Mr Angry,
It would have been more acceptable if the CH manager had been able to have a chat with you, either in person or over the phone, before writing to inform you that s/he had taken the unwelcome step of notifying the SS. CH manager’s out of order, IMHO. So my first question to the CH manager would be – by recording a conversation with a 'service user', do you mean my father?
Your father, who is a service user in their terminology, has been your father for far longer than he has been a service user (horrible way to describe a resident!). If the police are informed that you are recording a conversation with your own father, the CH manager and/or the SS head of service should explain in advance why they feel that is unacceptable.
As for recording of conversations generally: it is legal to record a conversation with anyone, as long as you have their permission to do so. It would not be acceptable or legal for you to record conversations with residents other than your father without their permission – and if there are any questions about the mental capacity of the residents, it would be inadvisable to do so.
It is legal to record a telephone conversation with anyone without asking their permission to do so, but only as long as it is not played to a 3rd party without the permission of the person you recorded.
If you can’t record a conversation with your own father without the SS and the police being involved, that is a sad reflection of our country and the way in which the human rights of everyone, young and old, are being eroded. But the powers that be will no doubt argue that your father does not have the mental capacity to consent. But, of course, if it is in his best interests, they would have to demonstrate otherwise.
The next step may be for the CH to inform the Adult protection unit that you are abusing your father – and then it really will become more than tiresome.
I would seek clarification in writing from the CH manager and from the SS person s/he has informed.
(Afterthought: many people post photographs of their relatives with severe dementia here on TP. Without permission of their relatives, in many instances. Would the police need to be informed by the Alzheimer's Society?)