The recovery of expenditure on accommodation and services under section 86 of the Social Work (Scotland) Act 1968: guidance

Part 1: determining ordinary residence

Introduction

1. It is important to understand the distinction between responsibility for providing^[3] care and responsibility for funding it.

2. Under the 1968 Act, Scottish local authorities have a duty to provide community care services^[4] to persons within their area who have been assessed as in need of such services. This duty applies equally, therefore, in respect of persons who are ordinarily resident within a local authority area and persons who are physically present in a local authority area when their need for community care services arises but who are ordinarily resident in a different local authority area.

3. Where a local authority provides care to someone in its area who is ordinarily resident elsewhere, section 86 of the 1968 Act enables certain expenditure incurred in doing so to be recoverable from the local authority in whose area the individual is ordinarily resident.

4. The question of where an individual is ordinarily resident is, therefore, key to the operation of section 86 of the 1968 Act. This guidance is intended to assist local authorities in determining where an individual is ordinarily resident.

5. The provision of services should never be delayed pending resolution of any dispute arising in connection with a person's ordinary residence. The local authority where the individual is present should, on a without prejudice basis, assume responsibility for assessing need and providing care whilst any dispute about payment is resolved.^[5]

Section 86 of the 1968 Act - periods to be disregarded when determining ordinary residence

6. Section 86 of the 1968 Act provides for recovery of expenditure incurred by a local authority in the provision of accommodation and/or services to an individual who is ordinarily resident in the area of another local authority. Section 86 also provides a framework for determining where an individual's ordinary residence is. For this purpose, time spent in certain types of accommodation and time spent in accommodation provided under certain legislation, is to be disregarded in determining an individual's ordinary residence.

7. Section 86(1) of the 1968 Act provides that any expenditure incurred by a local authority in respect of a person who is ordinarily resident elsewhere, can be recovered from the local authority of ordinary residence, in any of the following circumstances:

• In providing accommodation for such persons, under the 1968 Act or under section 25 of the Children (Scotland) Act 1995 or under or by virtue of the Children's Hearings (Scotland) Act 2011;
• In providing services or facilities for such persons, under Part II of the 1968 Act, or Part II of the 1995 Act (including, in the case of a child, any expenses incurred after he has ceased to be a child, and, in the event of another local authority taking over, under section 25(4) of the 1995 Act, the provision of accommodation for him, including also any travelling or other expenses incurred in connection with taking over);
• In making a direct payment for such persons, under the Social Care (Self-directed Support) (Scotland) Act 2013 for the purpose of arranging for the provision of support within the meaning of section 5 or 8 of that Act;
• For the conveyance of such persons;
• In administering a compulsory supervision order or interim compulsory supervision order in respect of such persons;
• In providing services for such persons under sections 25-27 of the Mental Health (Care and Treatment) (Scotland) Act 2003

8. In determining an individual's ordinary residence for the purpose of section 86(1), section 86(3) provides for time spent in certain types of accommodation or accommodation provided pursuant to various statutory duties to be disregarded in deciding whether or not a person's ordinary residence has changed from one local authority area to another. These "disregard provisions" are as follows:

• Any period during which the individual is provided with accommodation under the 1968 Act, or under sections 25 to 27 of the Mental Health (Care and Treatment) (Scotland) Act 2003;
• Any period during which the individual was a patient in a health service hospital^[6], or in a hospital managed by a National Health Service trust^[7];

9. Section 86(3) further provides that, in the case of a child whose ordinary residence requires to be determined, the following periods of time spent residing in a place are to be disregarded:

• As an inmate of a school or other institution;
• In accordance with the requirements of a compulsory supervision order or interim compulsory supervision order, supervision order, community payback order under section 227A of the Criminal Procedure (Scotland) Act 1995, youth rehabilitation order or probation order or the conditions of a recognizance;
• While boarded out under the 1968 Act or under the Children and Young Persons (Scotland) Act 1937 by a local authority or education authority;
• While placed with local authority foster parents under the Children Act 1989;
• While provided with accommodation under paragraph (a) of, or by virtue of paragraph (c) of, section 26(1) of the Children (Scotland) Act 1995.

10. Section 86(5) provides a further circumstance which is to be disregarded for the purpose of determining an individual's ordinary residence. Section 86(5) must be read alongside section 86(4).

11. Section 86(4) applies where a local authority ("the responsible authority") performs a function under the following legislation:

a) the 1968 Act;
b) Part II of the Children (Scotland) Act 1995;
c) section 25 to 27 of the Mental Health (Care and Treatment) (Scotland) Act 2003;
d) the Children's Hearings (Scotland) Act 2011

by making arrangements with a person ("the provider") in terms of which the provider undertakes to accommodate, or to secure accommodation for, another person.

12. Section 86(5)(a) provides that where section 86(4) applies, any expenditure incurred under the arrangements by a provider which is a local authority is recoverable from the responsible authority.

13. Section 86(5)(b) provides that any period during which the individual is accommodated under these arrangements is to be disregarded for the purpose of determining their ordinary residence for the purposes of section 86(1).

14. The Recovery of Expenditure for the Provision of Social Care Services (Scotland) Act 2010 ("2010 Regulations") were introduced under section 86(6). The 2010 Regulations provide, at regulation 3, that expenditure incurred by a local authority in providing services or facilities under arrangements made under: the 1968 Act; Part II of the Children (Scotland) Act 1995; or section 25 to 27 of the Mental Health (Care and Treatment) (Scotland) Act 2003 is recoverable from the authority who has arranged the placement.

15. Regulation 4 establishes that the time a person stays in accommodation with support under arrangements made by a local authority is to be disregarded for the purposes of establishing the individual's ordinary residence.

Meaning of 'ordinarily resident'

16. There is no statutory definition of the term 'ordinarily resident' in the 1968 Act, nor have the Scottish courts been asked, as at the date of this Circular taking effect, to interpret its meaning.

17. The courts in England have, however, sought to interpret the term 'ordinarily resident' for the purpose of attributing responsibility for payment of an individual's care costs to a particular local authority.

18. The starting point for determining a person's ordinary residence is with regard to the dictum of Lord Scarman in Shah v London Borough of Barnet [1983] 1 All E.R. 226:

'unless … it can be shown that the statutory framework or the legal context in which the words are used requires a different meaning I unhesitatingly subscribe to the view that "ordinarily resident" refers to a man's abode in a particular place or country which he has adopted voluntarily and for settled purposes as part of the regular order of his life for the time being, whether of short or long duration.'

19. This case assists local authorities to determine the ordinary residence of people who have capacity to make their own decisions about where they wish to live.

20. For people who lack capacity to make such decisions, an alternative approach^[8] is appropriate because a person's lack of mental capacity may mean that they are not able to voluntarily adopt a particular place for settled purposes.

People who lack capacity to decide where to live

21. In considering whether or not an individual has adopted their place of residence voluntarily, a local authority will need to consider the individual's capacity to choose where they live. Where a person lacks the mental capacity to make such decisions, it is not appropriate to speak of the individual having adopted a residence voluntarily, or there being a degree of settled purpose. In such cases, an individual's ordinary residence should be determined having regard to their specific circumstances, as outlined below.

(a) the decision to move from one local authority area to another was taken by the individual's proxy decision-maker^[9]

22. Where an individual has been assessed as lacking capacity, the Adults with Incapacity (Scotland) Act 2000 ("the 2000 Act")^[10], provides for the support and safeguarding of the individual by enabling others to make certain decisions in respect of their property, financial affairs and/or health and personal welfare on their behalf. In Scotland, such decisions can only be taken lawfully by persons with the legal authority to do so. Such legal authority is acquired by way of power of attorney or guardianship, or other form of intervention order, granted by the court.

23. The effect of a person having formally acquired proxy decision making status is that any decision made in that capacity is to be treated as if the individual who lacks capacity has made the decision themself.

24. Therefore, where a decision to move from one area to another has been taken on a person's behalf by their proxy, the requisite voluntary adoption of a place for a settled purpose, as outlined in Shah, can be derived from the proxy decision-maker.

25. Determining the ordinary residence of a person who lacks capacity by reference to decisions taken by a proxy decision maker excludes any need to determine the ordinary residence of an incapable adult by reference to the English case of Vale, which, in the majority of cases, will entail an assessment of where a person would have chosen to live if they had capacity to do so.^[11]

26. Where the proxy decision maker takes the decision to move the individual out of area and the proxy arranges the move without the local authority making arrangements, the individual's ordinary residence will change to the new area for the reasons outlined above. Where, however, the proxy takes the decision to move the individual and the local authority arranges the move, the individual's ordinary residence will not change as a result of that move, as illustrated in the following scenario.

Case Study 1

Mr Example 1 lives in area A. Mr Example 1 lacks capacity and his son is his guardian. Local authority A has assessed Mr Example 1 as needing residential care. Mr Example 1's guardian asks local authority A to arrange for Mr Example 1 to move into a care home in area B as this is near Mr Example 1's family.

Local authority A arranges for local authority B to provide a place in a care home for Mr Example 1 that meets his assessed needs and takes account of his guardian's choice as far as possible^[12]. The two councils enter into an arrangement as set out in Annex D which sets out the agreement on: financial assessments; reviews of care needs; and procedures for local authority A to re-imburse local authority B as appropriate.

Under section 86(5)(b) of the 1968 Act, any period during which Mr Example 1 is accommodated under these arrangements between the local authorities is disregarded for the purpose of determining his ordinary residence. As such, Mr Example 1's ordinary residence has not changed, he remains ordinarily resident in the area of local authority A.

Alternatively, local authority A may decide to contract directly with a care home provider in area B and to remain fully responsible for reviewing care needs etc.

Under section 86(3) of the 1968 Act, any period Mr Example 1 spends accommodated under this arrangement is disregarded for the purpose of determining his ordinary residence, as local authority A is providing his accommodation under the 1968 Act. Consequently, Mr Example 1's ordinary residence has not changed, he remains ordinarily resident in the area of local authority A.

(b) the decision to move the individual out of area was taken by someone without the legal authority to make such decisions

27. It follows that the physical move of a person from one local authority area to another does not change their ordinary residence unless the criteria for ordinary residence set out in Shah (that a person's residence in a place results from a voluntary decision for settled purposes) is satisfied either by the competent decision of the person or the competent decision of someone authorised to make that decision on their behalf. Consequently, residence in a local authority area, for however long, will not, in the absence of a capacitous decision by the person or a decision by someone with specific authority, transfer ordinary residence to the area of actual residence.

(c) Child to adult transition

28. In relation to young people leaving care, continuity of support is key to making a success of throughcare and aftercare services. Supporting Young People Leaving Care in Scotland Regulations and associated guidance^[13] make it clear that the responsible authority^[14] is the local authority that is looking after or last looked after the young person.

29. From April 2015, the Children and Young People (Scotland) Act ("the 2014 Act") extends eligibility for aftercare assistance up to the age of 25 years old. This is set out in Part 11 and associated guidance which will be available from April 2015. In addition, Corporate Parenting duties in the 2014 Act reinforce the responsibility of Local Authorities (as corporate parents listed in schedule 4) to collaborate with each other and other Corporate Parents in fulfilling their duties under the 2014 Act.

30. At the end of the transitional period^[15], the recovery of costs for accommodation and/ or services covered by section 86 of the 1968 Act, will fall to be determined following the principles and guidance set out in this circular.