Date of decision: 03 December 2025
Summary
A man complained that a private care provider did not honour written terms in his father’s care home contract about refunding NHS Funded Nursing Care, once the NHS paid it. He said he chose the home on the understanding that if his father became eligible for Funded Nursing Care, the weekly fee he was paying would reduce and backdated NHS payments would be reimbursed to him, but the care provider kept the money instead.
What happened
In June 2022 an older man, Mr Y, left hospital to move into his first care home and, while still in hospital, he had already been assessed for NHS Continuing Healthcare and NHS Funded Nursing Care (FNC). In July 2022, he moved to Aran Court, a care home run by Avery Homes Kirkstall Limited, after about a month in that first care home.
Mr Y’s adult son, Mr X, dealt with Aran Court on his father’s behalf and was given a standard, pre‑filled written contract by the Aran Court manager when arranging the placement. The contract set out a “Funding Breakdown” listing a “total gross self‑funded fee – £950”, “less anticipated CHC or FNC — £00”, and “self‑funded fee after deduction for FNC or CHC — £950”, so the gross and net figures were recorded as the same amount. [CHC is continuing NHS health care status, for which patients the NHS pays the full fee and FNC is funded nursing care where the NHS pays a portion of the fee].
An additional note under this said the resident was liable for the “full gross self‑funded fees except where the FNC has been agreed and paid for by the NHS”. Paragraph 5 of the contract stated that where the agreed fee included an FNC contribution, this would remain the self‑funding resident’s responsibility until the home received the NHS funding and that any payments made by self‑funding residents “shall be refunded should the NHS choose to backdate FNC payments”.
Mr X said he explicitly checked with the then manager at Aran Court whether, if FNC was awarded, the FNC element would be deducted from the £950 weekly fee, and that she confirmed it would. He also said the manager told him she would leave the specific FNC payment figure blank in the contract because eligibility and rate had not yet been decided.
In November 2023, the NHS wrote to Mr X confirming that FNC had in fact been agreed for Mr Y from June 2022, when he left hospital, but that the payments had initially been sent in error to the first care home. In December 2023, the NHS then notified Mr X that backdated FNC payments for Mr Y’s nursing care would be paid directly to Aran Court instead.
By March 2024, despite the NHS paying the FNC to Aran Court, Mr X was still receiving invoices for the full £950 per week with no reduction or refund of any FNC amounts. On a date in March 2024, he wrote to the care home finance office pointing out that he was still being charged £950 weekly and that no backdated refunds had been made to him, and when he received no response, he submitted a formal complaint to the care provider asking for both a refund of backdated FNC and a reduction in the ongoing weekly fee.
In August 2024, Mr X met with officers of the care provider to discuss his complaint. After that meeting, they wrote to him stating their view that “the weekly fee that Avery are charging is what you had initially signed on the contract to pay”, asserting that this fee did not include the FNC rate, and saying this was shown in Appendix A of the contract because “FNC is paid separately by the NHS and on top of the weekly fees”. Dissatisfied, Mr X complained to the Ombudsman, which asked the care provider to carry out an internal investigation and respond.
The care provider’s response to Mr X had maintained there was no ambiguity in the contract and that no FNC repayment was due. Mr X then returned to the Ombudsman with a further complaint. In response to the Ombudsman’s formal enquiries, the care provider said a “human error” by the home administrator meant two boxes in the funding breakdown were completed with the same details, so the gross fee and fee after deduction both showed £950. It explained that Mr Y had been “admitted as a residential placement” and that the home had submitted a further FNC application on 13 February 2023. The care provider accepted that the gross fee and the fee after FNC deduction should not have been the same figure and apologised to Mr X for the confusion, but said it still saw no reason to reimburse him because, in its view, this was a residential placement and there was “no ambiguity” in the terms and conditions. It also said it had revised its staff training to avoid a recurrence of this sort of contractual error.
Mr X, in representations to the Ombudsman, argued that Avery now contended that later FNC payments had to be added on top of the weekly fee because the contract listed an FNC value of zero, but that section 5.4 of the contract did not say that this approach applied where the FNC value was shown as zero. He further pointed out that Avery had continued to provide nursing services without the benefit of FNC for an extended period, which suggested the agreed fee was sufficient to cover nursing care without needing to add FNC on top, and he queried how credible it was that Avery would have provided nursing care “free of charge” to a self‑funded resident for so long.
In its analysis, the Ombudsman noted there was nothing in the signed contract to indicate that Mr Y’s placement at Aran Court was “residential” rather than nursing. The NHS’s decision to backdate FNC to June 2022 matched Mr X’s account that an FNC assessment had been completed before Mr Y was discharged from hospital to his first care home.
The Ombudsman considered it unclear why the care provider made a further FNC application on 13 February 2023, but held that this later application was irrelevant because the original FNC application had already been made and granted, and any confusion about the initial mis‑payment to the first care home was a matter between the care provider and the NHS, not the fault of Mr X.
What was found
The Ombudsman found that Mr X had signed the contract in the expectation that, once FNC was confirmed and backdated, the care provider would refund those amounts to him in line with the clause stating that “any payments made by self‑funded residents shall be refunded should the NHS choose to backdate FNC payments”. The Ombudsman held that the administrative error in completing the funding breakdown and the unclear way the fee had been set out were the care provider’s fault, not Mr X’s. The Ombudsman also found that the NHS had chosen to backdate the FNC payments and that the care provider had not made clear to Mr X that the £950 weekly fee he agreed to pay did not include the nursing contribution; from Mr X’s perspective, consistent with the contract wording, he believed he was paying the “full gross self‑funded fees” only until FNC was paid, at which point he expected to receive a refund of any overlapping amounts.
In the “Action” section, the Ombudsman recorded that the care provider had agreed that, within one month of the final decision, it would honour the contract and reimburse to Mr X the FNC payments it had received from the NHS. The care provider also agreed to provide evidence of compliance with this action to the Ombudsman. The Ombudsman then completed the investigation, deciding that the care provider’s actions had caused injustice to Mr X, which would be remedied by carrying out the required reimbursement.
The Ombudsman found the care provider at fault for an error in the care home contract and funding breakdown that misled a self‑funding relative about the effect of FNC on fees, and for failing to honour clear refund wording once FNC was backdated and paid. The provider’s position that this was simply a residential placement and that FNC should be treated as an additional payment “on top” of the fee was not supported by the signed contract, which did not describe a residential‑only placement and expressly promised that backdated FNC payments would be refunded to self‑funders. This fault caused injustice to the complainant in the form of financial loss, confusion and frustration after choosing the care home in reliance on the written terms and the manager’s assurances about nursing fees and refunds.
The Ombudsman also noted regulatory expectations that care providers give people clear information about contractual terms, costs and payment responsibilities, and referred to previous 2018 Ombudsman guidance which says that the Ombudsman’s starting point with FNC complaints is to look at the contract and any standard information given to the resident or their representative before they moved in. The Ombudsman interprets contracts on an ordinary reading and may find fault where a contract contains conflicting terms. The care provider told the Ombudsman it had revised its staff training to avoid repeating this type of contractual error, and it agreed to abide by the contract and reimburse all FNC payments received for this placement to the complainant within one month of the final decision, with no separate compensation figure specified beyond this reimbursement.
Points to note for councils, professionals, people using services and their carers, advocacy groups and members of the public
The report refers to CQC guidance which states that providers must give people information about the terms and conditions of their care, treatment or support, including the expected costs and the requirement to pay for their care, treatment and support. This, together with the Ombudsman’s 2018 guidance on FNC payments provide a useful basis for considering this kind of situation.
The report could have made reference to a contractual and charging‑law issue about how self‑funder fees interact with NHS Funded Nursing Care. Community care law and public law both expect that when a contract with a provider specifies a personal budget or a funding breakdown, it must transparently show what the fee covers, how public money fits into the picture, and how any overlap is to be treated. Community care law has consistently treated it as unlawful when commissioners or providers present an opaque figure that folds multiple elements into a single number with no clear rationale, particularly where the person is being asked to pay charges on top of public funding. That same logic applies in the self‑funding context here: if a standard form contract tells the family that any payments made by a self‑funding resident “shall be refunded” if the NHS later backdates FNC, the provider cannot then re‑characterise FNC as being “on top” of the agreed fee without rewriting the deal. The Ombudsman correctly identifies that the “human error” in completing the funding breakdown is not the son’s responsibility.
The analysis could have engaged with the wider public law principle that providers must avoid double recovery when NHS money and private fees cover the same nursing input. A public body may not lawfully take two sources of funding for the same cost in a way that amounts to double payment, and that principle sits just as firmly in community care law when a provider is holding both NHS FNC and the full private fee that was negotiated on the basis that it covered nursing services.
Where an NHS body funds services sideways through grants or specific contributions for social care clients, the council must structure its charging so as to avoid double recovery and to respect Article 1 Protocol 1 property rights, particularly for severely disabled claimants whose benefit income is heavily exposed to social care charges. Although this case concerns FNC paid direct to a private provider, the same underlying concern applies: keeping both the full private fee and the backdated FNC for the same nursing input risks offending the basic community care law principle that public funding is meant to reduce what individuals have to pay, not leave them in the same or worse position while the provider’s income quietly rises.
The report does not mention the basis on which Mr X was managing his father’s finances. The implication, although this is not completely clear, is that Mr Y lacked capacity to manage his own finances. If this was the case, and if Mr X did not have authority to manage Mr Y’s finances, then the Care and Support Statutory Guidance makes it clear that an application to the Court of Protection (for the appointment of a Property and Affairs Deputy) would be required.
Please use the following link if you want to read the original Local Government and Social Care Ombudsman’s Avery Homes Kirkstall Limited (24 015 212) 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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