Date of decision: 28 July 2025
Summary
A daughter (Miss X) complained that Manchester City Council failed to notify her about third-party payments required for her late mother’s (Mrs T) nursing home placement, leading to a large debt to the Council, after Mrs T’s death. The Ombudsman found the Council’s fee calculation was correct but identified fault in the delay completing the financial assessment and, more significantly, in the Council’s failure to address accruing unpaid debt over several years.
What happened
In June 2021, Manchester City Council assessed Mrs T’s need for 24-hour care following her hospital discharge after an accident. Her daughter (Miss X) managed her finances, but had no formal power of attorney. They had used to live together before the accident.
A mental capacity assessment was completed for Mrs T to determine if she had capacity to make decisions about her care needs, and she was found to lack capacity in this area. The Council said it did not complete a capacity assessment for Mrs T relating to her finances because there was no reason to do so – it applied the presumption of capacity, if it thought about it at all.
The Council advised a financial assessment (FA) was needed and supplied charging policy details prior to finding Mrs T a care home placement, as the family was unable to afford a third-party top up.
Mrs T moved into the care home on 28th September 2021. The Council continued to chase Miss X for Mrs T’s financial information and Miss X submitted it such that the Council was able to provide a full FA in May 2022. The assessed weekly client contributions were £152.20 per week from September 2021, rising to £156.95 per week from April 2022.
The Council sent the financial assessment outcome letters to Miss X’s home address. However, all subsequent invoices throughout Mrs T’s placement from September 2021 to February 2024, and a reassessment letter in April 2023 (increasing payments to £172.80 per week), were sent directly to Mrs T at the care home, which the care home said were passed to Miss X, though Miss X disputed ever receiving them.
After Mrs T’s death in February 2024, the Council billed Miss X £20,202.79 for outstanding fees.
Miss X, unaware of accumulating debt, raised concerns about the lack of direct communication from the Council. The Council explained its approach was based on Miss X’s lack of formal power of attorney and that the care home had confirmed all correspondence was passed to Miss X, which the Ombudsman accepted on the balance of probabilities.
The Council said that although its records showed that Miss X supported Mrs T with her finances, there were no concerns about Mrs T’s capacity to manage her finances when she was assessed to need 24-hour care.
What was found
The Ombudsman found that Manchester City Council acted properly in calculating and charging care fees under the Care Act 2014. The Ombudsman stated that there was no fault in determining the amount or process. However, the Ombudsman found that there was fault in the Council’s delay in finalising the financial assessment. The delay was caused partly because it took Miss X about six months to submit the relevant financial information for Mrs T as requested by the Council, and it then took the Council approximately two months to complete the financial assessment for Mrs T after that. This was fault – but the Ombudsman found that the Council’s two months delay did not cause any injustice to Mrs T, because no payments had been made towards her care costs to date.
There was no evidence an MCA about finances was completed for Mrs T and so there was no evidence to show she lacked capacity to manage her finances. Miss X did not have a power of attorney for Mrs T and the Ombudsman therefore found no fault by the Council for issuing Mrs T with her care fees invoices directly.
The Council was at fault for not taking proactive steps to recover Mrs T’s care fees until it accrued over a significant period, however.
When Mrs T was not responding or making any payments towards her care fees, the Council should have contacted Mrs T and/or Miss X to find out the reasons for non-payment and to have minimised further defaults. The Council should also have been prompted to consider whether it needed to complete an MCA assessment for Mrs T around her capacity to manage her finances. The Council allowed the matter to drift until Mrs T passed away and then it issued the final bill to Miss X to recover the outstanding care fees. This was fault. This caused no injustice to Mrs T, but it caused shock to Miss X when she received Mrs T’s accrued care fees although that was no ground to direct the Council to write off the £20,202.79 outstanding care fees as it was within the Council’s right to charge for care services provided to service users. Mrs T got the benefit of the care service and Miss X was aware there might be a charge. This was not fault.
The Ombudsman ordered the Council to apologise, offer an affordable payment plan, and remind relevant staff by training or other means, of the importance of taking proactive steps to ensure they contact service users, their families and/or representatives in a timely manner to recover accruing are fees.
Points to note for councils, professionals, people using services and their carers, advocacy groups and members of the public
Miss X made a complaint to the Ombudsman in January 2025 but said she only became aware of the outstanding care fees in March 2024. To conduct a meaningful investigation, the Ombudsman exercised discretion to investigate matters from 2021. We are not sure why she thought the bill was for a top up because it is clear that the Council found a home which did not require a top up.
We think that the investigator should have probed more deeply about mental capacity to manage finances. Capacity considerations around financial decisions and communication are not optional under the Care Act’s charging and assessment framework. A presumption of capacity ought not to be hidden behind if it’s going to be key to getting paid for what the Council is funding up front.
If it appears someone is unable to understand or manage their financial affairs, councils are exhorted, explicitly, by the Guidance to consider a capacity assessment and, where appropriate, ensure involvement of an authorised person such as a deputy or attorney.
Whilst it is correct that a willing and able relative who is contracting in their own name for someone in a care home is a good justification for the council not doing so (because that negates the duty that would otherwise arise in respect of a person lacking in contracting capacity, regardless of their wealth) this was not that sort of situation; Miss X was merely supporting her relative to manage her finances, and that meant under her informal verbal authority which in this context was known to be waning and already non-existent in relation to her care.
Sending notices solely to a care home, for passing on to someone else, even without a formal power of attorney, does not satisfy legal requirements for clear, accessible communication — especially over years of accruing debt. Proactive engagement must be made with those helping to manage a person’s affairs in practice, not just in form.
If the failure to conduct a capacity assessment at an early point was wrong, then this puts subsequent events in a different light. The Council could have found itself responsible for financial abuse, had Miss X been that way inclined (or had failed to provide access to a personal expenses allowance, such that the person ends up with no money at all for the Care Home to use on personal necessities). The Guidance expects a council that is fronting Care Act care home services to apply for deputyship in order to supply the legal authority to take the money, if there’s any issue with payment of the charges.
The Ombudsman recommended an affordable payment plan by instalments, but we are not sure of the relevance of this suggestion, since payments would have to be made from Mrs T’s estate, rather than from Miss X’s own funds, and would come from capital, or savings, since any income Mrs T received would have stopped on her death. It may be that MIss X had been a beneficiary of the will (who should not have been able to access the money until probate etc had been concluded), but we note that the bill came through to her only about a month after the relative’s death, so it raises the question where had the money gone, if the financial assessment calculation was correct.
That suggests to us that a joint bank account might have been the arrangement when the ladies were living together, which means that money would have been able to be taken legitimately by one for the other, or for herself. If there was no liquid capital left out of which to pay the debt, this would mean that the house that they had shared would ultimately have to be sold, unless Miss X wanted to pay out of her own income, and thus that might explain the payment plan.
It is worth noting that IF a bank learns of the incapacity of one of several joint bank account holders it may suspend it temporarily until it has ascertained the position with regard to any lawful authority over the whole of the contents – ie does the other one have a power of attorney. If the bank does NOT know about supervening incapacity, of course there is nothing that anyone can do about the removal of the funds, as that is what a joint bank account entails. This is yet another reason why councils should do what the Guidance requires of them regarding probing for lack of capacity with regard to financial management, when placing a person in a care home.
Please use the following link if you want to read the original Local Government and Social Care Ombudsman’s Manchester City Council (24 017 059) 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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