Local Government Ombudsman warns that Local Authorities are responsible for the actions of the providers they contract with.

This is quite a strong statement but to a certain extent the headline is correct. A recent case referred to the LGO highlights the complexities of third party top ups and the need for providers to be extra careful when organising top up arrangements with the relatives of residents.

So, what happened?

The LGO received a complaint that a care home had asked a family to top up the Local Authority (LA) fees for payment direct to them. The resident had been given a list of care homes to choose from who were on the LA list of those who accepted their fee levels. The LA arranged the placement but the care home arranged separately with the relative to provide the top up to meet the home’s private fee level. The resident, however, jointly owned a property with a relative. The property was let and there had been some discussion as to whether the value of the property should be included in the resident’s financial assessment.

It wasn’t until January the following year that the care home invoiced the resident for the difference between the LA fee and the care home private fee. Also in January, the LA wrote to the resident notifying her of the contribution she should make towards her fees. This was repeated to the relative in June the same year at which point the relative advised the LA that they had been paying the top up directly to the care home. Then in March the following year the LA wrote to the care home to advise that the resident was not self-funding and the agreed contractual fee was the LA fee. They also instructed the relative to stop paying the top up and that the arrangement was invalid.

The LGO found that because the contract was between the LA and the care home, the LA was responsible for the actions of the care home. Although the LA claimed that the care home had acted outside its contractual authority, the care home stated that because the placement was subject to a 12 week disregard then it acted properly since the client was self-funding since she owned property and the LA in question does not support private fees. This left the care home with the only option but seek payment directly from the relative. The LA was held responsible in this case and has arranged to reimburse the relative.

Apparently, this sort of administrative confusion is not isolated to this single case but quite prevalent. Indeed about 25% of enquiries to the LGO are about this type of question.

Implementation of the Dilnot proposals (as amended) will only add to this confusion between care homes, residents, their relatives and Local Authorities. It’s not yet clear whether residents in this category of transition from self-funding to state funding will be able to top up the fees themselves but the strong message from this case is for care providers to ensure they have open and well recorded discussions with their LA before entering into top up arrangements with residents and their relatives, preferably before the placement takes place. It would not be good policy to rely on this finding since subsequent LGO cases may find differently once the introduction of Dilnot starts to take effect. A good example of how complex this subject will undoubtedly become is shown at the link in the Independent Age Report entitled The Care Bill, top-ups and the emerging crisis in residential care funding.

Julie Hopkins

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