Summary: Ms X complained the Council underpaid her special guardianship allowance (SGA). The Court has found the Council’s approach to calculating SGA was flawed. The Council wrongly stated the court decision quashing its policy could not be applied retrospectively and it could not refund underpaid SGA prior to July 2022. This was fault and has caused injustice. The Council will apologise and refund underpayments to 1 January 2020 for all special guardians affected. The complaint is upheld.

The complaint

1. Ms X complains, via her representative, that the Council has paid her an incorrect allowance as Special Guardian since October 2020. Following judicial review proceedings (taken by another Special Guardian against the Council) the Council’s approach to calculating allowances was quashed. The Council’s policy stated it followed the Department for Education model, but the Court found this was not the case. It found the Council’s practice disadvantages Special Guardians compared to the Department’s model because the Council fails to take account of other dependent children in the family.
2. The Council accepted the Court’s decision, revised its practice, and recalculated allowances for all Special Guardians from the date of the Court’s decision in July 2022, refunding any underpayments due.
3. The Council calculated Ms X was due a higher award for the period from July 2022. Ms X wants the Council to recalculate back to October 2020, when she started to receive the allowance, not July 2022. The Council has refused to do so because it says the Court’s decision is caselaw and this is not retrospective. Ms X says the effect of the Court’s decision to quash the Council’s policy is that it was never lawful, and it is as if it never existed.

Back to top

The Ombudsman’s role and powers

4. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
5. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
6. We may investigate matters coming to our attention during an investigation, if we consider that a member of the public who has not complained may have suffered an injustice as a result. (Local Government Act 1974, section 26D and 34E, as amended)
7. If we are satisfied with an organisation’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

Back to top

How I considered this complaint

8. I have considered relevant law and statutory guidance including:
• Adoption and Children Act 2002
• Children Act 1989
• Special Guardianship Regulations 2005 (as amended in 2016) (‘The Regulations’)
• Special Guardianship guidance, January 2017 issued by Department for Education (‘the Guidance’).
9. I have considered Focus Reports issued by the Ombudsman:
• Family Values: Council services to family and friends who care for others’ children, 2013
• Firm Foundations: complaints about council support and advice for special guardians, 2018.
10. I have considered information provided by Ms X and the Council including:
• Complaint documents
• Financial calculations of Ms X’s Special Guardian Allowance (SGA)
• Council’s policy / ‘working practice’ guidance to calculating SGA
• Department of Education Means Test Model for adoption and special guardianship financial support
• Council’s internal review following Court decision quashing the Council’s ‘working practice’
• Court Judgment
• The Council’s response to my enquiries.
11. I have also spoken to Ms X / her representative by telephone.
12. Ms X’s representative and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.
13. Under the information sharing agreement between the Local Government and Social Care Ombudsman and the Office for Standards in Education, Children’s Services and Skills (Ofsted), we will share this decision with Ofsted.

Back to top

What I found

Special guardians

14. Under a special guardianship order the courts appoint someone, often extended family members, like grandparents, to be a child’s special guardian who will then become responsible for all day to day decisions about the child.
15. Councils are required to make arrangements for the provision of special guardianship support services, including financial support, as prescribed in The Regulations.
16. The Guidance says special guardianship arrangements should not fail just because of financial problems. Financial support should be paid to help secure a suitable arrangement where this is not possible because of a financial obstacle.
17. Financial support is referred to as special guardianship allowance (SGA). Any support, including financial, should be reviewed at least annually.
18. Regulation 13 requires the Council consider:
• The special guardian’s financial resources including any tax credit or benefit available to them.
• The amount required by the special guardian in respect of reasonable outgoings, commitments and daily living expenses (but not outgoings in respect of the child)
• The financial needs that relate to the child and resources of the child.
19. SGA is means tested and the guardian may end up receiving no payment.
20. When deciding to provide support services, councils must give notice of the decision including the reasons for it. Where it is to provide financial support, the notice must contain information about the method used to decide the amount of support.
21. The Department of Education has developed a model means test for special guardianship financial support. It is not a statutory requirement for local authorities to use this model, however the Department does recommend its use to establish a fair, consistent, and equitable approach between local authorities.
22. The model means test says if a family receives income support it recommends the Council pay the family the maximum payment without assessing their income / expenditure in the test and the figure paid to the family should not include any deductions for child benefit.
23. The model means test says general household expenditure should be calculated using income support allowance rates but increased by 25%. The rates set out a personal allowance for single adults, couples and dependent children in the family. In completing the means test council will need to calculate the appropriate figure for the family being assessed. For example, for a household with a couple (parents) and two dependent children the core regular family expenditure should be…made up of couple’s allowance…and 2 allowances for dependent children.

Council’s policy and Court decision

24. The Council developed its own working practice or model for calculating SGA. The working practice document said that while it was not a requirement for local authorities to use the Department of Education’s model means test, its working practice followed the Department’s model.
25. The Council says its model had been in place since at least 2018, but the exact date is not known.
26. The Court found the Department for Education and Skills (DFES) introduced the model means test. It found this must have been at some point between 2002 and 2007, because in 2007 DFES was replaced by the Department for Children, Schools and Families, which was in turn replaced by the Department for Education in 2010.
27. The Court found it likely the Council formulated its Working Practice during the existence of DFES (that is before 2007) as it quotes verbatim the wording of the DFES model.
28. The Council’s model did not calculate general household expenditure specifically, but allowance was made by disregarding 25% of household income. In addition, a personal allowance for the carer (single person or couple) is established. This is based on income support rates.
29. In July 2022 the Court quashed the Council’s working practice policy on the basis that in calculating general household expenditure the Council only applied a personal allowance for the carer(s) based on income support rates but did not apply a personal allowance for dependent children in the family.
30. The Court found that as the Council had decided to means-test by reference to the Department’s model, it could not ‘proceed to destroy the coherence of that model’ by ignoring other children within the family. The Judge made a quashing order.
31. The Council then amended its working practice and carried out an internal review. It decided it would recalculate SGA for all affected families back to 20 July 2022, the date of the Judicial Review decision.
32. The Council decided it would not backdate earlier than 20 July 2022 because ‘the law does not retrospectively impose case law which means that whilst the judge did find one element of Plymouth City’s Council working practice method to be ‘unlawful’, it was only declared unlawful from 20 July 2022 onwards. For this reason the council is unable to provide…payments pre-dating 20 July 2022’.
33. The Council sent identical letters to other Special Guardians.
34. The Council told me there are potentially 112 special guardians affected by the Court’s decision.

Key facts

35. The Council placed a relative’s child with Ms X in 2018. Initially Ms X did not receive fostering allowance, but the Council then agreed a formal foster placement pending special guardianship assessment. In 2018, Ms X was receiving £143 per week financial support from the Council for the child.
36. Under transitional support for special guardians, financial support continued at this level for two years after the special guardianship order was made in 2018.
37. In October 2020 Ms X was means tested for SGA using the Council’s working practice and her award was reduced to £nil. From March 2021 a low level of weekly support was provided, but this was approximately £100 per week below the level in 2018-2020.
38. In 2022 Ms X became aware of the judicial review decision via a representative known to the special guardian who had brought the court proceedings. Ms X was also informed by the Council when it carried out a new calculation following its review of its working practice. Ms X’s award was increased to £128.55 per week effective from 20 July 2022.
39. The Council has declined to backdate the award to Ms X, or other affected special guardians, further than July 2022.
40. Ms X and her representative say the Council is wrong to state the Court decision means it cannot backdate before July 2022. Ms X wants her award backdated to October 2020, the date when transitional support linked to fostering allowance ended.

Analysis

Scope of investigation / Jurisdiction

41. I have exercised discretion to consider other special guardians, who have not complained, but who may have suffered injustice as a result of the Council’s actions. (Local Government Act 1974, section 26D and 34E, as amended)
42. I have exercised discretion to consider events more than twelve months ago. The representative acting for Ms X in this complaint also provided to support to the special guardian in the legal case and assisted with that special guardian’s complaint about financial support in 2019.
43. In Spring 2019 Ms X’s representative made a freedom of information request to the Council for a copy of its working practice as part of a complaint brought by the other special guardian. That special guardian made a formal complaint about the level of financial support provided via SGA in September 2019. The issues in that complaint were materially the same as those later considered in the judicial review proceedings.
44. I find the Council was put on notice no later than September 2019 that there was a potential problem with its working practice. The Council has confirmed to me it retains documents for special guardians for many years. I am satisfied it is appropriate for me to consider whether the Council should backdate SGA for affected individuals to 1 January 2020. By this point the Council had had ample opportunity to have investigated the concerns raised in the formal complaint of the other special guardian made in September 2019.
45. Ms X brought her complaint promptly after the judicial review decision and the Council’s decision not to backdate prior to June 2022. I have exercised discretion to consider Ms X’s complaint of injustice back to October 2020.

Fault

46. It is fault by the Council to state the Court’s decision is ‘caselaw’. The Court has not re-interpreted legislation or changed the law about special guardians.
47. The effect of the judicial review decision is to quash an aspect of the Council’s policy that stated it followed the Government’s model when it did not. A quashing order will have retrospective effect unless stated otherwise. The effect of the decision is that the Council’s working practice model has been found to be invalid.
48. Parties can apply to the Court for an order that the retrospective nature of a quashing order is restricted, but the Council did not do so in this case.
49. Ms X and her representative say, and I agree, the quashing order means the Council’s working practice has always been unlawful and it is as if it never existed. I find there is no restriction on the Council’s ability to remedy injustice prior to July 2022.

Injustice to Ms X

50. I find the Council may have underpaid Ms X SGA from October 2020 to July 2022 due to faults in its working practice. If so, this would be an injustice. The Council advises me that Ms X withdrew her claim in October 2020 when she was self employed and requested a new assessment in March 2021.

Injustice to other special guardians

51. The Ombudsman has issued Guidance on Remedies setting out our approach to recommendations:
• When recommending a remedy our primary aim is to put people back in the position they would have been in if the fault by the Council had not occurred.
• Where the organisation failed to pay money due to the complainant, we may include a recommendation for that sum to be paid. We would not normally consider including interest in the remedy unless the period of delay was more than six months and the payment itself is more than £1,000. We usually base the calculation on interest on the average price index for the period.
• We always consider what is fair and proportionate based on the individual circumstances of each case, including how long ago events occurred and whether records are likely to still be available.
52. I find the Council is likely to have underpaid other special guardians due to the flaws in its quashed working practice, in particular the failure to take account of other dependent children within a family.
53. The Council has confirmed it has used the flawed working practice since at least 2018. The Court found it may have been in use as long ago as 2007, or even before.
54. In considering what is proportionate and pragmatic, I have decided to recommend the Council remedy injustice for other special guardians affected back to 1 January 2020. The Council received a formal complaint in September 2019 which would have alerted the Council to potential financial hardship arising from its method of calculation. By setting the date for my recommendation at 1 January 2020 allows for a period within which the Council could have investigated the concerns and reviewed its working practice. The Council is likely to have sufficient documents for this period to reach accurate calculations and given the number of special guardians potentially affected recalculating SGA for this defined group is a task which is achievable by the Council within six months.

Back to top

Agreed action for Ms X

55. Within four weeks of my final decision the Council will apologise to Ms X for the fault identified in this decision statement.
56. Within eight weeks of my final decision the Council will invite Ms X to explain why she considers her claim should be recalculated back to October 2020 and not March 2021. It should consider her response and then recalculate Ms X’s SGA for the period October 2020 or March 2021 to July 2022 and refund any underpayment due.
57. If the sum due is more than £1000 the Council should pay Ms X interest from October 2020 to date based on the average price index.
58. The Council should provide us with evidence it has complied with the above actions.

Back to top

Agreed action for others affected

59. Within twelve weeks of my final decision, the Council will write to all special guardians potentially affected and inform them we have investigated another case, inform them of the outcome of our investigation and its implications, and invite special guardians who consider they may be affected to contact the Council so it can reassess their SGA back to 1 January 2020.
60. Where there is evidence a special guardian has previously raised a complaint about financial support, and they have been underpaid by more than £1000, the Council should consider the payment of interest.
61. The Council should complete all recalculations within six months of my final decision.
62. The Council should at the conclusion of this piece of work report to the Ombudsman how many special guardians have had their SGA recalculated and the total sum repaid.

Back to top

Final decision

63. I have completed my investigation. The Court has found the Council’s approach to calculating SGA was flawed. The Council wrongly stated the court decision quashing its policy could not be applied retrospectively and it could not refund unpaid special guardianship allowance prior to July 2022. This was fault and has caused Ms X and other special guardians injustice. I am satisfied the agreed actions set out above are an appropriate remedy for the injustice caused.

Investigator’s decision on behalf of the Ombudsman

Back to top

Investigator's decision on behalf of the Ombudsman