Ombudsman lifts lid on top-up charges
– ‘providers cannot charge for service already paid for by councils’
Caring Times, November 2013
A recent decision by a Local Government Ombudsman (LGO) concerning the charging of a “top-up” fee by a private care provider is likely to change the nature of future contracts for publicly-funded care home placements.
Local Government Ombudsman Dr Jane Martin has reminded councils across England that they are responsible for the actions of the care homes they work with. The reminder follows an LGO investigation into Merton Council in which a contracted private home, Sutton Court Care Centre, asked a family to pay top-up fees – which the LGO says they had no right to demand.
The issue surfaced when the family of an elderly woman contacted the council about having to pay the difference between the allowance their relative was entitled to from the council and the amount charged by the care home.
The woman had been living at the home on a council-funded placement and the family believed they had already been paying the woman’s contribution, but it later transpired that the sums the care home had requested were a top-up to make the fee the same as for private residents.
In her report, Dr Martin said the assessed financial contribution by the family was not payable to the care home but to the council and said that additionally, as the contract for care was between the council and Sutton Court, there should have been no fee negotiation between the care home and the woman’s family. The care home was not entitled to any more funding than the council’s usual rate.
“I know from the many complaints that we receive that this is not an isolated case,” said Dr Martin. “The law is clear: it says that the actions of the care provider in carrying out these arrangements shall be treated as actions of or on behalf of the council. Therefore I hold the council responsible for the actions taken by the care home provider in seeking to extract extra funding from the family.
“I hope my report will serve as a warning to other councils that they are responsible for any contracted providers’ activities, whether they have instructed them to act or not.”
Following the LGO report, Merton Council said it would work with the care provider to reimburse the family for the extra money they paid directly to Sutton Court in top-up charges.
Peter Grose, a specialist care sector solicitor with law firm Lester Aldridge, said the LGO’s decision, while not binding on other local authorities, was of strong persuasive value and would be a cause of concern to both local authorities and care home providers.
“The decision makes the simple point that where there is a local authority contract covering the cost of care and accommodation, then the care provider cannot have another contract for the same care and accommodation with the service user or his or her family,”“ Mr Grose told Caring Times.
“Although not specifically mentioned in the decision, the National Assistance Act 1948 (Choice of Accommodation) Directions 1992 (as amended) make it clear that, subject to certain conditions, a third party (but not the service user himself) can top-up the fee. The most important condition is that the contract is signed by the local authority, the third party and the care home provider so that there is one contract for the provision of care and accommodation.”
Mr Grose said that crucially, the Directions state that if the third party fails to make the third party payment then the local authority is liable to pay the whole fee.
“Over the years some local authorities have been unwilling to accept this potential financial liability and many have turned a blind eye to care providers taking a payment from relatives on the basis that this is outside the care contract and the local authority cannot be liable to ‘guarantee’ that third party payment,” he said.
“This Ombudsman’s decision will put an end to that practice, not least because it states that the local authority will be liable to refund to third parties any payments that are made under such arrangements. The only way in which such third party payments may be made in the future will be on the basis that the payment is for elements of care or accommodation which are clearly not covered in the local authority placement contract.”