Islington Council Must Restore Blind Man's Care Account

Islington Council closed an elderly blind man’s care account when his savings rose above £23,250, giving him and his attorney around ten days to find another way to pay his carers. The Local Government and Social Care Ombudsman has now found the council was at fault, and told it to put the arrangement back.

The council has agreed. It has until 25 September to restore the account and refund what the man has paid out since, and until 25 December to change the policy so nobody else in the borough is treated the same way.

The decision, reference 25 013 859, was issued on 25 June 2026 and published this month. The Ombudsman anonymises everyone it writes about. The man is called Mr Y; the relative who holds power of attorney over his finances and brought the complaint is Mr X.

What happened

Mr Y is elderly, has been registered blind since birth and has a diagnosis of dementia. The council had provided him with care for around 35 years. Since 2016 he had received a direct payment, which he used to employ his own personal assistants.

The money went through a managed account. The council worked out a personal budget, both sides paid their share into the account, and the council’s service handled the payroll, the tax and the insurance, and could help with recruiting staff.

In October 2024, Mr X told the council that Mr Y’s capital had risen above the £23,250 upper capital threshold. The Department for Work and Pensions took several months to recalculate his pension credit. By May 2025 the council had completed a fresh financial assessment and concluded Mr Y was no longer entitled to help with his care costs.

It then said it would close the managed account. Mr X says they had about ten days to make other arrangements.

They managed it. With help from the council’s own direct payment team, Mr X set up an account with a payroll company the council itself uses. Mr Y kept the same personal assistants, including one who has supported him for many years. But he now pays a monthly fee to the payroll company and an annual insurance charge, and those costs are more than the personal budget the council had calculated.

What the Ombudsman found

The investigator’s central point is that eligibility for care and how that care is paid for are two different questions, and the council ran them together.

Under the Care Act 2014, when someone’s capital rises above the upper threshold the council cannot commission residential care for them, but it keeps the power to arrange any other care. It can then charge the person the full cost. The statutory guidance explicitly contemplates a council maintaining a direct payment in those circumstances as a “paper based exercise”.

The Ombudsman found:

• the council was not obliged to close Mr Y’s managed account when his capital rose
• it should not have taken any step to close it without first asking whether it still had a duty to meet his eligible needs, and there is no record it asked
• there is no barrier to running a managed account for someone above the threshold, with that person paying the full amount in
• the council never considered letting Mr Y keep the account, and in doing so “fettered its discretion”, which was a fault

The investigator also set out what a council ought to weigh in a case like this: how long the capital is likely to stay above the limit, and how vulnerable the person is. There is a specific warning in the decision that if a council steps away from care planning altogether, “it may lose all contact with someone whose needs may increase over time”.

Mr X had raised exactly that. He told the Ombudsman that with the council no longer monitoring Mr Y’s needs, his relative was heavily reliant on him and on one personal assistant.

What the council said

Islington replied to Mr X’s first complaint in June 2025, saying it “could have handled better” the financial assessment and should have discussed with them whether Mr Y needed the council to arrange his care. In its final reply in September 2025 it repeated that, apologised “for any distress or confusion caused” and offered a symbolic payment of £250, which was accepted.

That reply also said the adult care service would write again with a decision on how it applied its discretion in cases like this. Mr X told the Ombudsman in April 2026 that no such letter arrived.

The Ombudsman treated the £250 as a proportionate remedy for the short notice and the poor communication, but not for the underlying decision, which had never been revisited.

In agreeing to the recommendations, the council maintained that it has no “legal duty” to offer a managed account service alongside a direct payment. It accepted that it has a discretion, and that it would not fetter it in future. The Ombudsman recorded that position and said it was not its role to give definitive advice on the extent of the council’s duties.

What the council has to do

Within three months of the decision, so by 25 September 2026, the council agreed to:

• apologise to Mr X and Mr Y, accepting the findings
• restore Mr Y’s direct payment managed account as it was before June 2025, treating him as a full cost payer for as long as his capital stays above the threshold
• work out what he has paid under the self-funding arrangement, compare it with what the managed account would have cost, and pay him the difference if he is out of pocket

Within six months, by 25 December 2026, and as part of a wider review of its direct payment policy already under way, it agreed to:

• set up an arrangement letting anyone with a managed account keep it on a full cost basis if their capital goes above the threshold
• write guidance on this for staff who carry out financial assessments and run managed accounts, and for the public

The council has to send the Ombudsman evidence that it has done all of it.

What it means for you

The £23,250 line does not end the council’s involvement. If you or a relative has savings that cross the upper capital threshold, the council can stop contributing to the cost of care. That is a separate question from whether it still has a duty to meet the needs, and from how the care is arranged. If a council tells you the account has to close, this decision is the thing to point at.

Ask for the reasoning in writing. The fault here was not a wrong answer so much as a question never asked. A council has to consider the individual circumstances rather than apply a blanket rule.

Complain to the council first. The Ombudsman will normally only look at a complaint once the council has been through its own process. If you are unhappy after that, you can complain to the Ombudsman free of charge.

Islington is reviewing the policy now. The written guidance for staff and the public is due by the end of December. Anyone in the borough using a managed account is affected by what it says.

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Sources

• Local Government and Social Care Ombudsman decision 25 013 859, London Borough of Islington, decided 25 June 2026, for every fact, date, figure and quotation in this article.
• Care Act 2014 sections 9, 10, 14 and 17, cited in the decision as the legal framework for assessment and charging.
• Care and Support Statutory Guidance, Department of Health and Social Care, for the upper capital threshold and the “paper based exercise” wording quoted in the decision.
• How to complain to the Ombudsman.