The cost of care: the position following the Tower Hamlets decision

Jacqui Thomas looks at the caselaw and policy around financing placements of children with family members.

In this era of disappearing budgets and pressure to cut costs, an increasing number of cases are arising concerned with the tension between the increasing pressure on local authority resources, set against the needs of families who are themselves suffering from benefit cuts.

Accordingly, questions will arise around the legal requirement to finance placements with family members, both at a child in need or child protection stage, and once proceedings are ongoing.

Families finding themselves at the sharp end of welfare cuts are more likely to look for advice as to the financial implications of stepping forward to help another family member in need of accommodation to prevent care proceedings. This article aims to examine the caselaw in this area, and recent developments in policy considerations.

Pre-proceedings 

It is often the case that as a result of concerns around the care of the parents, other family members will come forward, with or without social work encouragement, to care for a child. It could be argued that this is their social and familial responsibility, but how does that weigh against the local authority statutory duty to provide accommodation under the Children Act s.22, s.20, s.23 and s.17(6)?

The question of when a potentially private family arrangement becomes accommodation provided by a local authority was considered by Black J in SA v KCC [2010] EWHC 848 (Admin). The local authority sought to argue that the care provided by the maternal grandmother, which had not been under any order or s.20 arrangement amounted to private fostering, and therefore the local authority was not required to provide funding beyond s.17 monies. 

The Court considered the interplay between the various provisions that imposed a duty on the local authority to provide accommodation. S.20(1)(c) provides that the local authority has a mandatory duty to provide accommodation to a child where the person who has been caring for the child is prevented, whether temporarily or permanently, from providing him with suitable accommodation or care. S.23 imposes various duties where a local authority is looking after a child. The court was reminded of the proposition that the label used to define the local authority actions cannot change the legal consequences, ie, calling something s.17 does not remove obligations of support if in fact the situation should have been governed by s.20, R (on the application of M) v London Borough of Hammersmith and Fulham [2008] UKHL 13.

In the case of London Borough of Southwark v D [2007] EWCA Civ 182, the approach of the Court was approved as considering whether factually the arrangement was truly a private one or if the local authority was in fact providing accommodation. The Court held that where a local authority takes a major role in making arrangements for a child to be fostered, it is likely to be concluded that it is exercising its role and responsibilities under the Act. If the local authority is simply facilitating a private arrangement, it must make it clear to the parties that the family members must look to the parents for financial support, or must provide it themselves.

Guidance can be drawn from the Southwark case as follows. It was made clear that where a local authority presents a plan to a family that if certain members cannot care for a child then the direct alternative is foster care, then those family members who go onto provide care are entitled to an allowance. However, where the authority brokers an agreement between family members and is simply assisting an arrangement that would have been reached in any event, and importantly where the authority make it plain to the family that they will not be entitled to financial support and should look to each other, then it may be possible to argue that the placement does not give rise to local authority funding.

What of the argument that the fact that a relative has stepped in to assist, has headed off any statutory duty that may have arisen? The Court considered that point in the Hammersmith and Fulham case and held that the decision in Southwark applied equally to relatives as it did to non-relatives. What was of the essence is the difference between an arrangement that the local authority is responsible for as against a truly private arrangement. In the Hammersmith case the social worker had made it clear to the grandmother that if she could not care for the child the alternative was foster care. The arrangement had arisen at the social workers' request, and not as a result of any direct discussions between the family. The nature of the arrangement had been left uncertain and the grandmother was not in the position of being able to give informed consent to a s.17 arrangement.

Therefore, any authority should make it clear in their family arrangements policy how support will be funded, and if that support will be limited to s.17 monies, that any further financial support would have to be resolved by the family. However, authorities should beware of labelling a situation as s.17, when in fact the provisions of s.20 are called for, as the label will not absolve them of their responsibilities. If the family arrangement is a direct alternative to care proceedings, then the family member is entitled to be treated as a carer for a looked after child and paid accordingly.

What level of allowance?

In pre-proceedings situations, there is no residence order in effect, and it is likely that the local authority would be expected to pay the fostering allowance, subject to any justifiable adjustments. The rationale is that where an authority is able to avoid using the valuable resource of foster carers by placing with family, then those family members should be recompensed in the same way as a foster carer would be funded. The caselaw provides no basis for the payment of the lower rate of residence order allowance at that stage of proceedings.

Once the application for a care order is issued, and the child is placed with family members approved under the Care Planning Regulations 2010, then in the past many local authorities have drawn a distinction between foster carers who are related to the child and those who are not. This is due to the fact that for unrelated foster carers, it is perceived that a level of remuneration is necessary, and to reflect their qualifications and experience.

However, in the recent decision of X, R (on the application of) v London Borough of Tower Hamlets [2013] EWHC 480 (Admin) such a distinction was held to be unlawful. In that case, an aunt had been providing care for three children under interim care orders. The local authority policy provided her with a lower level of allowance than if she had been unrelated. The Court considered the DfE guidance, "Family and Friends Care: Statutory Guidance for Local Authorities 2011" and the National Minimum Standards for Fostering Services. The standards expressly state that the criteria for payments apply equally to all foster carers, related or not.

Tower Hamlets’ policy had sought to justify the lower level of allowances payable to family members by reference to the lower standards of training expected, less broad set of caring skills, and no expectation of availability to take placements when vacant, or at short notice. In addition to the lower level of allowance, festive/birthday and holiday payments were also not payable, although enhancements would be considered in exceptional circumstances.

The court found that the policy was contrary to the guidance as a whole, which provided for the principle of equal treatment, to fees as well as allowances. However, the Court acknowledged that the roles of family foster carers and unrelated foster carers were different. It also permitted the distinction in the policy in relation to festive/birthday payments, as although they were not routinely made to family carers, they were dealt with on a case by case basis, and were therefore within the reasonable discretion of the local authority.

The issue that the Court took with the policy, was that the criteria for the differing levels rested solely on the question of whether or not the carers were related to the child. It was said that there is no reason why a local authority should not design a fee structure based on qualifications, or by rewarding attendance at suitable training events, (para 92). A family carer who met that criteria would then be entitled to receive the same fees as any other foster carer. So long as the criteria were genuine and reasonably related to the task of fostering children, and so long as family foster carers were not excluded from seeking to meet the criteria, that could be appropriate.

These comments of the Court may provide useful to local authority policy makers in the future.

S. 20 and s.38(6) Interim Care orders

Clearly, once s.20 voluntary accommodation is agreed to by the parents, then the authority is in the situation of taking the lead and assuming responsibility for the placement. Accordingly fostering allowances will become payable to those family members. Likewise, some authorities may seek to argue that an ICO for the purposes of a s.38(6) assessment is not a foster placement in the usual sense, the family are not the subject of a connected persons assessment, and therefore s.17 support can be given instead of the fostering allowance. It is the author’s view that it is highly unlikely that those arguments would be successful. 

Generally, the label attached to the placement will not change the factual basis of the placement. If it is a social work led placement, and is a direct alternative to foster care, then in accordance with the caselaw discussed above payments will be expected.

What then, of a family that has been receiving s.17 support in the months preceding the issue of proceedings, but on the issue of proceedings the placement is formalised by the use of s.20, and they begin to receive fostering allowance? There is no change in the needs of the family or the care that they are giving to the children. The move to the family placement was a step taken by the local authority as part of protective measures for the purposes of safeguarding the children. The only change is the legal label of the placement, and in accordance with the authorities, the fostering allowance should have been paid for the s.17 period.

Residence order allowances

Pursuant to CA 1989 Sch 1 para. 15, there is a discretion for payments to be made by local authorities to family members caring for a child under a residence order. These payments are discretionary, and it is lawful for a policy to set out criteria under which any application for funding will be considered. It is also means tested, subject to the DfE model, which can be found here.

Special Guardianship Order allowances - is there a private / public law distinction?

Special Guardianship assessments are required to include a financial assessment, by virtue of the SG regulations 2005. The financial assessment is means tested, usually by reference to the same model as that given by the DfE above. It may be subject to annual review pursuant to the Regulations, and the carers are required to submit annual financial information.

However, there is clear authority in relation to the appropriate level of SGO allowances. In the recent case of TT, R (on the application of) v London Borough of Merton [2012] EWHC 2055 (Admin), the Court examined again the appropriate rate of payment. By paragraph 65 of the Special Guardianship Guidance, regard should be had to the national level of fostering allowance. The core allowance, plus any additional enhancement needed to meet the child's needs should be calculated and used as the maximum allowance. From that maximum allowance, a means test should be carried out, in order to reach the appropriate allowance. Merton had considered the DfE model and declined to use it, on the basis that it did not reflect the circumstances of the family. The Court acknowledged that the means test does not have the same force as statutory guidance.

The Court held that an authority is required to have regard to the minimum level of allowance, and make adjustments according to the particular case. It was not open to the authority to ignore the guidance or the fostering network allowances, nor was it correct to apply a blanket policy of a deduction of a third. In order to be lawful and rationale, an authority needed a clear policy involving taking the minimum allowance and then adjusting. Whilst the DfE model was considered to be appropriate, it was not unreasonable to depart from it where such departure could be justified, and an alternative means test used.

The requirement for a financial assessment arises following any application for a SGO, whether it flows from a social work recommendation in the course of proceedings, or from a request in private law proceedings that the authority has had no prior involvement in. An authority should also take care when recommending an alternative order for a family placement, as the Court's are alive to budgetary constraints and will take a dim view of an attempt to opt for an order simply on the basis of funding.

Conclusion

Local authorities are likely to become increasingly creative in order to meet their internal budgetary problems. One example of this is the recent reporting of Worcestershire County Council’s plans to introduce a payment schemes for parents who opt to place their children in care, where no crisis exists.

Whether that proposal will become policy remains to be seen given the level of opposition to it. However, where there is a clear and cogent policy, setting out in straightforward language when an allowance will be paid and on what basis it will be assessed, and when the support will be limited to s.17 monies, an authority may be less likely to find itself open to challenge.

Families have to be able to make an informed choice about the support they offer one another, and not commit to an child, only to find it unrealistic on the basis of finances. Moreover, social workers need to be clear and understand what it is they are asking a family to do, and whether they will be given the financial support to do it, before that family member takes on the challenge.

Jacqui Thomas is a barrister at 37 Park Square. She can be contacted by This email address is being protected from spambots. You need JavaScript enabled to view it.