By Belinda Schwehr
These questions have been raised with Belinda through her legal training sessions and webinars.
Are direct payments (DPs) the default method of meeting needs, now?
They may well be “the Government’s preferred mechanism for personalised care and support” (Care Act, statutory guidance, paragraph 12.2) but they cannot be the ‘default’ mechanism because a capacitated request is needed before the council can be let off of its statutory duty with regard to meeting needs. Also, the guidance states, at paragraph 12.5: “People must not be forced to take a direct payment against their will, but instead be informed of the choices available to them.”.
How many ways are there to benefit from (ie manage) a personal budget (PB)?
Language matters here: there are only two ways to benefit from a personal budget (the council spending the budget to commission services, or the client or someone else receiving the budget as a direct payment to spend) but there are two or three different ways to benefit from the direct payment form of a PB.
Those DP management options turn on
- whether one has capacity to request one, and wants to do the admin in person, engaging providers and buying services or employing/engaging individuals;
- if one would prefer not to manage in person, whether one has a willing and appropriate nominee to help the DP client to manage;
- whether if one lacks capacity even to request, there’s a willing and appropriate person to be appointed by the council as an authorised person to take the payment in their own name, in lieu of the service user.
Other variations, called individual service funds (ISFs) by the sector, involve the selection of a service provider to receive some of the budget as fees for care, but then operating also as the DP holder’s agent for a separate payment for further service commissioning on the client’s behalf; but that’s just the DP holder buying two different services from a company or a person.
It may also be done whereby the provider is the main contractor, taking the whole budget as fees, but then sub-contracting out some of the services covered by the budget, through discussion with the client or a circle of support.
ISFs can also be set up without the person having a DP at all, but instead participating along with their relatives and circle, if necessary, in the selection and scoping out of the relevant roles for all concerned parties, by the council. This is simply a form of a commissioned personal budget.
A legal right?
Is a DP a legal right or a matter of discretion?
A council can refuse a direct payment if it does not wish to provide one, as long as it has legally defensible reasons – which it has to share, so as to enable a person to address them, if they choose.
The local authority must make direct payments if the conditions set out in the Care Act and its direct payments regulations are met – but since two of the conditions allow for much difference of professional judgement, on the same facts, one would never safely call it ‘a right’.
Apart from the basic question of capacity to request one, and the question of whether the person is formally prohibited from receiving a direct payment, there are two obvious aspects of residual control by the council over the ‘right’ to a direct payment. Both are woolly: one is capability to manage the payment, with whatever help is available, and the second is the question of the appropriateness of paying the money to the user or to their nominee, as a means of meeting the needs.
So it is sensible to accept that the authority has to be satisfied with one’s nominee, at the very least, in a general way, before a person can say that they have a right to a direct payment.
The guidance states (paragraph 12.18): “Where refused, the person or person making the request should be provided with written reasons that explain the decision, and be made aware of how to appeal the decision through the local complaints process.” At paragraph 12.22 it says that the written reasons “should set out which of the conditions in the Care Act have not been met, the reasons as to why they have not been met, and what the person may need to do in the future to obtain a positive decision. The consideration stage should be performed as quickly as is reasonably practicable, and the local authority must provide interim arrangements to meet care and support needs to cover the period in question.”
Is extra cost related to the difference between the council and the client doing the purchasing, legally relevant to whether a DP is an ‘appropriate’ means to meet a need – ie a justification for denying someone a DP?
Care is required here: of course cost is relevant to the lawful finalisation of the personal budget, but this is a different question, about refusing a direct payment. One can’t finalise a plan until one has finalised the budget, and to my mind, one can’t finalise a budget until one has sorted out the deployment route, because it could make an obvious difference, and the total sum has to be ‘sufficient’ to meet the assessed needs (statutory guidance, paragraph 12.25). The decision about the ‘appropriateness’ of a DP as a method of implementation will have to take place before a plan has been finalised.
Until there is a case that says it isn’t relevant, I believe that councils will continue to assert that a cost comparison between deployment routes for the self-same thing, or service, is a lawfully relevant consideration, even though it’s just about how the money is spent and who is spending it.
A very powerful example is equipment: it is hard to imagine that it will ever be cheaper for a person to procure a specialist piece of equipment compared to an equipment store buying it in, in volume. There is no regulation saying that there can’t be DPs for equipment, or that money spent on buying the equipment doesn’t feature in a personal budget. I can’t imagine the court saying that a council has to give someone a DP in these circumstances.
In real life, the person’s realisation that they’d be liable for the maintenance, once the item was theirs, is probably enough to deter DP requests for equipment, but the theory sits uncomfortably with my instincts that the meaning of the word ‘appropriate’ was not ever intended to encompass purely financial considerations.
Let us park the question for the moment, and come at it from another angle.
Can the council ever give a person taking a DP less than it would cost the council to meet need?
That depends on how one reads the definition of a proper personal budget. The statutory guidance, at paragraph 12.27, says: “The local authority should have regard to whether there will be costs such as recruitment costs, Employers’ National Insurance Contributions, and any other costs by reason of the way in which the adult’s needs will be met with the direct payment. If these costs will be incurred they must be included in the personal budget (and thus direct payment) if it is appropriate for the adult to meet the needs in a way which incurs the costs.” That means that if you know the client is going to employ someone, you can’t not give them the inevitable on-cost sums, but if it’s less than what it would cost you to engage an agency with employees, then it’s still a great idea.
My instinct tells me that if the way in which the person proposes to meet their needs is approved by the council and actually costs less than the council would have to spend, meeting the need, then I believe that the courts would not say a council was still obliged to pay the person more than it would actually cost.
I think the reverse is true too: where the council approves a way that is costlier than what it would have to spend, then it must pay that too, and that the method includes the deployment route, ie a direct payment.
The council must arrive at an objectively rational and able-to-be-evidenced final amount based on a view of the costs – the cost of the actual means by which it has been agreed to meet the assessed eligible unmet needs and any further needs agreed to be met under section 19 of the Care Act.
Hence if the direct payment route has been approved in principle, because the four conditions have been met, then the council must fund the real cost of meeting the need in that way, not the cost of the cheapest alternative way or of other ways through which the council could have met the needs directly.
But that still begs the question whether the question of deployment route-related extra cost can be used to deny a direct payment.
Denying a DP in this context, or limiting the amount to the lower cost as if the council were buying the same thing, will lead to challenges in the Administrative Court, but whether they would be successful is a moot point. Control over how one’s services are delivered is part individual wellbeing (section 1(2)(d) of the Care Act), which councils are obliged to promote which strengthens the client’s hand somewhat.
The strongest argument, in my view, against it being lawful to take it into account is that cost effectiveness has not been made an explicit part of the legal framework, here, whereas it has been specifically put into the personal health budget regulations as a reason for a clinical commissioning group refusing to meet the needs via the direct payment route.
Is there any reason for a council to pay the DP gross instead of net of the charges?
Yes. If an authorised person or nominee has no actual authorised access to the person’s own monies, they will not be able to access the other part of the total cost of the services that have been assessed as needed. Many will skimp, and this is bad news for the success prospects of the direct payment, and bad for councils who make this more likely than not to happen.
Can you highlight some things that a council might say could not be bought with a DP?
- Registered nurse nursing care in a person’s own home, because that is not for the council to buy, so it can’t fund a DP for something that it can’t itself buy.
- Long-term residential care, because the pilots for direct payments in residential care have not been rolled out to be mainstream as yet – I doubt they ever will, myself.
- Unfair dismissal compensation for wrongdoing that was the fault of the client!
And here are some more discretionary ones:
- Help with having sex – because although buying sex is not illegal, and could be highly relevant to the development of new relationships after someone has had an accident, councils are probably entitled to a policy on spending on particular things, to protect themselves from having to deal with harm to their own reputations.
- Entertainment fees for an event, for a person for whom mainstream recreation is not inaccessible by reason of their particular disability or condition.
- Hedge funds (however profitable!), gambling (however exhilarating), alcohol, cigarettes (although neither are illegal), drugs of any sort including homeopathic remedies, and actual food for someone who has no condition-related difficulty in accessing adequate nutrition and hydration.
- Paying off of loans, however good for a person’s wellbeing that would be.
- Legal advice about the legality of the care package!
Conditions on assistance
What sort of conditions could be lawfully imposed on a DP, about help, and helpers?
It is clearly lawfully possible for a council to insist that a person has help, before it will let them have a direct payment; a council has to be satisfied that the person can manage the payment, and if it’s not, it can just refuse a direct payment. So making it a condition that someone has help to manage, if there’s evidence that they may struggle, could not feasibly be controversial.
The council is also able to decline, on the basis that they don’t think that a person’s own preferred nominated helper is up to it, or think that that particular nominated person is in some other sense, not appropriate.
And councils are not legally obliged to pay for direct payment clients to have any help, let alone any outside help or admin support, even if they think that the person needs it, in order to make managing a DP feasible, and thus encourage take-up. All the guidance says is that: “Local authorities should therefore take all reasonable steps to provide this support to whoever may require it.” In legal terms, if a council doesn’t have to fund this sort of help, applying conditions to offering it is very unlikely to be unlawful.
Paying for direct payment support or brokerage, or grant funding this sort of help through the council, will clearly mean that the person is encouraged to seek help willingly, and that gives the council certain leverage, because it can say that it isn’t ‘necessary’ to fund anything else.
Choice of support service
What about conditions limiting choice of direct payment support service?
Choice is an over-used word here in adult social care: everyone accepts that it is unlikely to be lawful to demand that the money be spent only on the council’s preferred providers of care and support. That would risk challenge as a condition negating choice – the whole point of the direct payment scheme. Saying ‘you must not use any provider who is not approved’ would be unlawful. Instead, in support of potential safeguarding concerns, there’s a condition that provides for exclusion of named providers, but no condition allowing a council to prescribe any particular specific provider.
But I think it may be possible, lawfully, to insist that a person doing admin or payroll by way of support for a direct payment’s management be on an approved list. The fact that there’s an extra discretion to permit a person where necessary to pay their own close relative to administer the fund might be thought to run counter to the notion of insisting on approved providers, but any such person will already have been nominated by the service user or other holder of the payment, and will have been approved, albeit in a different sense, under the general condition about the council’s being satisfied that a payment to a nominee is appropriate.
The R (Collins) v Nottinghamshire County Council  case has made it clear that removing accreditation from a popular provider, thereby necessitating a transfer to another, given Nottinghamshire County Council’s policy to require accreditation, was not essentially unlawful. The choice principle and the thrust of the Care Act were insufficient to deter the judge from upholding Notts’ decision, despite citation of paragraph 10.48 of the statutory guidance exhorting councils to avoid lists of prescribed providers as not fitting “with the government’s vision of personalised care”. It isn’t clear whether the judge’s decision was because of the particular circumstances, which were very extreme in relation to abuse of the system, or because it was not fundamentally about limiting choice of care and support providers – only the DP management services – whilst the statutory guidance was focusing on providers of actual services to meet assessed needs.
Oldham then changed its own policy and discontinued an accreditation requirement – unnecessarily, in my view. It also hinted that it might one day have to charge for this extra funding, but in my view a charge would not be legal, at least not under the Care Act, because the funding wouldn’t have been for meeting needs for care and support, but simply for admin support of a particular deployment route. If the service had been care planned and commissioned for, that would not ever have been chargeable!
Belinda Schwehr, Care and Health Law
Tel: 01252 725890