Somerset Council at fault for facilitating accrual of charging debts and for stating it ‘could not’ provide care until settlement of that debt

Ombudsman’s decision date: 15th July 2019

What Happened

Miss B lives with a diagnosis of “unspecified disorder of psychological development leading to significant anxiety symptoms”.

In January 2016 a review of Miss B’s needs concluded that she was entitled to direct payments for 10 hours of support a week. She was expected to use the funding to employ personal assistants to:

  • encourage healthy eating;
  • help with shopping;
  • encourage her to do house cleaning;
  • help with financial management.

In October 2017 Miss B’s personal budget was £173.94 a week.

The Council’s records said she owed £4,207.00 in unpaid client contributions (£68.50 a week). This debt accrued in part because the Council paid her full personal budget into her direct payment account each week, on a gross basis, rather than a net basis of £105.44.

On the 31st October during a visit to review Miss B’s financial assessment, the Council confirmed that Miss B had to contribute £68.50 a week towards her personal budget. This was based on the fact that her weekly allowable expenses were £202.50, and her assessable income was £68.50 higher (£271).

During this visit Miss B said she wanted the Council to review her needs.

The Council reassessed Miss B’s needs in January 2019.

The assessment said she had a large debt due to not paying her assessed client contribution. Miss B said she could not afford to pay £68.50 and offered to pay £10 a week instead.

The assessment identified potential risks for Miss B if she had no support, such as losing her tenancy, self neglect, increasing debt and vulnerability to financial abuse.

The Council also identified the need for a care and support plan of five hours of support (half the original amount of 10 hours). This aimed to develop her skills and routines through meal planning/preparation; personal care; and maintaining basic hygiene.

The Council wrote to Miss B on 15 January. It said:

  • it would stop her direct payments as she was not using them to meet the needs it “had assessed as a priority”;
  • she had refused to pay her assessed client contribution until it had reviewed her financial assessment;
  • the income and disability related expenditure chart completed, accurately reflected her circumstances;
  • it would not take account of debt repayments or expenditure not directly related to disability;
  • it could not arrange care until Miss B agreed to pay her assessed client contribution and a repayment plan for the debt for the outstanding charge, both of which she would have to pay via a direct debit or standing order;
  • it was open to Miss B to arrange her own care and pay for it herself. It said it would still expect her to pay the arrears.

The Council visited Miss B on 16 January and followed up the visit with a letter. It said it would stop her direct payments immediately. It said:

  • it had offered to commission five hours of care a week, provided she paid her assessed contribution; or
  • she could arrange care and pay for it herself.

It noted Miss B wanted to source her own carer and would not pay her assessed client contribution. It sent her a form to ask for a review of her assessed charge. That told her the financial assessment:

  • takes account of the daily living component of a Personal Independence Payment but disregards the mobility component; and
  • takes account of disability related expenditure but not debt payments.

What was found

The Local Government Ombudsman (LGO) found that the Council was not at fault for the way it worked out Miss B’s assessed client contribution. It was in line with the Care and Support Statutory Guidance (Statutory Guidance). It took account of the Government’s Minimum Income Guarantee for someone of Miss B’s age, various disability premiums, Council Tax and disability related expenditure.

There was no fault in the Council saying it did not have to take account of debt repayments. The LGO considered that they were expenses the Council could expect Miss B to cover from her allowances.

The Council was not at fault for the way it assessed Miss B’s needs. The Council acted in line with the Statutory Guidance. It identified the need for help achieving three of the outcomes in the Statutory Guidance and offered to commission care to meet Miss B’s eligible care needs. However, she did not want to accept this and wanted to continue finding her own carers. The Council was entitled to stop Miss B’s direct payments as the care she was buying was not being used to meet her assessed needs.

The Council was at fault however, over the failure to address Miss B’s rising debt until she owed over £4,000 in unpaid charges.

Miss B already had debts and her personal budget was meant to be addressing the need for help with financial management. The Council’s failure to pay the correct personal budget net of her own assessed contribution, made it easier for her to accrue further debt. The LGO said that the Council needed to accept its responsibility by writing off the outstanding debt.

The Council was also at fault for telling Miss B it could not arrange care until she agreed to pay off the debt for her assessed charge.

The Statutory Guidance includes guidance on debt recovery, which highlights the possibility of taking legal action.

However, the existence of debts does not take away the duty to meet eligible care needs.

The LGO recommended that the Council write to Miss B within four weeks confirming they have written off her assessed contribution debts, and within eight weeks they must consider what action it needs to take to ensure:

  • direct payments are paid net of the assessed charge to reduce the risk of debts arising; and
  • officers do not make meeting eligible cares needs dependent on agreeing to pay off debts.

The Council agreed to do this.

Points for charging teams and for members of the public

  • It has never been legal, and it will never BE, legal, for a council to hold repayment of unpaid charges over a Care Act client as a condition of honouring its own statutory duty to meet needs. The Care Act is not the same as housing law, for instance, where not paying rent when due, can make you into a person who will not be offered another tenancy via the Housing Register!
  • A personal budget can always be paid net of any properly assessed charging contribution, but it does not have to be. A PRUDENT authority would always consider the risks: what, for instance, if a service user lacks capacity to manage their own Direct Payment, and the Authorised Person handed the budget to look after has no lawful access to the funds of the service user, not even as an appointee, and can’t therefore easily access that part of that person’s funds that represent their contribution by way of a charge. There are situations when it is positively asking for trouble to pay net of a contribution, however many hours it saves on invoicing for unpopular charges.
  • When a person’s assets are being totted up for charging purposes, there are elements of expenditure that MUST be allowed for (ie deducted from overall moneys) and others that MUST be, if they meet certain criteria, such as Disability Related Expenditure. However, Mobility Component is not allowed to be counted in, in the first place.
  • On debts, (debts for pleasure, or debts for wants, or debts for unavoidable commitments, whether or not having anything to do with disability) the guidance is silent on the question of debts that have already accrued in the service user’s financial history. So it would not be possible for a council to say that it ‘could not’ take debt into account. It could say that it ‘does not generally’ or that it ‘may do so depending on the nature of the debt’. In so far as debts are legal liabilities, it can’t be seen as depriving oneself of one’s assets to pay off debts, and therefore it can’t be unreasonable, in light of the focus of the guidance on ‘affordability’ to hope that they will be allowed for.
  • If not, the best thing, in our view, is to pay them off and insist that the council now reassesses ones savings, because very few councils DO a recount and just assume that the person is now not spending any other money other than what has been ‘allowed’ – whereas of course, their money continues to be their own money and they are entitled to reduce their debts.

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The full Local Government Ombudsman report of Somerset County Council’s actions can be found here