Care Act analysis: what must be considered when setting personal budgets

Belinda Schwehr examines a recent case in which the ombudsman criticised a council for arbitrarily capping a woman's live-in care payments

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By Belinda Schwehr

A recent case involving a woman, Mrs Y, who had an arbitrary limit placed on her live-in care, provides a wonderful example of what the Local Government and Social Care Ombudsman can achieve.

The report explores a technique, one that is commonplace in social services today, for attempting to ‘manage down’ the expectations of service users, regarding their rights to a proper care package.

Care planning and the budget allocation on which it depends, has always been needsled, under community care law, not resources-determined – ever since 1997.

It is true that alternative adequate means of meeting need can be compared for cost-effectiveness and the cheaper one offered. But that does not mean that the cheapest possible offer determines what must be offered if in fact it is declined, because it may be declined for reasons that should not have been side-lined in the first place. We suspect that no senior manager really wants to accept that that is the legal truth, because they are under so much pressure to save money.

The legal principles underpinning the Care Act and the legislation that preceded it explain why indicative budgets decide nothing, and why there has been case law regarding how even indicative budgets must be arrived at, lest people are manoeuvred into believing that the indicative budget is a ‘take it or leave it’ amount.

Resource allocation systems are only a management accounting tool, designed to make it easy to put people’s personal budgets down, when more cuts are deemed necessary – but not up, funnily enough, when labour becomes more scarce, such as since the Brexit vote, and the price of it invariably goes up.

The law is that both the indicative – and more importantly, the final budget – must be rationally sufficient.

What must be taken into account

That’s a lawyer’s way of saying it must be based on the evidence available as to the real market rate for the relevant kind of care, and take all other relevant considerations into account, such as:

  • the effect on the price of the specialist skills required (or not);
  • the effect on the price of the antisocial hours required or the chunks or ad hoc unpredictable nature of the time required;
  • the law on breaks, for carers living in, most of whom are on what’s called an unmeasured basis of contract, with their service-using employers, on a negotiated daily average number of hours. That is not the case necessarily when the worker is employed by an agency, but it explains the focus in this ombudsman report on the question of the cost of carer’s breaks, required under the Working Time Directive, regardless of the basis of contract.

We love the fact that the ombudsman refers to paragraph 10.27 of the Care Act statutory guidance regarding public law principles and the outlawing of any arbitrary cost cap, although we know that many councils would not accept that the rates they are offering are arbitrary.

What is an abitrary limit?

Many would say that one can only have £650 a week to spend on a live-in care worker if that is what one wants, because that is what it would cost the council to place someone in a care home, locally. ‘That’s not arbitrary, therefore’, they would say – ‘no, that’s because we are allowed to take cost into account and if we could meet the needs adequately and appropriately, in terms of wellbeing, for less, then we can’t be made to pay more to meet someone’s preference to stay at home’.

The trouble with that, of course is that some people really do need to carry on living at home, and the primary legal duty is to meet need.

Even if they don’t objectively need to stay at home, they will often turn round and say ‘Thanks, but no thanks’, then, via their relatives, or an advocate.

Whilst it’s true that very few councils have the legal fortitude to walk away at that point, fearing press attention, and are even less likely to do so if someone isn’t really capacitated to make that decision, it does then boil down to the council’s choice, rather than the person’s choice, if the council chooses not to walk away and pursues that person with another offer.

Rates must be based on real facts

That choice, then, must be based on the real facts, the actual environment within which the person’s needs must then be seen to be located, and via the real market cost of the deployment option actually being contemplated.

Funnily enough, that’s always a direct payment – we believe this is  because councils think that it distances them from prospective liability from harm, if an inadequate amount, accepted by an unaware person then turns out to be so inadequate that injury to the service user or personal assistant, later ensues. They think that at least it won’t have been commissioned by the council, and that they will escape criticism because a capacitated relative has accepted the amount, after all!

CASCAIDr could tell councils (and clinical commissioning groups) why this simply won’t wash, of course, but legal literacy in the Care Act is not the flavour of the month in training terms. It is noteworthy that the LGSCO often asks councils to commit to training of this nature, however, in the wake of a critical report.

In this report, it is interesting to note that Mrs Y lacked capacity but was recorded as ‘declining’ residential care in person and yet Ms X was not referred to as an authorised person for direct payments receipt.

Ironically, this was not a case about a council saying ‘You can’t stay at home and have live-in care’ – as is the line most councils take, if a care home would be cheaper. It was a case about a council being positively willing to fund the purchase of a live-in care service, which is wholly to be applauded.

But that is not on, if the rate it is then going to offer is standardised, as if the council can set the rate, instead of responding to it, and not backdated to the point when the expenditure was incurred, when the failure to conclude Care Act process was the council’s.

Who sets the market rate?

Market management is one thing, but the facts do have to underpin, and be reflected by, the rate offered; commissioners and panels do not set the rate if the council has no other means of meeting need, other than through purchase or provision of direct payments for use in a real and volatile market. We cannot help but point out what a different world it would be if only social care providers understood that simple legal truth about clients’ rights.

The ombudsman’s point that the council was not wrong to contend that the fee for a live-in care service from an agency should cover the employee’s breaks is the only point on which we might part company with the findings.

We think that that is right for an agency which is the employer of the staff, and that its weekly quotation for the service would have to cover the breaks that are required by law. But no council is in a position to require an agency to contract on the terms that it would insist on including for itself, if it was doing the commissioning, when the agency was dealing with other purchasers, such as private or direct payment clients, who do not enjoy the same commercial power as the authority.

As in this case, such a purchaser may not need a carer’s break to be covered, if the client is going to day care, as had previously been the position for Mrs Y. A person who was given a direct payment to employ a PA directly would of course need to pay for the carer’s break to be covered separately and would therefore need the funding in the direct payment. If a person employs a worker directly, they often have to pay a commission, weekly, too, and there is no reason that a council could possibly use to justify not taking account of that fact when allocating budget.

Wants or needs

We note that there was a suggestion that anything over the ‘standard’ rate would have be paid for through a top-up, as if it were a want, and not a need. Businesses that provide direct payment purchasers with special services, such as continuity guarantees, flexibility with banking unwanted hours, fees remissions if one is hospitalised or on holiday, or care during antisocial hours – things  that cannot be said to be part of ‘quality’ services (whatever the statutory guidance might mean by that) – may well be seen to be triggering top-ups, but this was not one of those cases.

The point is that the fees rate evidence pointed in one direction only in this case – Havering thought it could put blinkers on, against real world facts, and simply tell its clients to manage within a standard rate, effectively, making the clients deliver the savings sought, by hook or by crook.

The ombudsman’s recommendation that Mrs Y be reimbursed for the loss she suffered for having to cover the shortfall in funding from her own resources  is pure gold, too, for advocates and advisers. It is leverage which may actually deter councils from trying to get away with practices and thinking that are self-evidently in breach of the Care Act (whether in breach of its due process or of its substantive requirements).

The risk of having to disgorge the savings it thought it had been able to make may quell enthusiasm for managerial innovations such as deliberate system go-slows to put off the point of having to fund anything – this happened in the 1990s, after the first wave of judicial reviews got underway after the 1997 Gloucestershire case. The Court of Appeal’s decision in CP v NE Lincolnshire provides the formal legal underpinning for this financial focus by the ombudsman, and it has been a very long time coming.

Why watchdog should go further on illegality

We think that the ombudsman is fast becoming a viable alternative to a tribunal or the Administrative Court, given the amount of illegality that it is now dealing with, under the guise of ‘fault’ and remedies for ‘injustice’.

Our only wish is that the reports could be a little less coy about it and name and shame councils specifically for acting unlawfully, irrationally, in terms of the evidence available to them, in breach of statutory duty, in breach of the rules of procedural fairness, for ignoring the statutory guidance without good reason, for fettering their discretion and for ignoring human rights (when that is appropriate criticism), instead of just saying that the council’s staff were at fault!

Belinda Schwehr is chief executive of legal advice charity CASCAIDr ( and owner of consultancy Care and Health Law. She has been a barrister, solicitor advocate, presenter, writer and university law lecturer.

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2 Responses to Care Act analysis: what must be considered when setting personal budgets

  1. Eco-Social Worker January 23, 2020 at 8:55 am #

    “Our only wish is that the reports could be a little less coy about it and name and shame councils specifically for acting unlawfully … instead of just saying that the council’s staff were at fault!”

    Exactly. As I posted on a previous article; why send the council staff for ‘retraining’ when the problem was their decisions were overruled by a funding panel. You can give a social worker all the training in the world, but it won’t improve compliance with the law if care packages are determined by a panel of managers rather than the social workers.

  2. Colin Slasberg January 23, 2020 at 3:52 pm #

    Councils have long been able to afford meeting the needs for wellbeing of the small number of people with the skills, confidence and energy to impose themselves on the system. If councils were to start abiding by the Care Act duty to assess needs for wellbeing, not eligibility, for all people the cost of meeting all assessed need would almost certainly exceed budgets. It is no answer to say they must increase their budgets (as para 10.27 of the Statutory Guidance absurdly says councils should do). The only answer, to reduce the legal duty to meet need under section 18 to ‘life and limb’ and make all other needs for wellbeing a power to meet under section 19. The recent case involving Westminster pointed this way forward. Now that will be the real game changer, from top to bottom!