Why are Local Authorities still getting it wrong?

Deprivation of capital – new guidance issued by the Local Government and Social Care Ombudsman.

We last wrote on this topic in October 2020, when we asked the question “is the Local Government Ombudsman getting it right on deprivation decisions?”. Our opinion then was that more clarity was needed on this issue, which can leave many people wrongly accused of deliberately depriving themselves of capital, with all the associated anxiety coming at what might already be a stressful time.

Deprivation decisions continue to provide a rich seam of complaints made to the LGO, and their recently published guidance on this issue should provide a welcome clarity for anyone on the wrong side of a council’s decision.

The LGO identifies three common themes where councils have erred in arriving at a deprivation of capital decision:

• failing to follow the law and guidance on the test to be applied to determine if deprivation has occurred;
• treating all gifts as a deprivation of capital;
• failing to provide reasons for the decision, and/or not recording how the decision was reached.

This is familiar ground, and our experience of these matters is that councils routinely adopt one or all of the approaches outlined above, without having first undertaken a proportionate investigation into the issue.

Other unusual procedural errors highlighted in the guidance include failing to calculate notional capital correctly, and somewhat bizarrely, asserting that a person spending more than the statutory Personal Expenses Allowance whilst they were a self-funding resident, had deliberately deprived themselves of capital to avoid care fees.

As we noted in our previous article, councils are often pre-disposed to ‘see’ deliberate deprivation in situations where there is no evidence to suggest this has taken place. The LGO guidance emphasises this error in approach, particularly as concerns gifting, stating that “councils need to avoid taking a blanket approach”, and must instead take all the relevant factors into account before arriving at a decision.

The fact that this guidance was necessary speaks volumes as to the poor level of decision making by councils on this issue. It is hoped that the guidance will go some way towards providing the public with the much needed confidence which has been sadly lacking, that these decisions will more frequently be made to the appropriate standard.

The LGO guidance is available here.