Direct Payments for Children and Young People with Special Educational Needs (SEN) Or Learning

Direct payments for children and young people with special educational needs (SEN) or learning difficulties or disabilities (LDD)

Medway Pathfinder Pilot scheme

Introduction

Background

The Green Paper on SEN and disability, Support and aspiration, sets out the Government’s commitment to giving families of children with the proposed Education, Health and Care Plan the option of taking up a personal budget by 2014.
Evidence from individual budget (IB) pilots for children – and the personal health budget pilots – suggests that a personal budget can give families more flexibility and empower them to make decisions about the support services they use. Families who took part in the individual budget pilots report that they feel they have more choice and control over their support services, better access to and greater satisfaction with services.
One element of a personal budget can be a direct cash payment made to a family or carer to buy a service or a piece of equipment for their child and, in the individual budgets pilot nearly two thirds of families opted to have a direct payment as part of their personal budget. The Green Paper proposes that we build on the experience of the IB pilots and explore how to increase the scope of direct payments to include funding streams from education.
To allow the testing to take place the Government has created a new power, inserted into the Education Act 1996 by the Education Act 2011, which gives the Secretary of State the power to establish, by order, a pilot scheme enabling the making of direct payments for special educational provision[1].
The Special Educational Needs (Direct Payments) (Pilot Scheme) Order 2012 (“the Order”) came into force on 30 January 2012. It creates a pilot scheme (“the Pilot Scheme”) to enable the testing of direct payments by the authorities listed in Schedule 2 to the Order. Although the Order establishes a separate pilot scheme to enable the testing of direct payments, Pathfinder authorities will need to undertake this activity as a coherent part of their work to test the delivery of an entitlement to a personal budget for all families, with an Education, Health and Social Care Plan, by 2014. As part of this package of activity pathfinders are able, by application, to join the Department of Health’s Personal Budget pilot to enable the testing of direct payments for health services.

Aims of this document

This document should be read in conjunction with the Order. It provides advice to the local authorities participating in the Pilot Scheme set out in Schedule 1 of the Order. It is intended to provide information with regard to the roles and responsibilities of local authorities, their partners, providers and recipients of direct payments as set out in the Pilot Scheme, so as to ensure that direct payments can be used safely and effectively.
However, it should not be seen as formal or statutory guidance regarding the legal interpretation of the Order,nor should it be seen as providing absolute answers to the issues that the pilot authorities will need to consider. The aim of the Pilot Scheme is to explore such issues, it is not intended to provide restrictive guidance that could limit the local authorities’ ability to implement the pilot scheme in innovative ways.

The Pilot Scheme

Scope of the Pilot Scheme

The Pilot Scheme only applies to the local authorities listed in schedule 2 of the Order. These are the authorities that are already taking part in either the Green Paper pathfinders or the IB Pilot.
As part of the pilot, local authorities will be able to test the services and funding streams that could be included within the scope of a direct payment, as well as within the scope of a personal budget more generally. However, local authorities may only make direct payments in respect of qualifying goods and services, which are defined in paragraph 1 of the Pilot Scheme[2].
Direct payments cannot be made to enable the parent to pay the fees of a school named in part 4 of the statement, or to fund programme costs at a college or other education/training institution.
In keeping with the wider activities of the SEN Green Paper pathfinder programme, this activity must take place within the existing statutory framework for SEN and disability. Children, young people and parents must retain the same rights and protections with regard to admissions to schools, colleges or other providers as they do under the current statutory framework through a statement of SEN or a LDA.
However, the scheme makes it clear that goods and services purchased by direct payments made in accordance with the pilot scheme, are to be treated as provided or arranged by a local authority in pursuance with the relevant statutory duties. These statutory duties are listed in paragraph 2 of the Pilot Scheme. This means that, providing local authorities comply with the provisions of the Pilot Scheme, and the goods and services are purchased with the direct payment, the authorities cannot be said to be in breach of those statutory duties.

The request/offer of a direct payment

Under paragraph 3 of the Pilot Scheme, local authorities are required to provide potential recipients with information and advice about direct payments when they issue a new or amended statement or learning difficulties assessment (LDA). The Order does not prescribe what needs to be provided and, in practice, the level of information and advice will need to reflect the authorities plans to make direct payments under the scheme to avoid any unnecessary raising of expectations amongst parents and families.
The scheme also allows potential recipients to request a direct payment when they receive the statement. The authority is required to consider any such request but is not under any obligation to agree it where there are good reasons for them not to do so. Paragraph 11d of the order will be of particular relevance to local authorities when considering any such requests.

Recipients of a direct payment

Direct payments can only be made in respect of children and young people with a statement of SEN or a learning difficulties assessment. To ensure that direct payments are accessible to a wide range of families, the Pilot Scheme sets out the circumstances where the authority can make payments to other people to manage the direct payment on the parent or young person’s behalf (paragraphs 6 and 7 of the Pilot Scheme).
The scheme also requires (paragraph 8 of the Pilot Scheme) that when a child, who is subject to a direct payment, reaches age 16 local authorities are required to establish whether: they want to take receipt of the direct payment themselves; want their parents (or another nominee/representative) to receive the payment; or whether they no longer wish to receive a direct payment.

Consent and agreement to the making of direct payments

The Government is clear that the take-up of direct payments (and of a wider personal budget) is optional. With the increased control and independence that can result from receiving direct payments comes additional responsibilities such as accountability for how money is spent or, potentially, becoming an employer or entering into contracts with people to provide certain services.
When offering a direct payment, local authorities should make it clear that receiving a direct payment is voluntary. No person should be put under pressure to receive direct payments if they do not want to. People who do not wish to receive direct payments should be given the option of receiving a different form of personal budget, such as a notional budget, or to continue to access services through existing routes.
Under the pilot scheme, direct payments can only be made where written consent has been obtained from the person to whom the direct payments are to be made and, where direct payments are to be made to a nominee, the parent or beneficiary as appropriate. The written consent must set out the agreed provision that the direct payment will purchase, the amount of the payment and how it will be paid. (Paragraph 10 of the Pilot Scheme).
In some cases the authority will need to make a judgement as to whether an individual has capacity to consent. When considering whether someone is capable of giving consent and managing a direct payment, the local authority should take into account the support available to that person, and should consider whether providing additional support would enable them to give consent and enable them to manage a direct payment. Each judgement should be made on an individual basis, and there should not be blanket assumptions about particular groups of people and their capacity to manage a direct payment. Where a parent of beneficiary lacks capacity to consent, direct payments can be made to a representative instead, providing the prescribed conditions are met (Paragraph 8 of the Pilot Scheme).
In practice, that consent and the agreement about the goods and services that will be purchased with the direct payments will need to be closely linked to discussions about the child’s or young person’s needs and the outcomes to be achieved. The Local Authority plays an important role in ensuring that those receiving direct payments are able to make informed choices about using direct payments, and that the goods and/or services they might purchase will meet the assessed needs of the child or young person in question.
However, the local authority should be careful not to arbitrarily refuse requests to purchase novel or innovative goods or services and should examine any such requests on a case-by-case basis.

Information, advice and support

The process of securing consent for a direct payment highlights the fundamental importance of providing information, advice and support for families. Evidence from the IB pilots has shown that, with this support, personal budgets, including direct payments, can be accessible to families from all socio economic backgrounds.
Paragraph 19 of the Pilot Scheme sets out a minimum requirement for authorities to make arrangements for recipients of direct payments to receive information, advice and support in connection with direct payments.
The requirements in paragraph 19 of the Pilot Scheme should be viewed as minimum requirements. Recipients of direct payments are likely to need advice on a wide range of issues including:

support and advice about taking up and managing direct payments, including financial information;
budget management training and assertiveness coaching;
support to draft advertisements, job descriptions and contracts, and support in recruiting individuals;
advice on safeguards needed in the employment of people to work with children and vulnerable adults;
other advice on being an employer – legal, national insurance and tax, payroll, health and safety;
advice about models of managing direct payments and employing staff, including trusts; and
the option of having a key-worker during the process of considering whether to receive a direct payment.

Setting the amount of the direct payment

Local authorities need to calculate the amount of money to be made available through a direct payment to provide the agreed provision and are required to set the direct payment at a level sufficient to cover the full cost of the agreed provision (paragraph 14(1) of the Pilot Scheme).
In FE, the costs of supporting a direct payment (e.g. advice, employment costs etc) must be met by the local authority pathfinder.
In no circumstances should the amount of the direct payment be set at a level that would require someone to pay from their own resources in order to secure part or all of the provision set out in Part III of the child’s statement of SEN or the young person’s LDA.
When making their calculation the Local Authority will need to ensure that the gross budget they calculate recognises all and any “hidden costs” – for example, the cost of national insurance contributions and emergency cover should a recipient of a direct payment wish to use it to employ someone to support the child or young person.
The local authority may increase or decrease the size of the direct payments at any time, if they are satisfied that the new amount is sufficient to cover the full cost of the provision to which the direct payment relates. If reducing the size of the direct payments, for example, where funds have accumulated, the local authority must notify the recipient in writing following the process for reducing a direct payment set out at paragraph 14 of the Pilot Scheme.

The decision to make a direct payment

Local authorities taking part in this pilot scheme have a power to make direct payments but are not under a duty to do so. In particular, local authorities must be satisfied that the conditions in paragraph 11 of the Pilot Scheme are met. Thus local authorities retain a level of discretion over whether or not to make direct payments, and in certain circumstances may decide not to make a direct payment in respect of certain goods and services where the cost would be disproportionate to the potential benefit to the child or young person or if it could have an adverse impact on services to other children and young people with a statement of SEN.
In such instances, the local authority should inform the prospective recipient of the direct payments and should discuss whether there might be other goods and/or services that would meet the assessed needs of the child or young person that might be purchased using direct payments.
Local authorities must set out any decision not to make a direct payment in writing giving reasons for its decision and inform the person who wanted to receive direct payments (“P”) of their right to request a review of the decision. The local authority must, where requested, undertake a review and consider any representations made by P (paragraph 13 of the Pilot Scheme refers).
Where a local authority cannot offer direct payments they could consider other means of personalising the support of the child or young person, including through a notional budget. Above all, no one should not be put at a disadvantage in terms of accessing services if they are not able to manage direct payments.

Monitoring and Review

Local authorities will need to put in place forms of monitoring arrangements that they consider appropriate to the recipients. As a minimum, paragraph 15 of the Pilot Scheme requires a review of the direct payment whenever changes are made to the qualifying goods and services and at least once within the first three months of the instigation of direct payments and again at the 12-month point. It also sets out matters that the review should consider. Reviews of direct payments should place as few burdens on recipients as possible and, where possible, monitoring of the direct payment should be linked to monitoring of a child’s statement of SEN or a young person’s LDA, or at key transition points.
Paragraph 16 of the Pilot Scheme sets out the actions a local authority may take following a review. Local authorities must provide reasonable notice in writing of any decision to reduce or stop making direct payments, giving reasons. Upon a request from the recipient they must reconsider the decision and give written notice of the outcome of that reconsideration (Paragraph 16(3) to (4) of the Pilot Scheme).
Paragraph 17 of the Order sets out the circumstances in which local authorities must stop making direct payments, including where consent is withdrawn or where the conditions for making or receiving a direct payment are no longer being met. Where local authorities stop making direct payments they will need to ensure that the statutory duties referred to in paragraph 3 of the Pilot Scheme continue to be fulfilled through the provision and arrangement of services through other means.

Repayment and Recovery

In certain circumstances the Local Authority may seek repayment and recovery of direct payments of funds that have not already been spent on the agreed provision. These are set out, along with the process for seeking repayment, in paragraph 18 of the Pilot Scheme and include circumstances where the direct payments have been misappropriated or where a change of circumstances has had an impact on the agreed provision.
In further education, the local authority will need to take responsibility for auditing direct payments, and for funding provision to the end of the direct payment period in the event that direct payments are stopped before the planned end date. All providers should ensure they keep accurate records in relation to the direct payment for review by their local authority.The provider (FEC / ISP) will need to declare to the EFA full data for a direct payment holder through the ILR. This will need to reflect the full allocation originally made for that student as the provider would have done had the direct payment not been put in place. This will support accurate future years allocations. The EFA will publish additional supporting information in its documents Placement Information: Learners with Learning Difficulties and/or Disabilities at Independent Specialist Providers 2012/13 and Placement Technical Guidance for Independent Specialist Providers 2012/13

Conditions to be complied with by the person receiving direct payments