Summary: Mrs L complained about the way the Council handled her mother, Mrs X’s direct payments. Mrs L said the Council was misleading and confusing in its communication and demanded payment Mrs X did not owe. The Council failed to provide clear and transparent financial information, incorrectly calculated Mrs X’s account three times and delayed in pursuing the debt for 20 months. The Council will write off Mrs X’s outstanding charges and pay Mrs X and Mrs L £200 each to recognise the frustration and uncertainty this caused.

The complaint

1. Mrs L complained about the way the Council handled her mother, Mrs X’s direct payments. Mrs L said the Council was misleading and confusing in its communication and demanded payment Mrs X does not owe. Mrs L said this has caused Mrs X confusion and distress and affected her quality of life.

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What I have and have not investigated

2. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended). The events in this investigation occurred in 2018 to 2020. I have investigated this complaint because Mrs L believed the matter was resolved in 2020, and complained to us once she realised it was not.

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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. I read the documents provided by Mrs L and discussed the complaint with her on the phone.
6. I considered the documents the Council provided in response to my enquiries.
7. Mrs L 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

Relevant legislation

Charging for social care services: the power to charge

8. A council has a duty to arrange care and support for those with eligible needs, and a power to meet both eligible and non-eligible needs in places other than care homes. A council can choose to charge for non-residential care following a person’s needs assessment. Where it decides to charge, the council must follow the Care and Support (Charging and Assessment of Resources) Regulations 2014 and have regard to the Care Act statutory guidance. (Care Act 2014, section 14 and 17)
9. Councils must ensure financial information provided to individuals is clear and transparent so people know what they will be charged and can understand any contributions they are asked to make. (Care and Support Statutory Guidance 2014)
10. Everyone whose needs the council meets must receive a personal budget as part of the care and support plan. The personal budget gives the person clear information about the money allocated to meet the needs identified in the assessment and recorded in the plan. The detail of how the person will use their personal budget will be in the care and support plan. The personal budget must always be enough to meet the person’s care and support needs. A personal budget can be paid as a direct payment. (Care and Support Statutory Guidance 2014)
11. The personal budget must specify:
• the cost to the council of meeting the person’s needs;
• the amount the person must pay towards the cost based on their financial assessment; and
• any amount the council must pay towards the cost.

Direct payments

12. Direct payments are payments made to individuals to meet some or all of their eligible care and support needs. They enable people to arrange their own care and support. If a person requests a direct payment the council should explain the direct payment agreement and how it will monitor the use of the direct payments. The council should support them to use and manage the payment properly. (Care and Support Statutory Guidance 2014, Chapter 12)
13. The council pays the personal budget minus the individual’s contribution to their care. For example; if the personal budget is £150 per week, and the individual’s contribution is £70 then the Council will pay £80 per week via direct payments.

The Council’s direct payment agreement

14. When the Council arranges direct payments with a person it issues a written agreement. The agreement sets out how direct payments work. This includes how the bank account should be managed and how both the Council and person receiving the direct payments should pay their contribution in to the account. It sets out what records the person should keep and when it will be audited.
15. It says at the end of the agreement the person must return any surplus funds in the direct payment account to the Council.

What happened

16. Mrs X is elderly and lives at home on her own. Mrs L is Mrs X’s daughter. When Mrs X needed support with living at home independently, she arranged her own care package and paid for it herself.
17. Mrs L contacted the Council in April 2018 and asked for financial support for Mrs X as she could no longer afford to pay for her own care. The Council completed a needs assessment in May 2018. It recorded Mrs X wanted a financial assessment. It identified Mrs X needed support in many areas of her life.
18. The Council produced a support plan in June 2018. It said Mrs X needed two visits from care workers a day for one and half hours in total. It did not provide an indicative budget. The Council completed a financial assessment and told Mrs X what her maximum weekly contribution would be. Mrs X arranged a personal assistant (PA) to provide her care.
19. Mrs X signed a direct payment agreement in September 2018.
20. The Council updated Mrs X’s support plan in October 2018. It recorded what Mrs X’s indicative budget was from 15 June 2018, the date it agreed to meet Mrs X’s care needs from.
21. The Council did not provide any direct payments until November 2018, until then Mrs X paid the full cost of the care. The Council paid Mrs X a back-payment of £1657.62 for the direct payments from June 2018 to November 2018. Mrs L said Mrs X left the back-payment in the direct payment account.
22. The Council completed an annual review of Mrs X’s contribution to her care. It said her contribution would decrease slightly from 6 April 2019.
23. The Council recorded in August 2019 that Mrs X did not understand how the direct payment system worked and she may have been better with a commissioned service. It wrote to Mrs X and said it had audited her direct payment account and she had not been administering it in accordance with the agreement. It said:
• she had not paid her contribution in to the account between 15 June 2018 and 29 March 2019 resulting in a client contribution debt of £444.89; and
• there was a top up debt of £393.60 because Mrs X had been paying her PA a higher rate than that funded by the Council; and
• Mrs X must arrange to pay the full debt of £838.49 within 21 days.
24. Mrs L said Mrs X did not make any additional payments into the direct payment account or to the Council as a result of this letter. Mrs X did pay her regular contribution in to the account from April 2019 onwards.
25. Mrs X told the Council in October 2019 she felt it had not advised her how to manage her direct payment budget or provided her any support to do so.
26. The Council reassessed Mrs X’s needs in October 2019 and updated her support plan. It said Mrs X needed a smaller care package. A financial assessment showed Mrs X’s contribution was higher than the cost of care and so the direct payments would stop on 8 November 2019.
27. The Council wrote to Mrs X in September 2020. It said it had completed an audit of her account (the second audit completed by the Council). It said she had overpaid her contribution by £280.55, and there were excess funds in the direct payment account of £1117.74. The Council told Mrs X she needed to pay back the excess funds, minus her overpayment - £837.19 in total.
28. Mrs L complained to the Council on Mrs X’s behalf. She said it asked Mrs X to repay £837.19 but had not provided any explanation of how or when the overpayment had happened.
29. The Council responded in October 2020 and apologised for the distress caused by its lack of explanation about the audit process. It said Mrs X owed £698.74 in contributions and top-up fees identified in the audit in 2019 and that should be paid from Mrs X’s personal account. It said Mrs X also needed to pay the Council the excess funds in the direct payment account of £837.19. This was £1535.93 in total.
30. Mrs L raised her complaint at stage two. She said:
• although Mrs X had not initially paid her contributions in to the direct payment account, she had used them to pay for her care which was shown in the care invoices;
• the excess funds in the account were the backdated direct payment made by the Council in October 2018 and was in fact Mrs X’s money; and
• the Council’s letter had caused more confusion rather than providing an explanation.
31. The Council responded to Mrs L at stage two in December 2020. It said it had completed an audit for the whole time Mrs X was receiving direct payments (15 June 2018 to 8 November 2019 – a third audit of Mrs X’s account). It said it had taken into account the back payment of direct payments. It said:
• Mrs X owed £291.60 as the invoices for her care between November and December 2018 were higher than the agreed personal budget;
• based on the invoices for Mrs X’s care the Council overpaid direct payments by £1,073.56;
• Mrs X paid £134.28 for an unauthorised service out of the direct payment account;
• there was a closing balance of £1117.74 in Mrs X’s direct payment account;
• Mrs X now owed the Council £1207.84, and it would issue an invoice.
32. The Council sent Mrs X an invoice for £1207.84 in January 2021.
33. Mrs X said she received a phone call from a Council Officer shortly after the stage two response and they said any invoice would be credited. Mrs X could not recall the name of the officer. The Council does not have a record of that call.
34. The Council contacted Mrs X on the phone in August and September 2022 to discuss the outstanding amount on the account. Mrs L complained to us in November 2022. Mrs L said she did not complain to us in December 2020 as she believed the matter was closed and neither she nor Mrs X heard anything further from the Council until August 2022.
35. In response to my enquiries the Council said it did not make any further contact with Mrs X between January 2021 and August 2022 due to a change in financial systems used by the Council.
36. The Council provided a copy of the direct payment agreement Mrs X signed in September 2018. The document is missing every other page. It does not contain all the information about the administration of the direct payments or what would happen to excess and surplus funds. The Council said it believed it was a scanning error after it had been signed, and all pages had been present when Mrs X signed it. Mrs X does not have a copy of the document.
37. During this investigation I have reviewed the Council’s audits of Mrs X’s accounts. In the final audit it calculated the invoices for Mrs X’s care to total £9,785. It did not include the invoice for the period 8 July 2019 to 4 August 2019 which was £560. Therefore, the total cost of the care was £10,345.

My findings

38. At the beginning of the direct payment agreement the Council did not provide its contribution, Mrs X was paying for all the care with her own money. However, she was paying the PA in cash rather than through a bank account. The Council later paid a lump sum into the account and Mrs X also began paying her contributions in. This made it difficult for the Council to clearly audit Mrs X’s direct payment account.

Was there fault in the Council’s actions?

39. The Council completed three audits into Mrs X’s direct payment account. Each audit identified a different amount Mrs X owed and different reasons for the debt. Although the first two audits covered different time periods there should have been correlation between the amounts and explanations provided in each audit. There was not and that was fault.
40. I have not seen any evidence of how the Council considered Mrs X’s back payment in the direct payment account, which was in effect a refund to her, when it told her there were excess funds of £1117.74.
41. I have reviewed the Council’s audits and letters and cannot understand how it has arrived at its conclusion in each audit. The Council’s letters to Mrs X and Mrs L do not clearly explain how it reached its conclusions. The lack of clear and transparent financial information was not in line with the guidance and was fault.
42. In particular:
• The Council audited Mrs X’s account three times. The Council’s final audit did not agree with its preceding audits, which suggests the preceding audits are likely to have been incorrect.
• The final audit missed a care invoice and therefore incorrectly calculated the cost of care.
• The Council did not take into account that Mrs X had already paid in full the invoices for June 2018 and November 2018 when it made a back payment of direct payments into her account.
43. I cannot make a finding on whether all pages of the direct payment agreement were available to Mrs X when she signed it. However, the Council has not provided evidence that Mrs X had all the information and fully understood it when she signed the agreement in October 2018. It recorded in August 2019 that Mrs X did not understand direct payments. That was not in line with the statutory guidance and was fault.
44. Mrs X said she received a call from the Council crediting the invoice. The Council said it has no record of that call. I cannot make a finding on that point. However, the Council delayed in pursuing the matter without any contact for 20 months. This led Mrs X and Mrs L to believe the matter was resolved. The drift and delay was fault.

Did the faults cause Mrs X or Mrs L an injustice?

45. The lack of clear, transparent and coherent information on the direct payment agreements and the resulting audits caused Mrs X and Mrs L confusion, frustration and uncertainty. They were both unclear on what the Council was claiming back and why. This was compounded by the Council’s delay in pursuing the matter.

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Agreed action

46. Within one month the Council agreed to:
• write to Mrs X and Mrs L and apologise for the confusion, frustration and uncertainty caused to them and pay them £200 each to recognise the same; and
• cancel the outstanding invoice against Mrs X’s account.
47. Within three months the Council agreed to remind relevant staff:
• where discrepancies arise in audits to ensure the reasons for this are clearly explained to the person; and
• of the importance of providing clear and transparent information to ensure people understand their responsibilities when accessing direct payments both at the point of arranging them and following any audit.
48. The Council will provide us with evidence it has complied with the above actions.

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Final decision

49. I have completed my investigation. I found fault leading to injustice and the council agreed to my recommendations to remedy that injustice.

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Investigator's decision on behalf of the Ombudsman