Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report

1) Executive Summary

1.1. This report identifies eleven debts of over £5,000 where it has not been possible to recover the amount due from debtors and for which Executive Member approval is required for write off.

1.2. The report identifies two write-backs of over £5,000 that are required to be reported to the Executive Member for information.

1.3. The report provides a summary of all the debts written off during 2008/09.

2) Contextual Information

2.1. Hampshire County Council's financial regulations and procedures, as amended in April 2007, set out the arrangements for debt write-off as follows:

Up to £1,000	County Treasurer to authorise
Between £1,000 and £5,000	County Treasurer in agreement with the Chief Officer.
Between £5,000 and £50,000	Joint report from Chief Officer and County Treasurer for approval by Executive Member
Greater than £50,000	Approval by the Leader

3) Finance

3.1 Debts already written off

The following debts totalling £238,110.62 (Total 2007/08 - £158,288.38) have been written off during 2008/09:


· 215 debts with a total value of £163,322.85 relating to clients in independent sector residential homes (Total 2007/08 140 debts - £91,332.80).

· 63 debts to the value of £36,910.34 relating to clients in County Council homes (Total 2007/08 48 debts - £29,143.35)

· 180 debts to the total value of £37,877.43 for non-residential charges (2007/08, 192 debts - £37,812.23).

3.2 Assuming the debts referred to above are agreed for write off, the total write off figures for 2008/09 will be £340,986. This represents about 0.43% of the budgeted income for the Department of £79.3m. This compares with £208,281 for 2007/08 which represented 0.27% of the budgeted income.

4) Performance

4.1. For 2008/09 the actual write offs compared to the individual maximum write off targets is shown below.

	Income Actual	Target as % of actual	Target	Actual	Actual
	£000s		£000s	£000s	%
Residential	38,710	0.40%	154.8	303.1	0.78%
Non-Residential	8,520	0.50%	42.6	37.9	0.44%
TOTAL	47,230	0.42%	197.4	341.0	0.72%

4.2 Overall, actual debt written off in 2008/09 is 0.72%, which is £0.30% above the total target figure . For non-residential care the actual write off total is 0.06% below the target. The actual write off total for residential care is 0.38% above the target.

5) Other key issues

5.1. Income management procedures ensure that debts are minimised as much as possible and appropriate action to try to recover debts is taken in all circumstances.

5.2. Under the arrangements for Safeguarding Adults work is being undertaken in partnership with the police, the crown prosecution service and representatives of banking organisations to raise awareness of financial abuse and the improve policies and procedures for preventing such abuse taking place and to address the issue as a crime where it does occur.

5.3. From 2003 the debt recovery process was strengthened by the formation of the Financial Assessment and Benefits (FAB) team. The team is dedicated to ensuring that the initial financial arrangements are thoroughly conducted so that the client's benefits are maximised and that arrangements around Power of Attorney are robust. This role was previously undertaken by care managers.

5.4. The FAB team also has a Safeguarding role to play as they are trained to spot and report to the care manager concerns around financial and non-financial issues relating to the client.

5.5. Sometimes recovery is not achievable or would involve disproportionate legal and professional fees and staff-time to make pursuit of the debt cost effective. Where appropriate, legal advice is sought either directly or through the Financial Assessments Panel.

5.6. The Financial Assessments Panel draws representation from Revenue Services, Adult Services Devolved Finance Unit, Adult Services Department and Legal Services from the Chief Executive's Department. The Panel reviews individual cases of debts greater than £1,000, makes recommendations and ensures further action is taken as appropriate and where possible.

5.7. The following debts have been considered by Panel who have agreed that either no further action is available or that further action will not result in debt recovery.

6) Debts recommended for write off

6.1. The following debts are recommended for write off.

Client 1 11,000.54
Client 2 8,013.33
Client 3 5,432.88
Client 4 5,226.76
Client 5 22,116.09
Client 6 7,750.91
Client 7 8,134.44
Client 8 14,688.48
Client 9 5,526.33
Client 10 7,656.28
Client 11 7,229.20

Total 102,775.35



Client 1 (deceased) - £11,000.54


6.2. The client had been in permanent residential care since March 2005. To begin with all invoices and correspondence were sent to the client's relative, who claimed on the financial assessment that he was the client's appointee for benefits. However, it was not possible to confirm this as the client's relative refused to provide any documentary evidence.

6.3. Despite repeated requests from the income section no payments were made by the relative who claimed that correspondence was going missing as he moved from one location to another. Finally, in June 2006, after failing to honour a direct debit agreement to pay off the arrears, a notice of legal proceedings was sent to the relative at his last known address. His landlord informed the income section that the relative had left the property suddenly and left no forwarding address.

6.4. In August 2006, following no contact from the relative, the Council looked to revoke their appointeeship for the client's benefit. However, the Department of Work and Pensions (DWP) had no trace of the relative having taken up the appointeeship. On that basis the invoices were immediately re-directed to the client at the residential home. These invoices were fully paid on a regular basis.

6.5. In October 2006 the police were contacted by Adult Services to investigate a possible financial abuse issue. However, the police had to stop their proceedings soon afterwards when the client refused to press ahead with any charges as the relative in question was the only one who visited her.

6.6. In September 2007 the relative's new address was traced by Income and the client's file was sent to Legal Services to begin legal proceedings. However, it proved difficult to proceed as the relative had not signed the financial assessment. Also the relative was not the appointee nor was there any power of attorney. The relative also had no assets.

6.7. Consideration was given to pursuing the client. However, it has been determined that as the client had virtually no savings, the client could only afford to pay back a minimal sum per month. It is clear that the debt would not be repaid within a reasonable timescale.


6.8. In January 2009 the client died leaving no assets.

6.9. The Panel agreed that the debt could not be pursued and recommended that it be written off.

Client 2 - £8,013.33

6.10. The client has been in permanent residential care since July 2004. To begin with all invoices were addressed to the client's relative who was the appointee for the client's pension.


6.11. Despite repeated requests, no payments were received. In November 2005 the client's relative informed Income that responsibility for the finances was to be passed over to the client's other relative.

6.12. Corresponding with the second appointee was difficult as communication was only ever by telephone with any other contact details being withheld.

6.13. In April 2006 the DWP were contacted to revoke the second relative's appointeeship and from May 2006 the Council's Client Affairs Team took over the handling of the client's finances. Since that date charges have been fully paid. However, no payment could be made for the arrears as it appears that someone with access to the client's bank account had been withdrawing money on a regular basis.

6.14. Legal Services advised that the first appointee could not be pursued. Although she was appointee from the beginning of the residential placement, it was proven that she had no access to the bank account into which the pension was paid. Ongoing traces have failed to find the client's second appointee who it was believed also had access to the client's bank account.

6.15. The last remaining option is to pursue the client for the debt as they are still an Adult Services client. However, the client has no funds so could only afford to pay back a minimal sum per month, which would be insufficient to repay the debt. It was agreed that as the debt that arose was not the fault of the client that it would be unfair to charge the minimal amount.

6.16. The Panel agreed that the debt could not be pursued and recommended that it be written off.

Client 3 (deceased) - £5,432.88

6.17. Since September 2003 the client had been receiving a combination of residential respite, domiciliary and, finally, permanent residential care. The care manager was unable to get the client to sign the financial assessment form for the residential respite care from September 2003 to January 2004. As a result the residential charge was based on an old financial assessment.

6.18. When the revised financial assessment was finally completed in January 2004 it was discovered that the client had capital in excess of £15,000 and, based on this, a revised invoice for the earlier periods was raised. This was sent to the client's relative, who had Power of Attorney at the time but then renounced it in September 2004. He replied that the client would not pay the invoice due to what they regarded was a lack of care by the residential care home. An investigation by Adult Services care management failed to substantiate any of the claims made and it was agreed that there was no reason not to pursue the debt.

6.19. In addition to the residential respite charges outstanding there were also domiciliary care charges unpaid. In December 2004 the domiciliary care being received by the client became chargeable. However, an invoice for the domiciliary care was not sent out until May 2005, at which point the charges amounted to £1,585.91. No payment for the ongoing domiciliary care charges were ever received despite repeated requests for payment.

6.20. In March 2006 Legal Services began proceedings to recover the debt. However, the client passed away in May 2006 before the legal process could be completed. The client's estate continued to be investigated and a sum of £1,934, the balance of funds remaining in the Estate, was recovered.

6.21. There being no further assets, Panel agreed that the debt could not be pursued and recommended that it be written off.

Client 4 - £5,226.76

6.22. In February 2001 Hampshire County Council were informed by the private residential home that the client's account was in arrears. As the client was no longer in receipt of care from the home or Adult Services as all care was now paid for by Health it was agreed that Income should pursue the debt.

6.23. Despite a number of letters chasing the debt no response was forthcoming until May 2004 when the parents of the client (who had a learning disability) telephoned to say that if the debt was pursued they would have to file for bankruptcy. However, despite an invitation to do so by Income the parents failed to provide evidence to substantiate that claim.

6.24. In December 2004 the case was referred to Legal Services to pursue the parents who were believed to have been appointees when the debt arose. However, Legal Services were unable to obtain confirmation from the Department of Work and Pensions or Job Centre Plus on who was appointee. Furthermore, a land registry search revealed that the parent's property was rented from a housing trust so there was no asset on which to raise a legal charge.

6.25. All further efforts to secure payment elicited no response from the client's parents and in June 2008 Legal Services confirmed that as the debt was over six years old it fell under the provisions of the Statute of Limitations Act which meant that it could not legally be pursued any further.

6.26. The Panel agreed in August 2008 that the debt could not be pursued any further and recommended that it be written off.

Client 5 (deceased) - £22,116.09

6.27. The client had various periods of residential care from September 1997. The debt starting to accrue from 2000 when some cheques sent in to cover the fees were sent back by the bank due to insufficient funds in the client's bank account. The client was making payments as part of a divorce settlement of £750 per month though these payments were allowed for in the financial assessment.


6.28. The client's solicitors had informed Income that the client had a share in a property with the client's former spouse in the Far East. This property was on the market so it was hoped that this would help ease the client's financial position. However, in January 2005 the solicitors wrote to say that they had not been able to make contact with the client's former spouse in the Far East.

6.29. In February 2005 a letter was sent to the client threatening legal action unless regular payment towards the arrears was established. Despite setting up a standing order for £50 per month, the client continued to fall further behind on the ongoing charges for care.


6.30. In January 2008 the solicitors advised that as the client was a retired lecturer the Council should contact the Retired Lecturers' Benevolent Fund to see if they could help out with the client's arrears. However, the client passed away in April 2008 before this process could be completed.

6.31. In August 2008 the client's solicitor sent a statement of assets and liabilities. This indicated that there were insufficient funds to pay off the debt as there were other liabilities that took precedence over the client contribution debt. As a result, the Panel recommended that it be written off.

Client 6 (deceased) - £7,750.91

6.32. The client went into permanent residential care in January 2004. Despite poor health the client refused to allow a relative to deal with the financial affairs.

6.33. From the beginning, however, there were problems with late payment and on several occasions cheques were returned by the bank to the Council due to insufficient funds in the client's account. By January 2006 the arrears had reached £7,186.38.

6.34. In March 2006 the client finally set up a standing order of £25 per week to help reduce the arrears. Although, this standing order continued to be paid until the client passed away in April 2008 the debt grew as payment for the ongoing charges did not come in on a regular basis.

6.35. In September 2008 the Panel was informed that there was no money in the client's estate. As a result, the Panel recommended that the debt be written off.


Client 7 (deceased) - £8,134.44

6.36. The client moved into permanent residential care in March 2005. From the beginning there were concerns about the client's capacity to manage her own financial affairs.

6.37. Attempts were made to move responsibility for the client's finances to the Client Affairs Team who would ensure that regular payments were made. However, such a transfer requires the approval of the General Practitioner or psychiatrist. As the client refused to see either it was not possible to involve the Client Affairs Team.


6.38. The major part of the debt relates to the period from1 April 2005 to 31 May 2006 which was not invoiced until 6 June 2006 by which time the client claimed to have spent the money and therefore could not pay the client contributions. Payments were then made regularly until February 2008, at which point they suddenly ceased. Further efforts to persuade the client to allow the Client Affairs Team to manage her finances were unsuccessful and the client's family also refused to get involved.

6.39. The client passed away on 4 August 2008 with no assets. The Panel agreed in October 2008 that the debt could not be pursued and recommended that it be written off.

Client 8 (deceased) - £14,688.48

6.40. The client was in permanent residential care from July 1998. At the beginning the client's relative acted as appointee for the receipt of benefits from the Department of Work and Pensions. However, payments were erratic and a debt built up over the years.

6.41. A standing order for an additional £50 per month was finally secured in September 2001 by which time the debt had reached some £2,800.

6.42. Finally, in November 2003 the Council's Client Affairs Team took over the running of the client's finances. This ensured that all ongoing payments were met.

6.43. In January 2005 the monthly standing order for £50 was stopped by the relative. Despite several reminders and a letter Legal Services on 4 October 2005 requesting full payment within 14 days to avoid legal action being initiated, no reply was received. The client died on 11 October 2005.

6.44. Further attempts to initiate legal proceedings had to be abandoned when it was discovered that the relative had moved house and did not leave a forwarding address. Searches initiated by Income failed to discover the whereabouts of the relative.

6.45. In October 2008 Legal Services advised that due to the lack of funds in the client's estate and in the absence of a liable third party it was not feasible to pursue the debt.

6.46. The Panel agreed that the debt could not be pursued and recommended that it be written off.


Client 9 (deceased) - £5,526.33

6.47. The client went into residential care in November 1999. At the beginning the client's parent was responsible for the financial affairs. However, no payments were made until September 2000 when the home took over appointeeship. From that date all current charges have been met.

6.48. Letters were sent to the parent requesting payment of the arrears. No response was received and no payments were made.


6.49. By 2003 it was believed that the parent had moved to Wales and is believed to have died soon after. The client only has sufficient funds to pay the ongoing charges with a small personal allowance and no other savings or income. In addition Legal Services confirmed that as the debt was over six years old it fell under the provisions of the Statute of Limitations Act which meant that it could not legally be pursued any further.

6.50. The Panel agreed that the debt be written off.


Client 10 (deceased) - £7,656.28

6.51. The client had been a resident in a nursing home since April 2000. Although the spouse had power of attorney it was the client's relative who dealt with the financial affairs.

6.52. In the beginning the charges, which were paid directly to the home, were kept up to date. In 2004, however, the home began to experience difficulty collecting the care fees, and responsibility for charging was moved to the Council from April that year.


6.53. In March 2004 the client's spouse went into residential care. In August 2004 the client's property was sold. As a result the client was now deemed to be self-funding and all contact with care management was ended. However, despite selling the house only partial payment against the debt was received in January 2005. Subsequent letters were sent to the relative including threats of legal action, which received no response or payment.


6.54. The case was referred for Legal Services in October 2007. It was at this stage that the relative revealed that the client had died in June 2006 and that the client's spouse had passed away in February 2007.

6.55. As the client's relative did not have any power of attorney there was no basis to instigate legal action. Legal Services recommended that a claim be made against the client's estate.

6.56. In November 2008 it was determined that there was no money in the estate. The Panel agreed that the debt could not be pursued and recommended that it be written off.


Client 11 - £7,229.20

6.57. The client entered a residential home in July 2008. The financial assessment resulted in the client being assessed as full cost due to the client's level of capital.

6.58. A thorough review of all Adult Services client contributions in January 2009 was conducted by the Devolved Finance Unit. This revealed that invoices had not been raised since the client went into residential care.

6.59. As the client has passed away in November 2008 it was agreed by the Departmental Management Team that the debt should not be pursued and that it be recommended to the Executive Member for write off.

6.60. It is worth noting that there has been a review of the processes and amendments have been made to ensure that in future all client income is identified and invoiced in a timely fashion.

7) Invoices Written Back

7.1. The following two invoices over £5,000 have been written back


Invoice 1 10,706.40

Invoice 2 8,134.28

Total 18,040.68

Invoice 1 - £10,706.40


7.2. From April 1998 to December 2000 invoices were raised to Surrey County Council (SCC) in respect of day care for client with a learning disability. The charge was based on the standard Hampshire County Council rate for clients from another local authority.


7.3. SCC disputed the rate. This led to many years of discussions. Ultimately it was agreed by the Assistant Director for Learning Disability that SCC would pay for part of the charge and credit notes were issued to SCC. In total this amounted to £10,706.40.

Invoice 2 - £8,134.28


7.4. In 2003 an invoice was raised to a residential home in respect of client contributions it was collecting.


7.5. The home disputed the invoice. It was agreed by the team manager in May 2003 that the invoice was raised in error. However, it has come to light that the write-back was not processed.

7.6. As the amount is over £5,000 the Executive Member is asked to note the write-back.

8) Future direction

8.1. It is believed that the recent economic downturn has had little impact on the incidence of debt write offs for 2008/09, as there is a considerable lag between debts arising and further collection action being judged uneconomic. However, this could be more of a factor in future years. This issue will be monitored through the Panel to see if it does result in a higher level of write offs. It this does become a factor and the level of debts written off does increase then the maximum write off limits could be reviewed for the revised budget report for 2010/11.

9) Recommendations

It is recommended that:

9.1. That eleven debts of over £5,000 with a total value of £102,775.35 be written off as irrecoverable.


9.2. That it is noted that two invoices of over £5,000 with a total value of £18,040.68 were written back.

CORPORATE OR LEGAL INFORMATION:

IMPACT ASSESSMENTS:

1. Equalities Impact Assessment:

a) Not applicable

2. Impact on Crime and Disorder:

a) Not applicable.

3. Climate Change:

a) How does what is being proposed impact on our carbon footprint / energy consumption?

· Not applicable

b) How does what is being proposed consider the need to adapt to climate change, and be resilient to its longer term impacts?

· Not applicable