Summary: Mr X complained the Council delayed increasing his direct payments in line with the National Minimum Wage increase between April and June 2024. The Council delayed implementing the increase which meant Mr X could not fully pay carers during that period. The Council had already paid the shortfall to Mr X and took action to ensure the same fault does not occur again. It agreed to apologise and make a symbolic payment to recognise the distress, uncertainty and time and trouble caused to Mr X.

The complaint

1. Mr X complained the Council delayed increasing his direct payments in line with the National Minimum Wage increase between April and June 2024. This meant Mr X had to pay carers below the minimum wage during that period which caused him distress and uncertainty.

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The Ombudsman’s role and powers

2. 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)
3. 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)
4. 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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How I considered this complaint

5. I spoke to Mr X about his complaint and considered information he provided.
6. I considered the Council’s response to my enquiry letter.
7. Mr X and the Council had the opportunity to comment on the draft decision. I considered comments before making a final decision.

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What I found

The National Minimum Wage

8. The National Minimum Wage is set by the Government and is the minimum pay per hour almost all workers are entitled to.
9. It does not matter how small an employer is, they still have to pay the correct minimum wage.
10. In April 2024 all rates of the National Minimum Wage increased for all ages. Another increase is due in April 2025.

Direct Payments

11. Direct payments are cash payments made to individuals who ask for them to meet some or all of their eligible care and support needs. Where direct payments are for a child or young person, a nominee usually receives and administers the payments on their behalf.
12. Relevant law states councils must ensure the amount of direct payments is sufficient to secure the agreed provision.

What happened

13. Mr X has a child, Y, who has special educational needs and disabilities which means they need carers. The Council provides Mr X with a personal budget which he receives as direct payments. Mr X uses the direct payments to employ carers to look after Y.
14. In April 2024 the National Minimum Wage was due to increase which meant Mr X would need to increase the amount he paid Y’s carers.
15. Records show Mr X contacted the Council in early 2024 asking for confirmation that the direct payments would increase from April 2024. The Council responded in February 2024 stating the matter was being considered by a manager.
16. In mid-March 2024 Mr X contacted the Council again, concerned that he had not had confirmation that his direct payments would rise despite it being only two weeks until it took effect in April. The Council responded and said the manager dealing with the matter was on leave but it hoped to provide an update soon.
17. Mr X contacted the Council again towards the end of April 2024 after he had still not received notification that his direct payments had increased. Mr X wanted the matter resolved before he had to pay Y’s carers at the end of April. He said paying them under the National Minimum Wage left him open to prosecution from HMRC. He said it would cause him unnecessary financial loss if he had to top up the carers’ wages himself.
18. The Council responded to Mr X and said the previous manager dealing with the matter had left the Council. The decision to increase direct payments was now with another manager.
19. In early May 2024 Mr X complained to the Council as his direct payments had not increased in line with the National Minimum Wage increase. Mr X said as a result he could not fully pay his carers and had reported the matter to HMRC.
20. The Council responded at Stage 1 of its complaints procedure in late May 2024. It apologised that the Council had not made a decision and increased the direct payments. It said the matter was still under review.
21. Mr X escalated his complaint to stage 2 and the Council responded in June 2024. It accepted it was required to increase direct payments in line with the National Minimum Wage increase. It confirmed the increase would come into effect from July 2024 and back payments would be made to cover the period April to June.
22. The Council emailed Mr X at the end of June 2024 confirming the increase and the amount it would backpay it would make. Mr X pointed out the Council had incorrectly calculated the payment. The Council rectified this and records show Mr X received the correct backdated payment and direct payments from July 2024 onwards.
23. Mr X remained unhappy and complained to us.

The Council’s response to us

24. The Council said a change in payment systems along with a changeover of internal processes caused a delay in increasing direct payments in line with the April 2024 National Minimum Wage increase. The Council provided evidence that Mr X received the correct amount from July 2024 along with a backdated payment to cover April to June.
25. The Council said it had already agreed the next National Minimum Wage increase which is due to come into effect from April 2025 to prevent recurrence of issues in this complaint.
26. The Council confirmed it had, to date, not received any other complaints from parents or carers about a failure to increase direct payments. It said all those affected had received back dated payments.

My findings

27. The Council has accepted that it delayed increasing Mr X’s direct payments in time for the April 2024 National Minimum Wage increase. That delay was fault and meant it underpaid his direct payments between April and June 2024. This caused Mr X distress and uncertainty as well as time and trouble chasing the Council about the matter.
28. The Council has already taken action to remedy some of Mr X’s injustice as well as making sure the same issue does not occur again when the minimum wage is due to increase again in April 2025. It has paid Mr X the payments he missed between April and June 2024 and has already agreed the increase for April 2025. The Council has confirmed it has not received any other complaints from other people about the same matter and it has already made payments to those that it underpaid during the same period. Given this, there is no requirement to make any further service improvements, however I have made recommendations to remedy the injustice caused to Mr X.

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Agreed action

29. Within one month of the final decision the Council agreed to apologise to Mr X and pay him £100 to acknowledge the distress, uncertainty and time and trouble caused by the delays in increasing his direct payments in line with the 2024 National Minimum Wage increase between April and June 2024. We publish guidance on remedies which sets out our expectations for how organisations should apologise effectively to remedy injustice. The Council should consider this guidance in making the apology I have recommended.
30. The Council should provide us with evidence it has complied with the above actions.

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Final decision

31. I completed this investigation. I found fault and the Council agreed to my recommendation to remedy the injustice caused by that fault.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman