Decision Date: 11 Dec 2024
Summary
The Council stopped Mr B’s management arrangement for his direct payment, because of a disagreement with the Authorised Person as to the scope of his responsibilities, without asking Mr B for his views as to whom to include in the review meeting and excluding the Authorised Person from the meeting.
What happened
Mr C, acting for himself and for his son Mr B, complained that the Council:
- wrongly stopped a third party (an individual called Mr X) from managing Mr B’s direct payment after 13 years because the person refused to accept that he needed to be an employer to hold or manage the direct payment;
- thereby moved the man, his son, to a commissioned arrangement without his consent; and
- unreasonably refused to allow Mr X to attend the review.
West Sussex’s direct payment guidance required that anyone wanting to be an Authorised Person to receive a direct payment for supporting a customer lacking in capacity to hold a direct payment in their own name, needed to meet certain criteria. That included:
- having read and signed the agreement and consented to carrying out the responsibilities;
- being capable of managing the direct payment themselves or with the assistance of others; and
- understanding they must act in the customer’s best interests and in accordance with the person’s plan.
Before appointing an Authorised Person Sussex expected the allocated worker or support broker needs to satisfy themselves the person met the criteria as a suitable person. The first review scheduled for within the first six months was to cover, ‘where someone employs a personal assistant, that they are following employment responsibilities including submitting PAYE returns to HMRC as well as paying tax, National Insurance and pension contributions.’
The Council had a contract with an organisation called Independent Lives whose role was to support adults’ services customers if they were going to use a direct payment.
Independent Lives was required to provide support to help them understand and comply with their responsibilities and the laws relating to becoming an employer.
If the person/existing nominated manager does not consider they need support they were referred to Independent Lives who would get in touch to ascertain their knowledge and understanding relating to employing a personal assistant and give the social worker or support broker some feedback.
The system was that if Independent Lives thought that the relevant person’s knowledge and understanding is not suitable to become an employer it should tell the allocated worker/broker who should then tell the direct payments team postponement would be required. Refusal to engage at that point over employment responsibilities was to trigger consideration of an ordinary commissioned arrangement for the care plan and services.
In 2023, the Council began reviewing the arrangements for all customers who had a direct payment with Mr X as an Authorised Person and took issue with his stance that he did not have to act as an employer of the care workers providing personal assistant services.
The Council’s view was that when a direct payment included employment of staff the person managing the payment must accept the role of employer.
The Council wrote to Mr B in February 2023 to explain it was reviewing the direct payments for those using a third party to help manage it, mentioning its intention to arrange a review meeting for him between February and September 2023 and informing him he could invite other people to the review such as family and friends caring for him, an advocate etc.
For the July 2023 review, Mr C (Mr B’s father) asked that Mr X be present. The Council told Mr C as they had met previously and completed its thinking about Mr X, there was no need for him to attend.
When the social worker arrived Mr X was present and the social worker said he needed to leave. He therefore left the room and went into the kitchen.
The social worker assessed Mr B as not having the mental capacity to understand or manage a direct payment. The social worker noted as Mr C could not manage the direct payment as a suitable person this meant direct payments would end and the Council would move Mr B to a managed account.
The Council told Mr C about that decision on 14 September.
Mr C complained to the Council in October 2023, and raised concerns about Mr X being excluded from the review meeting.
In its November response, the Council explained its position and dispute with Mr X, but assured Mr C that a managed budget would make no difference to the arrangements for providing support to Mr B.
What was found
The investigator concluded that there was no evidence of fault in the Council’s decision to stop the person managing Mr B’s direct payments or in its decision to move him to a managed budget.
However, the Council delayed making those decisions and failed to ask Mr B for his views on who to include in the review meeting. An apology, payment and reminder to officers was a satisfactory remedy.
Mr X has acted as the suitable person in managing Mr B’s direct payment since at least 2012 and signed the direct payments agreement, agreeing to comply with the conditions.
But the investigator agreed that the Council is the decision maker as to whether the person in question is suitable to be an Authorised Person.
The investigator was not prepared to interpret legislation or guidance.
The Council did not tell Mr B that until 2023 given the Council had had the practice guidance in place since 2015 and the investigator said s/he would expect the Council to have picked up on that issue before 2023. That delay was fault which had an impact in this case: it would likely have ended Mr X’s involvement much earlier had it been up to speed. So there was injustice because of the Council’s delay, although no criticism of the Council for deciding Mr X can no longer be Mr B’s Authorised person.
The investigator was clear that there was clear evidence that Mr C could not manage the direct payments for Mr B, either. [The report does not say what the evidence was – he may have been bankrupt, or had convictions or been the actual ‘employee’ or self employed person, doing the care, but this is not clarified.] So, Mr B could only have the default method of management (or a different Authorised Person, which is simply not explored.).
There was no evidence the Council wrote to Mr B or Mr C to explain its reasoning, following the 2023 review nor that it was discussed with Mr B during the review, nor any explanation why a Council managed budget at that point was the only option. Failure to explain that until the Council responded to a complaint is ‘fault’.
The Council said it excluded Mr X from the review because of a conflict of interest, and as Mr X could not contribute to the re-assessing of Mr B’s care and support needs.
When the Council wrote to Mr B to tell him about the review, it told him he could invite other people. The Council made clear that could include friends or family that were caring for him, an advocate or someone to give him support. The statutory guidance endorses that approach without any requirement for the person attending to be somebody providing care or who can contribute to the assessment.
There was nothing to suggest that the Council asked Mr B whether he wanted Mr X present at the review before he was excluded; it was Mr B’s review and he was the one entitled to say who should be present so the omission was ‘fault’ too.
The Council was required to apologise to Mr B and Mr C and pay them £200 and remind officers about what the care and support statutory guidance says about service users having other people present at a review.
Points to note for councils, professionals, people using services and their carers, advocacy groups, members of the public
We think that the Investigator could have gone further in this case, to enquire how the Council could assert that no change would arise when the Council took over commissioning, directly, or being the Authorised Person itself, if it was still going to call that a Direct Payment. If there was an employee involved in Mr B’s care, that person needed to be transferred to the Commissioned Agency’s employment – albeit not under TUPE, in our view because there was going to be a new Commissioner which means that the change did not fit into TUPE rules. Perhaps there was not, in which case, removing Mr X from the role of Authorised Person would seem to us to have been using a sledgehammer to crack a nut. We also think that it would have been better had the investigator explained, however discreetly and briefly, why Mr C the father could not be the Authorised Person. It may be that he was the employee and that this was really an argument about Mr X having run the payment as a self employed arrangement, which is not unlawful, although often hard to credit, on the facts.
We think that Mr X was running a business of being an Authorised Person, but that is not illegal in any sense. The Direct Payment regulations make it clear that a person can be an Authorised Person even if they run an organisation, and that where that is the case, the manager of that organisation needs to be DBS’d and also get DBS certificates done for any staff being used. This would not trigger registration with CQC as a care provider business because of the third party exemption, which enables a person with authority to manage a direct payment to be able to operate outside of CQC rules.
However, the dispute at the heart of the matter was about whether an Authorised Person needs to be an employer, when employment of PAs is the manner in which the needs are to be met. The answer is crystal clear: the Authorised Person takes as PRINCIPAL, not as agent for anyone else. The Authorised Person necessarily has to be the Employer, or the Purchaser of agency or self employed services. There is no-one else with the capacity to do it in that context. The whole thrust of the Authorised Person rules is that they arise because of a person’s incapacity in relation to holding a direct payment in person, and if a person lacks capacity to understand a direct payment, it is hard to think of a rationale for their being able to understand the concept of being an employer, however much help they might get with employment law.
The Authorised Person is liable to HMRC for on-costs owed under PAYE if they make an arrangement that is called self employment but which does not actually operate as such. But that is not the same issue as the question whether the AP must BE the employer, when employment is required.
Instead of thinking about the law, the investigator just went to the Council’s own practice guidance and endorsed the Council’s right to decide whether it is necessary for the Authorised Person to be an employer.
The language used in the original report is so opaque that it is impossible to work out if the real issue was that the PA arrangement was one of employment or self employment. It had gone on for 13 years and it is inconceivable that nobody got paid during that time, so we think in fact that this is part of the wider debate in the sector as to whether people can be micro-providers without falling foul of tax or employment or regulatory law.
The fact that nobody considered finding another person to be an Authorised Person is part of the reason we think that that is what it was really all about. But that doesn’t fit with the assurance from West Sussex that there would be no change in the arrangements for Mr B’s care even though the budget was to become an ordinary managed budget – ie the default mode of commissioning to meet the eligible needs.
Please use the following link if you want to read the original Local Government and Social Care Ombudsman’s West Sussex County Council (24 001 520) report.
If you are affected by the issues in this report, please consider asking a free, one-off question, anonymously, at a level of principle, here. Our experts’ response will give you an opinion which may then help you and the broader community, when posted.
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