Direct Payment compared to Individual (Personal) Budgets

Direct Payments statutory framework

1.  The first direct payment scheme was under the Independent Living Fund set up in 1988 to assist 300 severely disabled people to remain living independently in the community, paid via the Department of Social Security not social services departments. The concept of direct payments was extended under the provisions of the Community Care (Direct Payments) Act 1996, allowing for the payment of case in lieu of services to most disabled people. This was extended to include certain carers and parents of disabled children under the Carers and Disabled Children Act 2000. The current statutory provisions are under the Health and Social Care Act (HSCA) 2001 sections 57 and 58.

2.  The provisions of The Community Care, Services for Carers and Children’s Services (Direct Payments) (Regulations) 2003 (the Regulations), restrict who can receive a direct payment and govern how the money can be spent.

3.  The Audit Commission in 2006 stated that the costs of providing support to service users in receipt of a direct payment and training staff could outweigh the potential savings in transferring the administration of the provision of care to the recipients. In the Commission for Social Care Inspection (CSCI) in its report in July 2007 found that there are 54,000 recipient’s of direct payments out of a potential of a million service users.

4.  Within the direct payments framework there is a duty, under regulation 4 of the Regulations to offer a direct payment once a person as been assessed as being eligible for a service from the local authority. Subject to the service user not falling within the provisions of regulation 2, which lists those service users to whom a direct payment cannot be made.

5.  Regulation 6 further places conditions on the payment of a direct payment including restricting the securing of services by the recipient of the direct payment of services from their close family, except in exceptional circumstances. Limiting people’s choice of who should care for them, most research has shown most service users would prefer to employ a family member. Note should be taken of a recent decision by the Court of Appeal that when a direct payment is paid to a family member it will be treated as earnings for the purpose of benefits legislation. Only when the direct payment is made to the disabled person is it disregarded as income, when payment is made for services it is then treated as part of the recipient’s income for tax and benefit purposes. This Judgment places family carers receiving payment under the direct payment scheme in the same position as any other person employed to deliver services.

6.  Direct payments cannot under Regulation 7 be used to purchase residential care. Regulation 7 caps the amount of residential respite care that can be purchased by direct payments to 4 weeks in any twelve month period. The relevant part of the Guidance[1] states:

  1. 74. Direct payments may not pay for adults to live for the long-term in a care home. They may be made to enable people to purchase for themselves short stays in a care home, but this cannot be for more than four weeks in any twelve months. Where two successive periods of such care are less than four weeks apart, they may be added together to make a cumulative total which may not exceed four weeks. If the two periods are more than four weeks apart they are not added together. It is unlikely that direct payments will be appropriate for emergency (unplanned) residential care.
  1. 75. People can receive additional weeks in a care home once they have reached the four week maximum. They cannot purchase the stay using their direct payments, but if the council considers that a longer stay is needed, it can still be arrange and fund stays for the person itself in the normal way. There is no restriction on the length of time which the council may arrange such accommodation for someone.
  1. 76 A direct payment also cannot be made in relation to the provision of residential accommodation for a disabled child or young person for any single period in excess of four weeks, and if for more than 120 days any period of twelve months. The time limit is to avoid inappropriate use of residential accommodation.

7.  The Welsh Guidance[2] gives an example:

·  Ms J spends three weeks in a care home in January 2005 funded through direct payments. In March 2005 she wants to spend another three weeks in a care home. She is entitled to direct payments to fund this second spell because it begins more than four weeks after the first. For the rest of the year she can only insist on direct payments to fund one more week in a care home.

8.  A person living full time in a residential home may receive a direct payment to fund non-residential care services i.e. to access day care or to try out independent living prior to moving out of a care home permanently English Guidance at 7.

9.  The Regulations provides the framework under which money may be recovered from a recipient where the local authority is satisfied the money is not being used to secure the provision of service to which it relates (regulation 9). Regulation 10 allows for the termination of the direct payments agreements.

10. The National Health Service via policy issued by the Department of Health has made it clear that the NHS cannot make direct payments under the provision of the HSCA 2001, or under partnership agreements under section 75 National Health Service Act 2006[3]. The Department of Health has reinforced its policy stance in 2007[4] that NHS services cannot be provided as part of an Individual Budget or direct payment.

11. The above stance is correct in that the NHS cannot provide a direct payment under the HSCA 2001 but is incorrect in that it cannot provide cash payments to those who need NHS services. The money can be provided under NHSA 2006 section 12 that empowers the NHS to “contract with any body or person to provide health services”. This is expanded in schedule 3 paragraph 15 to permit “anything which appears to be necessary or expedient for the purposes of or in connection with its functions”. Further Cambridgeshire Health Authority and PCT corrected the maladministration found against its decision in the Pointin case by paying Mrs Pointin a direct payment.

12. Direct payments have a legislative framework that is further expanded by the use of the Regulations and Guidance that clearly state what the cash payment may be used for. Further to whom a payment can be made and it what circumstances a payment cannot be made or in the local authorities discretion should not be made. The framework details the use of brokers, Independent Living Trusts, and the auditing framework to be in place to regulate the use of the direct payments.

Personlisation of social care

13. By contrast with Direct Payments the Government has rather than introduce legislation to govern the use of Individual/Personal Budgets bought in the concept for changes to the delivery of adult social care via policy documents.

14. The Government’s vision is to ensure that people with disabilities are citizens with powerful rights to non-discrimination and equality. The vision is for a society where everyone is respected and included as equal members of society. “Every locality should seek to have a single community based support system focused on the health and wellbeing of citizens. Binding together local government, primary care, commonly based health provision, public health, social care and the wider issues of housing, employment benefits advice, education and training” (Putting People First)[5].

15. In order to achieve this vision the Government propose the use of Individual/Personal Budgets, being a notional cash pot established for someone with care and support needs. The person controls how the money is to be spent on services. Putting People First has made a commitment to use this model for all adults eligible for social care.

16. ‘Our Health Our Care Our Say’[6] Government White Paper and budget statements of 2007, supported by the Comprehensive Spending Review – ‘Transforming Adult Social Care’ envisages a system-wide transformation of the provision of adult social care services based on a common assessment process of individual social care needs with greater emphasis on self assessment. Further, social workers will spend less time on assessment and more on support, brokerage and advocacy. The strategic movement is for Person Centred Planning and Self Directed Support (SDS).

17. In order to deliver this vision it has been necessary to determine the legal basis that enables cash payments to be made in lieu of services and if the current restrictions on Direct Payments would apply to a more flexible budget. In 2006 the Government announced thirteen authorities were to pilot Individual Budgets, Essex was one of the pilot schemes. Under the 2006 White Paper the Government stated:

·  Individuals who are eligible for these funds will then have a single transparent sum allocated to them in their name and held on their behalf, rather like a bank account. They can choose to take this money out either in the form of a direct payment in cash, a provision of services, or as a mixture of both cash and services, up to the value of their total budget. This will offer the individual much more flexibility to choose services which are more tailored to their specific needs”.

18. Local Authority Circular (2008) 1 Transforming Adult Social Care issued on the 17 January 2008 informs local authorities what is expected of them. The LAC supports Independence, Wellbeing and Choice and reinforces Our Health, our care, our say and Putting People First. What is does not do is change the social care legislation to give a statutory basis for the provision of individual/personal budgets. What it does do is inform how these polices should be delivered operationally and strategically and should be followed as guidance.

19. LAC (2008) 1 sets out that there should be accessibility of services to both those entitled to public funding and those that self fund. It further sets out the following departmental strategic objectives

:

·  To promote better health and well being

·  To provide better care

·  To provide better value for all

·  To achieve Putting People First a shared vision and commitment to the transformation of adult social care.

20. Further guidance under LAC (2008) 1:

·  to enable people to live independently

·  to stay healthy and recover from illness

·  to exercise maximum control over their own life and where appropriate lives of family members

·  to sustain a family unit to avoid children taking on an inappropriate caring role

·  to participate as active and equal citizens both economically and socially

·  to have the best quality of life irrespective of illness or disability

·  to retain maximum dignity and respect.

21. The Department of Health guidance is therefore driving forward the policy of Central. Government without a statutory basis.

22. Therefore in order to be able to provide cash payment outside the direct payments legislation it is necessary to determine can a local authority provide cash payments under any other legislation. The Local Government Act 2000 s2 (LGA) enables a local authority to do anything they consider likely to promote the wellbeing for social, economic or environmental reasons, subject to s3 which prohibits the use of s2 to raise money. In 2001 the Government issued Guidance (under s3(5)) that stresses at paragraph 6 “the purpose in introducing the well-being power is to reverse that traditional cautious approach, and to encourage innovation and closer joint working between local authorities and their partners to improve communities”. LGA s3 prevents a local authority from using its powers under s2 LGA to anything specifically prohibited, or limited by other statutory provisions, nor to raise money. These prohibitions do not extend to local authorities being prevented from charging for services provided under s2 LGA, nor does it prevent companies set up under the provisions of s2 LGA from raising money, any initial surplus being reinvested into the company.

23. LGA s2 has been used to charge for topping up packages of day care where clients would like assistance beyond which they have been assessed but are willing to pay for. It has been used to support elderly residents leaving hospital; to provide support services for young vulnerable people and families in their homes; to bridge the perceived gap in legislation for housing with care schemes; to place a charge on a property and pay contributions to the cost of housing to enable families to remain in their own homes; provide grants; and to provide for community alarm systems.

24. It is submitted that it is under the above provisions that payments may be made to service users to enable them to access services that do not conform to the traditional model for the provision of social care services..

25.  The LGA 2000 provides a local authority with flexibility in that it empowers them to do anything likely to promote or improve the economic, social or environmental well being of their area, for the benefit of all or part of it or for the benefit of all or any persons resident in it. Guidance on these provisions in the Power to Promote or improve economic, social or environmental wellbeing 2001 (www.communites.gov.uk), were issued by the Secretary of State. The power under s2 LGA has been widened under s93 LGA 2003 which enables local authorities to charge for discretionary services (but not services the LA is required to provide).