Date of decision: 08 July 2025
Summary
A vulnerable woman with dementia in residential care had no access to her Personal Expense Allowance from her benefits and pension for nearly four years because Birmingham City Council failed to put even an appointee in place. She relied on staff charity for essentials.
What happened
In 2020 a woman with dementia, lacking capacity to manage her finances, moved from Care Home A to Care Home B. Her financial arrangements did not transfer and she stopped receiving her statutory Personal Expense Allowance.
In November 2021, the manager of Care Home B contacted Birmingham City Council requesting an advocate to support with her finances. There was no evidence to show that the Council ever acted upon this request.
In September 2022, the Care Home B manager contacted the Council again, asking what was being done to ensure that she could access her finances, stressing that the arrangements had failed to transfer. The Council said it would seek an appointee to manage her benefits but could not give a timescale.
The Council explained later that due to long waiting lists and a lack of capacity within its in-house appointeeship team, the woman had to join a waiting list for appointee services elsewhere.
From 2022 onwards, a family representative Miss X regularly chased the Council. During this period, the woman received no Personal Expense Allowance and was wholly dependent on Care Home B’s goodwill and staff contributions for clothing, toiletries and chiropody.
In January 2024, Miss X, acting on her behalf, made a formal complaint to the Council, noting that the Care Home manager had alerted the Council 18 months earlier and nothing had been done. She asked for urgent steps to give the woman access to her allowance and for the Council to review its systems so others would not suffer similarly.
In February 2024, the Council admitted responsibility. It confirmed the financial arrangements had not transferred when she moved into Care Home B, apologised for the delay, and confirmed it had applied for an appointee. It acknowledged it had failed to resolve this sooner, offered £400 compensation for distress and hardship, and noted that the complaint would be used for service improvement.
Following this, Miss X queried how the Council would monitor and progress the appointee referral, and she provided Care Home B’s bank details so the £400 could be used to buy clothes for the woman.
By December 2024, the Council’s appointeeship team regained some spare capacity and formally took over as appointee for her finances. It ensured that her Personal Expense Allowance was again paid to Care Home B. The Council also applied for deputyship. Care Home B confirmed there was no debt owed by her to the home. The Council further stated that no similar failures had affected others in the past 12 months.
What was found
The Ombudsman found Birmingham City Council at fault under the Care Act 2014 and Mental Capacity Act 2005 for failing to ensure proper arrangements for the woman’s finances after her 2020 move, despite being alerted repeatedly from 2021. This prolonged failure deprived her of her statutory Personal Expense Allowance for nearly four years, causing distress, hardship, and reliance on staff charity. The situation was remedied when the Council finally assumed appointeeship in December 2024 and paid £400 to acknowledge the injustice. The Ombudsman concluded the injustice had been adequately remedied but confirmed significant service failure had occurred.
Points to note for councils, professionals, people using services and their carers, advocacy groups and members of the public
We do not know whether this woman was a private client of the care home or funded by Birmingham, but either way, someone was spending money on her care home fees, and we assume it was either someone with access or someone being paid under an old standing order on a joint bank account, or through signatory status limited to one account? Appointeeship would cover benefits and a pension, but if there was no-one appointed, it’s hard to guess why her income was going into separate accounts, and thus one was accessible for fees, and the other needed authority from the DWP or the Court of Protection.
The charging team was obliged to leave the PEA to the resident as a matter of statutory duty.
We wonder what arrangements had been operated with care home A, which were successful? It may be that that care home management had had the woman’s informal consent from before her loss of capacity, but we really think that educational point for the public could have been made more clearly.
A missed legal point is that, when mental capacity is lost, the council must swiftly act to protect vulnerable adults’ human rights under the Mental Capacity Act 2005 – specifically the requirement for the least restrictive intervention, but deputyship is wider and more effective than mere appointeeshiip.
Local authorities could implement fail-safe procedures that automatically trigger financial safeguarding action when vulnerable adults move between settings.
Please use the following link if you want to read the original Local Government and Social Care Ombudsman’s Birmingham City Council (24 009 158) 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.
Did you enjoy this analysis? Want to stay informed with our weekly Alert Service?
Then do click here to find out how you can receive the latest insights from experts and commentators and stay updated on key judicial decisions, ombudsmen’s reports, and critical law and policy changes, all for just £50 per YEAR and sent straight to your inbox or WhatsApp!