Date of decision: 24 July 2025
Summary
A man Mr X complained that the Council failed to involve his family when deciding his adult brother with a learning disability could not manage his finances, referring him to an unsuitable third-party service. The man later uncovered financial concerns and struggled to restore his brother’s benefits after the third party’s abrupt resignation, leading to considerable distress and inconvenience.
What happened
Mr Y, an adult with a learning disability, had lived with co-tenants in supported independent accommodation managed by Care Provider A. His parents helped with his finances. In late 2022, Care Provider A informed the Council it could not continue supporting Mr Y with his finances due to a conflict of interest. The Council then assessed Mr Y’s mental capacity and decided he could not manage his finances. Without involving Mr Y’s parents, the Council referred him to Organisation Z, a third-party appointee, to manage his benefits and finances. The Council accepted it wrongly recorded Mr Y did not have any family actively involved, so failed to consult his parents about this best interests decision (although merely referring the person decided nothing). In due course, the DWP approved Organisation Z as Mr Y’s appointee. Organisation Z was not known to the family and worked independently.
Towards the end of 2023, Care Provider A was replaced by another provider, and Mr Y’s family discovered Organisation Z’s involvement almost a year later. Around that time, one co-tenant P moved out and another, ‘L’, passed away. ‘P’ was supported to manage his or her money by someone known to them as ‘Q’. The co-tenant who had died had a solicitor in place to manage his or her estate. Q withdrew a large sum of money from the co-tenants’ bank account to protect P’s financial interests. Soon after that, Q realised that more than P’s share had been withdrawn; Q had not known money was owed to L’s estate. Q knew Mr Y’s family so explained the mistake, and told the family they were working with L’s solicitor and and Organisation Z to resolve the issue.
In March 2024, Mr X contacted the Council. He said that Organisation Z had been supporting Mr Y without the family’s knowledge and now would not share information with them about Mr Y’s finances; and a large sum of money had been removed from the bank account Mr Y shared with his co-tenants. Mr X said he was not sure who had been managing the bank account and was concerned about this. The Council incorrectly told Mr X in April that the issue had been resolved and the withdrawal was by a solicitor, and acknowledged its earlier failure to consult the family in the 2022 best interests decision.
Following Mr X’s request for Organisation Z’s removal, the Council said Mr X should apply to be his brother’s deputy and Organisation Z would resign once he had the authority. Unsatisfied, Mr X raised a safeguarding concern in June 2024. The Council investigated, confirmed Q had withdrawn the money and that Organisation Z had not mismanaged Mr Y’s finances. A new mental capacity assessment in September 2024 again found Mr Y lacked capacity, with the Council agreeing his siblings should support him. Organisation Z resigned. DWP subsequently stopped Mr Y’s benefits, and Mr X had to resolve the disruption, with benefits reinstated and backdated in January 2025. Complaints by Mr X were answered within required timescales but included some errors in information about the bank withdrawal, which the Council later corrected with an apology.
What was found
The Council failed to involve Mr Y’s family in the 2022 capacity assessment and best interests decision for appointing Organisation Z (the Council did not ‘appoint’ the organisation; it endorsed its application to the DWP), and did not keep proper oversight or records, breaching required practice under the Mental Capacity Act and Care Act. This was fault.
The Council accepted it was at fault for not involving Mr Y’s parents in the late 2022 mental capacity assessment and best interest decision. It apologised and said it had issued reminders to relevant staff about what process the Council should follow in those circumstances. The Council initially gave Mr X incorrect information about financial withdrawals, but quickly apologised and corrected this.
No financial or safeguarding abuse by Organisation Z was found, and there was no delay in complaint responses. The Council had taken steps to ensure the arrangement with Organisation Z had not caused Mr Y any financial loss. Some distress and inconvenience were caused, especially due to the interruption of benefits and the effort needed by the family to resolve these issues, but there was no additional financial loss.
The Council’s apology and review of decision-making oversight were considered sufficient remedies. In response to Mr X’s complaint the Council said it would review whether it should have more formal contractual arrangements in place with appointee services to which it directed people. The Ombudsman welcomed this action by the Council.
Points to note for councils, professionals, people using services and their carers, advocacy groups and members of the public
The law says that where someone may lack capacity to make decisions and a suitable representative complains on their behalf, the Ombudsman has discretion to decide what period to investigate. Mr X came to the Ombudsman in November 2024. The Ombudsman decided to investigate what happened from mid-2022 onwards because it was necessary to look this far back to make sense of what had happened and investigate more recent events; and Mr X did not become aware of the issues he complained about until late 2023/early 2024 when he became involved with Mr Y’s care and finances. At this point he had concerns about how Organisation Z had been managing his brother’s finances since 2022. He raised his concerns with the Council about Organisation Z without delay which led to the safeguarding investigation and complaint. The Council completed the safeguarding investigation in September 2024, then the complaint in late 2024, at which point Mr X came to the Ombudsman. Mr X did not delay in bringing his complaint to the Ombudsman. This is useful guidance for practitioners about the timescales for bringing complaints and the periods the Ombudsman will consider.
However, the Ombudsman’s investigator’s analysis gets the function of appointeeship completely wrong. No council can contract with a third party organisation for appointeeship because it is not in the gift of a council in the first place: it can withdraw from offering its own appointeeship services, and signpost the DWP to a concern that the unsupported individual will not be able to manage their benefits. But that is all. Or, if a council wants to, it could try to pay an appointeeship organisation to discharge the council’s own functions as Appointee – have that organisation do the spade work, as it were. That would be a contract, for either help with that function or delegation of that function. We suspect that the DWP would not allow the complete delegation of the function whilst keeping the Appointeeship in the name of the Council-assigned office holder appointed to the role by the DWP.
It is very typical that care providers used to be expected to support people to use their bank accounts despite obvious incapacity – and in situations where even a basically competent application of the Mental Capacity Act (or the law of incapacity to contract, before 2007) would have told a bank manager that the individual had insufficient capacity to agree to be in a joint banking relationship or to provide a parent with signatory status. So lack of legal literacy from that era is still having an impact on care providers and councils, members of the public and elderly parents, even now. Now care providers are paid an insufficient fee to enable them to break even, in many cases, they are understandably looking to shelve additional roles and responsibilities, unless they are paid to discharge them.
Councils on the other hand are either charging for appointeeship or taking the view that a client’s difficulties in this regard do not come within any Care Act eligibility domain. They too are withdrawing from appointeeship, or otherwise charging for it, and hoping that they have some legal authority to do so, under the Localism Act’s general power of competence or an earlier local government act providing for a power to charge for the discretionary provision of services not due under statute, albeit that that statutory provision implicitly assumed capacitated consent to the charge or the service.
Interestingly, it is clear from this report that Worcestershire was treating the cost of the appointeeship service from the third party, as a disregard against the social care charge being levied on the client – which is right, in principle, because it would clearly be disability related expenditure. This meant that there was no financial loss, with regard to the question whether injustice had been caused.
We think all such appointees should be ensuring that this is done, as part of the discharge of their own fiduciary duties as appointees, whether or not they are paid an agreed or a reasonable rate. They are dealing with the client as a consumer, and are bound to act fairly. They do not require to be FCA regulated because the function is not one that triggers registration with the FVA. In the course of the complaint it had to acknowledge that it had no control over how DWP had managed the handover between benefits appointees and Mr X should complain to DWP about this instead; and that the Council’s investigation had found Organisation Z could not have taken funds from the shared account because it only had access to Mr Y’s separate personal account which his benefits were paid into.
The investigator said that from the Council’s records, and its response to their enquiries, it was unclear:
- why the Council decided Mr Y needed support to manage his finances, but did not consider this to be an eligible need under the Care Act 2014 which it should arrange to meet for him, by commissioning an appointee to help do the work; and
- how Mr Y, who the Council decided did not have capacity to understand or manage his finances, could have entered a contract with Organisation Z without the support of the Council, or anyone else in place to make financial decisions for him.
These are issues with which all third party appointeeship companies should be grappling, in our view.
We are sure that where the person DOES lack mental capacity, the Mental Capacity Act itself provides authority for reimbursement of the appointee of a reasonable amount for the service, but we are not sure how a Court would consider the reasonableness of the kind of charges being made. It is possible of course, that an individual is unable to manage their benefits but still has enough capacity to agree to the weekly charge when first being considered for the service of having an appointee in place, if the person can understand the pros and cons of being with or without an appointee, and a particular appointee, for a fee.
Please use the following link if you want to read the original Local Government and Social Care Ombudsman’s Worcestershire County Council (24 013 950) 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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