding care home fee contributions she should have paid on behalf of Mrs Z.

Financial assessment June 2020

33. The Council completed Mrs Z’s financial assessment in June 2020. It said Mrs Z had an income of £221.53 a week from pensions. It listed her capital as £0 as it was “assumed as under the min threshold” and no property. The Council allowed Mrs Z the PEA of £24.90 and savings disregard of £5.75 each week. The Council calculated Mrs Z’s assessed weekly charge as £190.88 towards her care home fees from June 2020.
34. The Council wrote to J solicitors explaining how it had calculated Mrs Z’s weekly client contributions payable from January 2018 to June 2020. This amounted to £23,047.06. The Council sent J solicitors an invoice for the outstanding client contribution. The Council had paid all the care home fees but said it calculated Mrs X’s client contribution based on her income in 2018 which was similar to that in June 2020.
35. J solicitors expressed concern the Council was taking all Mrs Z’s remaining capital to repay her outstanding client contribution leaving her with £1,882.21. They asked the Council to reassess the weekly charge on the basis it had not deducted their deputyship fees from Mrs Z’s charges. J solicitors considered their fees should be an allowable expense having been appointed by the courts. J solicitors also asked the Council to allow for other expenses Mrs Z may have such as third-party payments and backdated allowances owed to the care home to keep some capital for her.
36. J solicitors said Mrs Z did not lack resources through her own fault but because of Ms B’s actions, and they had limited opportunity to recover funds on her behalf. They asked the Council to allow a further reduction in the ongoing assessment to cover their budgeted annual deputyship fees estimated at £3,000 plus VAT. J solicitors enclosed their invoices and payments made to show they exceeded the allowance the Council had allowed for.
37. The Council’s decision not to include deputyship fees has been subject to a reconsideration request and appeal from J solicitors to the Council. J solicitors say their deputyship fees should be deducted as an allowable expense by the Council when it calculates Mrs Z’s contribution to her care fees. This is because they have been appointed by the courts and can charge for their work. J solicitors say if the Council had been appointed as Mrs Z’s deputy it would have also made a charge so they should not be treated any differently.
38. J solicitors say the Council could not be appointed deputy in this case due to a conflict of interest as Mrs Z owed it money. They believe if Ms Y had not been appointed deputy for Mrs Z the Council would have been unable to reclaim the money she owed.

The Council’s response to the complaint

39. The Council says it carried out the financial assessment according to the legislative framework and its charging policy. It says its policy does not consider deputyship fees are an allowable expense to be deducted when assessing a person’s contribution. The Council considers it has correctly calculated Mrs Z’s contribution based on her income.
40. The Council confirms it based Mrs Z’s client contributions for January 2018 to June 2020, when it paid the amounts for her, on her income during that time. It did not include the £67,000 capital paid out by Ms B. It is aware the repayment will use most of her income already depleted by Ms B. But based on information from J solicitors the funds in Mrs Z’s accounts have built up from income she received during 2018 to 2020. So, she currently had enough funds available to pay the outstanding debt. And she would have been required to pay for her ongoing care during that time if she had been able to access her funds.
41. The Council says its general position is that third party debts (which include deputyship fees) are not usually deducted from income or added to the personal expenses allowance when calculating the client contribution for a person in a care home.
42. The Care Act 2014 Statutory Guidance provides that people in a care home will contribute most of their income towards the cost of their care and support. But a council must leave them with a personal expenses allowance. The Council says it allowed Mrs Z the personal expenses allowance as required. It says in some circumstances it is not appropriate for it to leave a person with only the allowance. The Council decides this on individual circumstances. It may allow it where a person has a dependent child or spouse, or property costs. But the Council understands Mrs Z has no property or dependent who would be caused hardship by leaving her with only the personal allowance.
43. The Council does not know on what basis J solicitors are charging fees to Mrs Z. But it has expressed concerns about the high level of fees being charged by J solicitors as they are more than the fixed costs.
44. The Council disagrees with J Solicitors’ view that it cannot be appointed as a deputy in a case where it is owed money by a service user. The Council does not consider it would be a conflict of interest as its duty would be to act in the service user’s best interests and according to the obligations imposed by the OPG. The Council suggests Ms Y may want to relinquish her deputyship if she considers it is not commercially viable for her. The Council could put in place a corporate deputyship for Mrs Z. As such the Council would have the responsibility to act in Mrs Z’s best interests by managing her welfare benefits to ensure everyday bills are paid and to report changes in circumstances to the Department for Work and Pensions. This would be at a lower or no cost to Mrs Z.

My assessment

Decision to recover the outstanding client contribution fees

45. Annex D of the Guidance refers to the recovery of debts by a council. The principles are that a council should act reasonably and consider whether to recover the whole debt or part of it based on the circumstances of a case. If a council decides to recover the debt it should also consider a repayment arrangement and ensure the instalments are affordable.
46. The Council’s policy says it should consider a repayment plan. The Council has not provided any evidence to show whether it considered the circumstances of the case and whether it should recover the debt or part of it from Mrs Z especially as she has not been responsible for the loss of her capital. There is also no evidence the Council considered or offered a repayment plan for the outstanding client contribution to Ms Y on Mrs Z’s behalf.
47. I consider there has been fault by the Council in pursuing the debt from Mrs Z. This is because as it has not been able to evidence it has followed the Guidance or its own charging policy when deciding whether to recover the debt from Mrs Z or offer a repayment arrangement. This caused an injustice to Mrs Z as repaying the debt would remove most of her capital and cause her financial difficulties.
48. However, Mrs Z has sadly died during my consideration of the complaint. So, any ongoing injustice caused to Mrs X by the Council’s decision to pursue the debt has now ended. Because of this I cannot remedy this injustice to her now. Mrs X’s estate is being administered by executors of her will. So, it is a decision for the Council whether it wishes to recover the debt from Mrs X’s estate and offers a repayment arrangement.

Financial assessment

49. The Council was aware of Mrs Z’s outstanding client contribution fees when it carried out the financial assessment in June 2020. At that time Mrs Z had about £24,000 in her bank account from her income. The Council expected her to use nearly all this money to repay a debt of £23,000. The Guidance says capital can be income from bank accounts so Mrs Z’s bank account should be regarded as capital. When assessing what a person can afford the Guidance requires a council to apply the upper and lower capital limits. The upper limit being £23,250 and the lower limit £14,250. If a person has between the upper and lower limits, then they should be deemed to be able to contribute towards care from ‘tariff income’. Any capital below the lower capital limit should be disregarded.
50. There was fault in the way the Council carried out Mrs Z’s financial assessment, which was contrary to the Guidance; it should leave her with at least the lower capital limit of £14,250. The Council should have applied the tariff income calculation to Mrs Z’s income when it was between the upper and lower capital limits. This is regardless of whether it considers there is no one who would suffer hardship by its actions.
51. The Council could reclaim Mrs Z’s debt through her benefits and income, and it is entitled to do so. But the Council could only do so if it does not take her below the capital threshold. I consider the Council’s fault in wrongly calculating her financial assessment caused an injustice to Mrs Z. This is because the Council’s actions left her with capital well below the limit required in the Guidance. It also meant Ms Z might not be able to pay her deputyship fees which the court has already ordered she will incur (even at a lower rate if the charges are found to be too high).

Deputyship fees

52. Ms Y was appointed by the Court of Protection as deputy for Mrs Z. Mrs Z did not have mental capacity to make her own decisions, therefore it is not her personal choice to continue paying Ms Y in her role as her deputy. The Court of Protection made this decision in July 2018, and Ms Y provided deputy services to meet a need arising from Mrs Z’s lack of capacity. Ms Y was under no obligation to relinquish her duty just because Mrs Z’s assets had reduced.
53. It is not for me, or the Council to decide whether it is necessary or appropriate for Ms Y to continue as Mrs Z’s deputy. That was for the Court of Protection to decide. It was open for the Council to make representations to the OPG if it believed Ms Y was either not acting in Mrs Z’s best interest or should relinquish her deputy duties. Therefore, Ms Y’s role as deputy was necessary in line with the Court of Protection’s decision. The Council’s decision-making for not including Mrs Z’s deputy fees as a personal expense was flawed as it failed to recognise Mrs Z had no choice or control over the need to pay deputyship fees. That is fault.
54. The guidance says professional deputy fees are usually paid out of the person’s finances or savings. It also says Council’s should allow care home residents to have money for personal use based on the outcome of a financial assessment of their resources. Where a court has ordered that someone should have a deputy, they have no choice but to incur costs associated with that. Therefore, it is fault for the Council not to take those costs into account when assessing their ability to pay their care fees. It caused an injustice to Mrs Z as she had no option but to incur the fees. However, as Mrs Z has died, I am unable to remedy this injustice to her.
55. The Council says its policy is not to allow deputyship fees as an allowable expense. But its charging policy does not mention this or explain why it does not currently include deputyship fees as an allowable expense. By applying a blanket policy, the Council is not considering the individual circumstances of each case when deciding whether or not to allow deputyship fees as an expense ( this is known as fettering its discretion) . This is fault by the Council as it should not fetter its discretion and its charging policy should clearly explain how it considers deputyship fees.
56. As paragraph five explains we may investigate matters coming to our attention during an investigation if we consider a member of the public who has not complained may have suffered an injustice. So, I consider it likely other people may have been affected by the Council’s approach not to include deputyship fees when calculating care home charges. To remedy any injustice caused in similar cases I consider the Council should review all other cases involving deputyship fees in the last 12 months in the light of my findings and reassess charges where necessary.

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Agreed action

57. Within one month of the final decision the Council has agreed to:
• Review its charging policy so it is clear on its position to allow deputyship fees in certain circumstances; and
• Review all other cases involving deputyship fees in the last 12 months in the light of my findings and reassess charges where necessary.
58. The Council should provide me with evidence of its decision making.

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Final decision

59. I am completing my investigation. The Council was at fault in the way it dealt with Mrs Z’s financial assessment and deputyship fees. This fault caused an injustice to Mrs Z which cannot be remedied as she has since died.

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Investigator's decision on behalf of the Ombudsman