Decision Date: 30 September 2024
Summary
Mr X’s representative raised concerns about the Council’s improperly charging Mr X for contributions to his residential care fees, despite his entitlement to free aftercare under Section 117 of the Mental Health Act.
Although the Council refunded the improperly charged amount, it had not offered a satisfactory interest payment on the refund. The representative requested that the Council reconsider the interest payment and sought compensation for the distress caused to Mr X and his mother.
What happened
In 2015, Mr X was detained under Section 3 of the Mental Health Act 1983. Following his discharge in December of the same year, he moved into a residential care home. The Council conducted a financial assessment, concluding that Mr X should contribute towards his care costs.
Between December 2015 and August 2022, Mr X paid a weekly contribution, totalling over £38,000 during this period. To help cover these costs, Mr X’s mother took on extra work, enduring significant stress and financial strain.
In September 2022, Mr X’s representative contacted the Council, highlighting concerns about Mr X’s financial situation and seeking assistance with his placement funding. The Council responded, maintaining that Mr X was required to contribute towards his care fees.
However, in November 2022, Mr X’s representative asserted to the Council that Mr X was entitled to free Section 117 aftercare. Upon review, the Council identified that it had failed to update Mr X’s care record to reflect his Section 117 entitlement, which exempted him from care contributions. This error was attributed to human oversight.
The Council acknowledged its mistake and began refunding the improperly collected payments. In January 2023, it refunded £19,953.60 for the period between May 2019 and December 2022. In October 2023, it refunded an additional £18,050.44 for the period from December 2015 to May 2019, it is unclear why it was paid in two instalments.
In May 2023, Mr X’s representative formally complained, requesting the Council pay 8% interest on the refunded amount and that it provide compensation for the distress caused to Mr X and his mother.
Initially, the Council refused to pay interest but later agreed to pay 2% interest, amounting to £760.10 (if it was for just one year).
What was found
Manchester City Council was found at fault for improperly charging Mr X for contributions to his residential care fees, despite his entitlement to free Section 117 mental health aftercare. This caused financial and emotional distress to Mr X and his mother, who had to manage the burden of his financial situation for seven years.
To remedy the injustice caused, the Council was told to apologise to Mr X and his mother for the error and distress caused. It needed to pay Mr X £6893.48 as an interest payment on the refunded amount, plus £500 in recognition of the distress caused. Additionally, it needed to pay Mr X’s mother £1000 in recognition of the avoidable distress and effort to which she had been put.
Points to note for councils, ICBs, legal and other professionals, people using services and their carers, advocacy groups and members of the public
Under Section 117 of the Mental Health Act 1983, local authorities and NHS bodies have a joint statutory duty to provide free aftercare to individuals who have been detained under Section 3 and have since left hospital.
Provision of aftercare is a mandatory duty, although what is needed is a matter of professional judgement and discretion, with regard to the sufficiency of the budget. The public bodies’ own resources are not irrelevant to that decision-making regarding planning.
Despite this clear statutory protection, the Council’s failure to update Mr X’s care records resulted in a significant breach of his rights, exposing systemic flaws in how Section 117 eligibility was being recorded and monitored.
It has not been legal to charge for aftercare since the Watson and Stennett judgments – (Stennett having been one of Manchester’s own clients, in a nice twist!) in the House of Lords in 2002.
We see that the LGSCO accepted the stance that the error was just one of oversight, but if a client folder is marked as s117, then there should not ever have been a charge, and it doesn’t explain how that happened.
That omission to flag it as a s117 file might well have been an oversight which explains the charge being generated, but we think it is also likely that it could have happened because the cost of the care home – the accommodation element – was treated explicitly as outside of the aftercare need, without any defensible reason, and thus deliberately charged for under the Care Act in the normal way, even though the person’s file may have been marked as s117. That would have indicated a more serious problem, to our minds. This is easily done if councils are using Care Act forms for doing s117 assessments and care plans.
It should be stressed that it is the Council’s ongoing duty to review and rectify systemic issues proactively, ensuring vulnerable individuals receive the support and protections to which they are legally entitled.
We note that Manchester spotted two other cases in which this had happened, which would have had to have led to refunds and interest as well.
The LGSCO’s approach to recommending remedies is commendable for including interest payments; however, the rate of 2% initially offered by the Council was clearly inadequate. Interest on refunded sums should aim to restore the individual to the position they would have been in had the fault not occurred.
Since not all the money had been owing for all of the time, and the ready reckoner way to arrive at the right sum, once the rate is agreed, is to apply half the rate for the whole time or the whole rate for half the time, the actual breakdown of the sum redone by Manchester and approved of as solving the injustice would have been illuminating for other members of the public, we have to say.
This complaint underscores the importance of aligning complaints responses from Councils with the equivalent legal obligations – ie if they had allowed themselves to be sued for restitution, they would have been ordered to pay the judgement rate, which is where the 8% under discussion, first comes from.
Please use the following link if you want to read the original Local Government and Social Care Ombudsman’s Manchester City Council (23 019 512) report.
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