Summary: Mr Y complains about the care provider’s decision to impose an additional charge for care provided over a baseline limit of 25 hours per week. The contract signed by Mrs X did not refer to any baseline limits. Furthermore, there is no record of a review of Mrs X’s care needs which evidenced an increase in her care needs or quantified the amount of care she needed. There is fault in the actions of the care provider which caused injustice to Mrs X and other residents who have received additional charges for care provided over the limit imposed in April 2023. The care provider should implement the remedy we have recommended at the end of this statement.

The complaint

1. Mr Y complains about the care provider’s decision to impose a limit of 25 hours of care provision per week. Any care provided in excess of the 25-hour limit incurs an additional fee which Mr Y says is not transparent and was not in accordance with the terms of Mrs X’s contract.

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The Ombudsman’s role and powers

2. We may investigate a complaint on behalf of someone who has died or who cannot authorise someone to act for them. The complaint may be made by their personal representative (if they have one), or someone we consider to be suitable. (Local Government Act 1974, section 26A(2), as amended)
3. 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)
4. Part 3 and Part 3A of the Local Government Act 1974 give us our powers to investigate adult social care complaints. Part 3 is for complaints where local councils provide services themselves. It also applies where a council arranges or commissions care services from a provider, even if the council charges the person receiving the care. In these cases, we treat the provider’s actions as if they were council actions. Part 3A is for complaints about care bought directly from a care provider by the person who needs it or their representative, and includes care funded privately or with direct payments using a personal budget. (Part 3 and Part 3A Local Government Act 1974; section 25(6) & (7) of the Act)
5. We investigate complaints about adult social care providers and decide whether their actions have caused an injustice, or could have caused injustice, to the person making the complaint. I have used the term fault to describe such actions. (Local Government Act 1974, sections 34B and 34C) If an adult social care provider’s actions have caused an injustice, we may suggest a remedy. (Local Government Act 1974, section 34H(4))
6. 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

7. During my investigation I discussed the complaint with Mr Y and considered the information he provided.
8. I made enquiries of the care provider and considered its response.
9. Mr Y and the care provider had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.
10. Under our information sharing agreement, we will share this decision with the Care Quality Commission (CQC).

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What I found

What should happen

Competition and Markets Authority guidance

11. The Ombudsman can interpret contracts on an ordinary reading. The strict interpretation of a contract is for the courts. However, the Ombudsman can look at a contract on ordinary reading and examine how it appears to a reasonable member of the public.
12. The Competition and Markets Authority (CMA) produced guidance in November 2018 called ‘Care Homes: consumer rights for residents and their families’. This provides an overview of a service user’s right under consumer law. The guidance contains the following key principles.
• The terms and conditions within a care home contract must be written simply and clearly. The terms must be written and agreed with the person in a fair and open way.
• If a contract term is unfair, it will not be valid, and the care home cannot hold the service user to it.
• Unfair terms include those which put the service user at an unfair disadvantage, for example if the contract gives the care home more rights than you.
• Unfair terms include those which allow the care home to make unexpected changes to the fees.
• The terms should clearly explain the circumstances in which the fees may change and how those changes will be calculated. This includes where there is an annual review of the fees or where the care needs change significantly.
• If the contract gives the care home an unlimited right to increase the fees or make unexpected changes, this is likely to be unfair.
13. The CMA also produced guidance in 2021: UK Care Homes – Advice on Consumer Law. This says that changes can be made to fees when:

“The resident’s care needs change (for example, where they will require increased levels of care which mean you incur additional costs in meeting their needs), but residents should also receive a reduction in fees where their care needs reduce. There must be a significant and demonstrable change in the resident’s care needs to justify an increase in price for this reason; where you assess changes by reference to care ‘bands’, these should be limited, and clearly defined according to significant steps in increasing care needs”.

“To ensure compliance with the law, you should be able to evidence and justify a decision to increase fees due to a change in care needs (for example, through the use of recognised accredited dependency tools) and any increase must be reasonable and proportionate to the resident’s needs. Where you anticipate or assess that a resident’s needs have changed (eg through informal or responsive monitoring), you should engage in meaningful and transparent consultation with them and their representatives and give them advance written notice (eg 28 days) before implementing a change in fees (including the reasons), so they can challenge your decision or avoid the increase if they wish”

CQC Fundamental standards of care

14. The Care Quality Commission (CQC) is the independent regulator of health and social care services in England. The CQC’s Fundamental Standards are the standards below which care should never fall. Regulation 19 of the Care Quality Commission (Registration) Regulations 2009 sets out the obligations to ensure that care providers give timely and accurate information about the cost of their care and treatment to people who use services.
15. To meet this regulation, providers must make written information available about any fees, contracts and terms and conditions, where people are paying either in full or in part for the cost of their care, treatment and support.
16. Providers must notify people of any changes to their terms and conditions, including increases in fees and give them sufficient time to consider whether they wish to continue with the service.

What happened

17. Mrs X was a resident at Moors Park House from 2022 until her death in mid-2023. The contract signed by Mrs X upon her admission in 2022 contained the following term:

“..the fees shall be reviewed as necessary to take account of the inflationary costs in line with retail price index or upon a change in the care needs of the resident. Four-week's written notice shall be given to the resident of any change in fees”.

18. In October 2022 the care provider wrote Mrs X’s son, Mr Y. This said:

“… Moors Park House average fees were already below the regional average of £1,035 per week for the South West….. Given that the majority of residents at Moors Park have complex needs including dementia and our staffing levels reflect this, our fees in some cases will be more than this benchmark. We charge an additional amount in excess of the room rate where care exceeds 25 hours per week and this is 0.0 for [Mrs X]”

“From 1st December 2022 the fee for [Mrs X] will be £1,044 per week”

19. Mr Y received a further letter on 3 March 2023 to give notice of the care provider’s intention to increase Mrs X’s care fees again. The letter said:

“Devon County Council have given provisional notice of their increase from April and Torbay is expected to follow suit. The Devon uplift is 10.38%. We propose to apply this same uplift to all private fees. We also charge according to the room and an additional amount for clients who require care of more than 25 hours per week so that this is not subsidised by clients with lower needs.

The new fee payable monthly for [Mrs X] will be £5,167.41 (£1,192.48 per week). This includes the additional care of 0.78 hours per week and room fee. Please amend your standing [order] from 1st April…”

20. Mr Y raised concerns with management on 14 March. By the end of March, the care provider confirmed its view that the increase was correct and in line with the terms of Mrs X’s contract. Dissatisfied with the explanation, Mr Y raised a formal complaint on 6 April.
21. The care provider responded to the complaint on 26 May. In summary it said:
• the contract states that fees can be reviewed upon a change in need of the resident. The change does not need to be significant;
• the 25 hour per week threshold is not “hard coded” into the contract because it might be revised, up or down;
• the additional fee is to ensure that those with higher needs are not materially subsidised by service users with lower needs;
• at present, the threshold is set at 25 hours per week. The care provider uses a computer-based management program to assess the total care requirement for each resident per week;
• this approach “provides for a graduated fee scale proportionate to the needs of individual clients subject to a baseline currently set at 25 care hours per week”; and
• the additional charge is not hidden, and the letter sent on 3 March provides a clear explanation of how the fee is calculated.
• Mrs X’s care was previously assessed as just below 25 hours and currently is just above. The care provider is transparent in its charging.
22. Dissatisfied with the care provider’s response, Mr Y approached the Ombudsman.

Was there fault causing injustice to Mr Y and Mrs X?

23. On ordinary reading of Mrs X’s contract, and after considering the care provider’s response to our enquiries, it is my view that the care provider acted with fault for the following reasons.
• The contract signed by Mrs X in 2022 was not transparent about the baseline level of care imposed by the care provider. The care provider has since agreed to amend the relevant contract term as follows: “that the fees shall be reviewed as necessary to take account of the inflationary costs in line with the retail price index or upon a change in the care needs of the resident. Four week’s written notice shall be given to the resident of any change in fees. We use a digital care management system that assesses the amount of care required and currently the base fee includes care up to a threshold of 25 hours per week. If the care assessment is above 25 hours per week then an additional fee will be levied at an hourly rate which will be reviewed from time to time”.
• There are 18 other affected residents who receive more than 25 hours care per week. We do not know how many of those have signed the amended contract to confirm their agreement to this term.
• The care provider gave itself the right to increase fees in the event of a marginal change in a resident’s needs. This approach is not in accordance with the CMA guidance which suggests that fee increases should be imposed when the change in need is demonstrable and significant.
• The way in which the care provider has imposed the 25-hour weekly limit, and decided which residents exceed it, is not transparent. The care provider has pointed to a review of Mrs X’s care needs undertaken on 24 March; 21 days after it sent the letter notifying Mr Y of the fee increase. There is no documented evidence of a significant and demonstrable increase in Mrs X’s care needs between October 2022, when the provider said her needs did not exceed 25 weekly hours, and April 2023 when the care provider imposed the additional charge.
• The care provider’s review of Mrs X’s care needs on 24 March contains no reference to the number of hours care she needs per week. Nor does it explain the extent to which her care needs increased in the year following her admission. Similar concerns were echoed by CQC during an inspection in August 2023: “People's care plans were not always updated when their level of need changed”.
• The care provider did not engage in meaningful and transparent consultation with Mrs X’s family when it decided that her needs had increased to a level which justified the additional fees.
• Based on the recent findings of CQC, it appears the care provider did not increase staffing levels despite the additional funding. Therefore, it is not clear how those with higher levels of need are being appropriately and safely cared for. The CQC inspection report published in August 2023 concluded, “There were not always enough staff to meet people's needs. This was a breach of regulation 18 of the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014”. The inspection also found, “Whilst the provider used a dependency tool to assess how many care hours each person required, they did not use this to influence staffing levels”.
24. The care provider’s actions caused injustice to Mrs X because it charged additional fees in circumstances when, in our view, it should not have done. The provider has agreed to refund Mr Y for those fees. The provider has also agreed to amend the wording of its contract terms to ensure that any increases are applied fairly and transparently, and that other affected residents have the right to decline the new contract term.
25. Section 34E of the Local Government Act 1974 gives us the power to investigate matters coming to our attention during an investigation of a care provider if we think a member of the public has suffered an injustice as a result. The information I have seen so far suggests 18 other residents may be experiencing an injustice as a result of the fault we have identified.

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Recommended action

26. We have the power to make recommendations to remedy the injustice experienced by complainants and members of the public affected by fault we identify (Local Government Act 1974 s 31(2B)). I have set out below the actions the care provider should take to remedy the injustice to Mr Y and those people who are also caused an injustice by the care provider’s fault.
27. Within four weeks of our final decision the care provider should provide evidence to show it has:
• apologised and paid £100 to Mr Y for the avoidable time, trouble and frustration caused by the fault identified;
• refunded the additional fees paid by Mrs X for care provided over the threshold between April 2023 until her death; and
• refunded the additional fees paid by the other residents who received charges for additional care provided over the threshold. The refund should cover the period between 1 April 2023 until the date upon which those residents signed the new contract with updated terms and conditions.
28. At the time of writing this final decision the care provider has not agreed to complete our recommended actions.

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Final decision

29. I have completed my investigation and upheld Mr Y’s complaint. I have made recommendations to remedy the injustice caused but the care provider has not yet agreed to carry out those recommendations.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman