Direct payments: Answering frequently asked questions

Question 07. How can the money for schemes be secured when it's tied up elsewhere?

Of course, this will mean you have to change the way you manage your budgets and this won't always be easy. You cannot tell people that they cannot have a direct payment because all the money is tied up in block contracts.

Dr Stephen Ladyman, former Minister for Community, Department of Health, 26 January 2004

One of the issues raised in the practice survey is the 'postcode lottery': some areas promote and deliver payments where others do not; some provide sufficient funds and others state that the money is tied up elsewhere.

Nevertheless, the practice survey identified several examples across the country where budgets have been secured.

Provision needs to be standardised. At the moment you get different things on offer depending on where you live. In some places you get a good support service and in others you might not get direct payments at all.

Direct payment service user

One suggestion is 'top slicing' of the entire budget across all local authority services to create a direct payment pot. What is clear is that funding needs to be specifically allocated, and budgets must include dedicated costs for administration, publicity and promotion.

In physical disabilities, we have freed up money from modernising day provision and used it differently. DPs predominate in this service area and it is free from in-house services and block contracts. We need to develop further, contracting in-house provision and decommissioning in other areas so we can increase the flow of money and flexibility of budget.

Gateshead LA

We established a budget for the direct payment support organisation by top-slicing operational budgets on the basis of anticipated usage - this will be adjusted in the light of actual take-up. Funding for the DPs themselves does, and will continue to, come from operational assessment teams purchasing budgets as DPs replace traditional methods of arranging services.

South Gloucester LA

Each customer care group has its own budget - e.g. learning difficulties, they were awarded a target of 40 users this year. First of all, we would monitor progress, evaluate the response in our quarterly report. If figures are very low, we then try to identify problems that exist and look at ways to encourage users in different ways. It would be addressed at monthly meetings attended by the DP champion, DP coordinator and DP advisers.

Hounslow LA

Day centres for physical disabilities closed and budget transferred to day care services, where individual advised of community resources. Direct payments fund these activities.

Cambridgeshire LA

Communication with the finance section is enabling the virement of funds from the home care budget to reflect the growth of direct payments.

Wakefield LA

Pay rates for DP support workers in direct payment support services need to be equalised around the country. Support workers are coming close to doing the job of a social worker without the training/recognition.

Independent Living, Norfolk

NCIL (14) reports that the evidence showing direct payments to be cost-effective seems to have led some authorities to assume direct payments must always save them money. This is despite all the advice from good practice authorities, stressing that direct payments represent an effective, targeted use of resources, whether or not they actually save money. Budget issues also have an effect on individual assessments, and thus on the design of viable direct payments packages.

The argument for cost effectiveness was tested again by Dawson in 2000. (17) It concluded that:

"A direct payment scheme that involves disabled people from its inception and throughout its operation can provide a very positive alternative to direct service provision and one which empowers disabled people to live their lives as they choose with no additional cost to the Social Services Department."

Evaluations have been made of a number of other direct payments schemes. Most have not been published. Similar themes emerge in them all - for instance, that payments are cost-effective. (14)

Clearly, money is a significant issue, both for the local authority and the direct payment service user. For the latter, the local authority needs to consider if they are setting up the service user to fail by not providing sufficient funds - for example, for them to employ a personal assistance with suitable experience.

Many service users have argued that they should be able to offer a personal assistant a minimum of £10 per hour, although it is likely that this amount will have geographical variations. Nevertheless, recruitment is not an easy process, and is made that much harder with insufficient funds.

It is up to the local authority to decide on the amount of a direct payment, but it must be enough, taking into account any contribution which the individual is expected to make to the cost of his or her care package, to enable the recipient legally to secure the relevant service to a standard which the local authority considers is acceptable. (18)