“We can tell you that you have to use an agency from our preferred provider list for your direct payment funded services”

There are essentially two ways to take a personal budget – as a direct payment or as a ‘managed’ personal budget.

‘Managed’ – in this context – means the council’s officers making a contract for the service, in as personalised a way as a suitable provider will allow, or feel it would be necessary or feasible to offer.

With a Direct Payment form of a PB, the client is the purchaser, the employer, the contractor – (even if they have someone helping them, as long as that person has not been appointed the Authorised Person on the basis of lack of capacity on the part of the service user) and thus owes the normal legal obligations associated with all those roles…and has the rights too, that go with the roles, including who to hire or fire.

The council can attach wide ranging conditions to direct payments, but the conditions have to be reasonable. The money is public money, yes, but once it has been paid into the hands of a client, it becomes private money subject only to the conditions on which it was granted.

That’s one of the reasons one has to have a modicum of cognitive capacity, to be able to agree to these conditions.

It is highly unlikely to be lawful to demand that a Direct Payment 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.

It is not so controversial, in legal terms to insist that a person deemed to require help to manage the payment, has it from a particular organisation. Councils will have either commissioned or grant funded such an organisation, and the management support is not provided under s18-20, in the same way as services to meet Care Act needs

The regulations provide for the making of conditions, but public law will constrain the scope of those conditions in light of the purpose of direct payments in the first place.

 4.—(1) A local authority may make a direct payment subject to other conditions.

(2) The conditions referred to in paragraph (1) may, in particular, require that—

  1. a) the needs may not be met by a particular person;

[a person can be an organisation or an individual – there is this backstop power to make a direct payment conditional upon NOT using a named provider, and it would be impossible to name all providers not on the approved list!]

  1. b) the adult or authorised person (in the case of direct payments made under section 32 of the Act) must provide information to the authority.

(3) The conditions referred to in paragraph (1) may not require—

  1. a) the needs of the adult to be met by any particular person;

[so the use of the condition to eliminate all but one preferred by the council for whatever reason, is prevented]

So it is a reasonably safe predication that whilst the council can ask for information so as to be alerted to the possible choice of a supplier that may be considered inappropriate, the council is not allowed to ‘prescribe’ who the provider or employee is to be, or what steps the employer must take in relation to that relationship.

A council is allowed to withhold direct payments, however, unless conditions are met, so it has the upper hand, in that sense, unless a condition is challenged.

In one other sense there is constraint as to the choice of provider – not a condition, but a complete bar on particular usages. A person cannot spend a direct payment, on something which it is simply not allowed to be spent on – such as a nursing service that only a registered nurse would be qualified to do, in one’s own home. And one cannot be spent on long term residential care other than in pilot scheme areas.