When is a Direct Payment, not a Direct Payment?

Direct Payments were introduced in the 1990's, after much lobbying by disability campaigners, to allow users of local authority care services to receive cash in lieu of state-arranged services to meet eligible needs under the many and various community care laws.  The idea was to give people greater choice and control over the way their support needs were met - so, for example, instead of relying block-contracted or local authority providers of domiciliary care, a person could use the cash to employ a personal assistant (PA) - giving them control over important things like who supported them, when, and on what terms. (If you've never dealt with a domicilliary care provider, you might not appreciate what a struggle it can be just to get them to send you somebody you like, or at least don't mind, and at a time that is convenient to you.  You might get a multitude of workers turning up at all hours of the day except the ones you want, staying for 15 minutes while you explain your particular care needs, then having to bugger off again to travel halfway across town (worker unpaid for that time, more likely than not) to offer somebody else a choice between having a wash or having breakfast as they're running late.  Did working in domicilliary care leave me cynical?  Well, it's not just me, see the EHRC report on home care services).

To return to the topic, direct payments are bloody brilliant for some people, but they don't work for everyone.  In particular, they're not brilliant for people who aren't able to manage the complex accounting, commissioning and employment (if they use a PA) side of things, or haven't got anyone else willing to do so on their behalf.  Various people have raised 'safeguarding' concerns about privately arranged care, but they're too complicated to discuss here.  Also, even though Direct Payments were about giving people more choice and control, you might find that the level they're set at is so low the only 'choice' you have is the cheapest service on the market.  And, increasingly it seems, local authorities are finding ways to continue to exercise a degree of control over how you spend the money...

The Community Care (Direct Payments) Act 1996 gave local authorities a discretionary power to award direct payments in lieu of services, which the Health and Social Care Act 2001 converted into a duty provided the person's needs call for the provision of care services, and various criteria set out in regulations are met.  The Health and Social Care Act 2008 allowed direct payments to be paid to a third party, again provided certain criteria are met and that third party is a 'suitable person', so that they can arrange care on behalf of the person whom the services are for.  This is used by people who aren't able to arrange care on their own behalf, perhaps because they 'lack capacity' or for other reasons.

There's a bit of a dearth of proper guidance about direct payments (some non-binding guidance here though).  For example, there's no binding guidance on what the level of a direct payment should be - some local authorities have taken to using Resource Allocation Systems, some use ready reckoners based on how much support they think a person needs, and some use a random number generator*.  And there's not much guidance on how a local authority and the service user are supposed to agree that the payment is being put to the appropriate use.  For example, a person might think 'well, if I do without that extra hour of support on a Friday, I could use it to do something fun to improve my mental health, which is what the services are supposed to be for' and the local authority might go all best-value on them and decide that they have admitted they can do without the support,  and cut the budget because strictly speaking having fun isn't an eligible need.  And yes, there are lots of local authorities doing really cool things with personal budgets and direct payments, but realistically not all have got with the self-directed support program and there isn't much guidance service users can rely on to say 'hang on a minute, I thought I could choose what I did with my direct payment...'

Anyway, recently I've been chatting with a few people about pre-payment cards.  Some local authorities have introduced these - from what I can gather they are a debit card for an account that has been set up by the local authority, which the service user (or whoever arranges the support for them) can use to pay for services.  They get statements online, or from the local authority (but seemingly not the bank), which makes me think that the account is probably in the name of the local authority but the service user can draw from it [Apparently the account is in the person's own name, but the LA can also see the funds inside it - the point is that it makes monitoring easier because you can see the cash going out directly on the statement.  I'm not sure if the LA can also withdraw money from the account?]. The people I've been chatting with have said that these pre-payment cards come with some restrictions on what you can do with them - like you can't withdraw cash, and (in some areas) you can't use them to pay for account management services (ie. somebody to take on the payroll and employment elements of hiring a PA) [Apparently this is because it means the LA can't monitor what you're doing with the money just by looking at your bank account; see this report by Demos, p96-97, for discussion of how pre-payment cards can deliver big savings for councils in monitoring and auditing, but only if everybody uses them and not traditional direct payments, requiring monitoring of receipts etc].  This can be really problematic, because it means that if you are somebody who can't manage the employment elements of hiring a PA using a direct payment, and you don't have anybody around you who is able or willing to, you basically can't have a PA.  You have to go back to ordinary, council arranged, domicilliary care services, which doesn't suit everyone.  And if you can't withdraw cash, then it's hard to do things that typically use cash - let getting a taxi - with your direct payment.  So whilst prepayment cards may make it easier for councils to monitor what you're up to, and may save some admin in setting up a bank account, they may also impose more limitations on what you can do with your money...

...which set me thinking.  If the money isn't in your own bank account, you can't withdraw cash, is it actually your money?  [I suspect it is, although this question really is too metaphysical and involves areas of law I'm not entirely clear about]  And is it a direct payment?  And even if it is a direct payment, can you have these blanket rules like not being allowed to withdraw cash and not being allowed to pay for account management services, provided they are part of a support plan to meet eligible needs?  My ears prick up at blanket rules, because it sounds a lot like fettering to me.  And the impact of not being able to use managed accounts will be felt more by people with the kinds of disabilities which impair their ability to manage complex administrative, commissioning and employment arrangements... which sounds a bit like indirect discrimination to me.  Anyway, having posed the metaphysical question of 'when is your money not really your money?', and suggested these restrictions might be ripe territory for judicial review, I'll leave it to others to answer the question: when is a direct payment not really a direct payment?

Answers on a postcard please.

*Sarcasm

[Update! The case of H and L v A City Council [2011] was, very sensibly, brought to my attention, which found that requiring that a Direct Payment be directly to a management organisation (so the inverse of the situation discussed above), who could employ PAs but had to tell the authority the names of the staff, defeated the very purpose of the direct payments scheme and so was unlawful.  It's not quite the same as the situations described here, but if people don't have the option of using their own account, that might be problematic. Munby LJ endorsed the following passage from the government's non-binding guidance on direct payments:

"Councils may set reasonable conditions on the direct payments, but need to bear in mind when doing so that the aim of direct payments is to give people more choice and control over their support and how it is delivered. For example, individual choice and control would not be delivered were a condition to be set that someone who receives direct payments might only use certain providers. Conditions should be proportionate and no more extensive, in terms or number, than is reasonably necessary. Councils should also avoid setting up disproportionately intensive monitoring procedures. Financial payments should not begin until the recipient has agreed to any conditions that the council considers are necessary in connection with the direct payments. In order to avoid delays for people requiring support, councils should take all reasonable steps to resolve issues about conditions in a timely manner."]