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DIRECT PAYMENTS
SOCIAL WORK (SCOTLAND) ACT 1968:SECTIONS 12B AND C
POLICY AND PRACTICE
GUIDANCE

Part 5: Direct payments in practice

Assessment for direct payments

132. Direct payments can only be offered to someone who has been assessed as needing either community care or children's services (or in the case of parents, where their children have been assessed as in need of services). The decision to offer direct payments therefore follows the assessment of an individual's needs and capacity (with support if necessary) and the decision that provision is to be made in some form.

133. In addition to the local authority's assessment of the person's needs, if the person has expressed an interest in receiving direct payments and is eligible then the process will need to include an assessment of whether direct payments are appropriate. In particular, it will be necessary to build in time to assess whether the person is able to manage them. The person also needs time (and possibly support) to think through the implications of taking on direct payments and to consider whether this is what he or she wants. Local authorities should make the person (and their supporter(s) or representative(s)) aware of the possibility of receiving direct payments at an early stage to give as much time as possible to think about it. Local authorities should also give the person as much information as possible about what receiving direct payments will involve, before asking the person to make their decision.

134. Some people may already have clear views about the activities with which they need assistance. Others may need help or encouragement to play a more active part in the process. This may mean practical assistance, such as providing interpreters for those who are unable or find it difficult to communicate in spoken English, more intensive advocacy support to help people to think through and ask for what they need, or simply allowing them more time. In some areas, self-assessment forms designed by user groups have been used to prompt people to think through the tasks with which they need assistance before their needs are assessed by the local authority.

Carers and assessments

135. It is already good practice for local authorities to involve carers wherever appropriate in the assessment of the person they care for. The 2002 Act now formally requires local authorities to take account of the contribution of carers who provide (or intend to provide) "a substantial amount of care on a regular basis", and to take account of the views of the carer and the person they care for before deciding what services to provide to the cared-for person. They are to be regarded as key partners in the provision of care. Carers should be consulted and taken into account in the assessment process irrespective of whether the person being assessed is likely to be offered direct payments or services after the assessment.

136. Carers are also entitled to an assessment in their own right of their ability to care. Local authorities have a duty to carry out an assessment of a carer's ability to care if the carer requests this and is providing "a substantial amount of care on a regular basis" (under section 12A of the 1968 Act, as amended by the 2002 Act). The 2002 Act also gives local authorities a duty to inform carers that they may be entitled to such an assessment. A carer's assessment may be carried out separately, or combined with the assessment of the cared-for person.

137. The 2002 Act does not however, give carers an entitlement to receive services or direct payments in their own right. The purpose of any carer's assessment is to establish what level of care the carer is able or willing to provide, and establish what resources the carer needs to help them in their caring role, and maintain their own health and well being. Since carers have extensive experience and knowledge of the person they care for, an important aspect of the assessment is to seek the carer's views on the support needs of the person they care for.

138. In addition to taking account of the carer's views and contribution (see paragraph 135), the local authority must take account of the results of the carer's assessment, whether it is carried out separately, or as part of the assessment of the person they care for, in making decisions about the services to be provided to the cared-for person. This duty is not affected by the possibility that the cared-for person may be offered direct payments instead of services. The Executive issued guidance in March 2003 about carers' rights to assessment following the 2002 Act ¹⁸.

Deciding how direct payments are to be used

139. In order to satisfy itself that the person's assessed needs will be met, each local authority should discuss with anyone to whom it proposes to offer direct payments, how that person intends to secure the assessed services. Local authorities should make clear to people, before they start to receive direct payments, what the money may or may not be spent on, the conditions attached and how much flexibility the person has over the way the money is spent. Local authority will wish to bear in mind that the aim of the policy is to give people more choice and control over the provision of the services (including equipment and temporary adaptations) they are assessed as needing. To achieve this, some flexibility over the way the money is spent will be necessary. The service purchased with a direct payment does not have to be the same as the service that the local authority would have arranged. The important thing is that the local authority is satisfied that the service will meet the assessed needs of the disabled person. However it is important to bear in mind the Regulations, which prevent people from using direct payments to secure services from their spouse, partner or a close relative living in the same household (paragraphs 80 and 81 refer).

140. By exploring innovative and creative options, it may be possible to identify alternatives that both cost less and meet the individual's needs more effectively. Where the individual's needs fluctuate over time, it will be important to discuss in advance how the direct payments will be used to secure a package of assistance which varies according to need. Local authorities may also wish to consider offering someone a combination of direct payments and services. A local user-led support organisation could offer help if the individual has any concerns about how direct payments could be used.

Purchasing services

141. Apart from the prohibitions set out in regulations or this guidance, local authorities should allow people to purchase services from anyone who is able to provide a service which will meet the individual's assessed needs. Local authorities cannot insist that a person contracts only with an agency or service provider (in which case to provide these services the agency or provider may require to be registered with the Scottish Commission for the Regulation of Care ("the Care Commission")). Disabled people may contract with or employ individuals who are not regulated by the Care Commission, provided that those individuals do not fall within the list of persons excluded by Regulation 4 of the 2003 Regulations. ( Paragraphs 80 and 81 give more details.)

142. Following the 2001 Act, certain community care services are subject to independent regulation by the Care Commission against subordinate legislation and national care standards. The Care Commission has been regulating day care provided by local authorities and independent and voluntary agencies (along with a range of other community care services, including those offender accommodation services, which were previously regulated) since 1 April 2002. Housing support service providers and child-care agencies have been subject to regulation by the Care Commission since 1 April 2003. Individuals providing childminding services are also required to be registered. Home care services will fall to be regulated - for the first time - from a later date, as will some other services such as the remaining offender accommodation, adult placement, adoption and fostering. An individual who wishes to purchase a registered service will now be able to find out about its quality from the Care Commission. Local authorities should make individuals aware that inspection reports on registered services, including any conditions on the registration, will be made available, by the Care Commission, to the general public by a variety of means including through the Internet ¹⁹.

143. While local authorities may only provide registered services, people who use direct payments can buy registered and unregistered services. It should be made clear to individuals that the new regulatory system does not cover situations where an individual employs a person directly whether paid for through direct payments or otherwise. In these circumstances the responsibility for ensuring the quality of service rests with the individual.

Enhanced Disclosures

144. The Executive is working with "Direct Payments Scotland" to establish a mechanism for direct payments recipients to access enhanced disclosures on the people they are about to employ if they so wish. However it should be stressed that disclosure checks alone do not guarantee that a person is suitable to provide services, particularly children's services. Potential employers should be advised of the importance of having a rigorous recruitment procedure in place where the taking up of references is essential. The local authority should ensure that individuals are made aware of organisations that can offer help with these services and that the individual has all the assistance he or she needs.

Care/personal plans

145. Local authorities are reminded of existing guidance ²⁰, which states that services to be provided or arranged and the objectives of any intervention should be agreed in the form of a care/personal plan, a written copy of which should be given to the individual and their carers. Similarly when planning services for a child, a local authority should draw up a plan in writing with the family. This guidance applies equally where direct payments are provided in lieu of services.

146. Care/personal plans in relation to direct payments will need to cover all the areas discussed between the local authority and the individual and set out clearly what has been decided. The plan should make clear to the individual what the money may or may not be spent on and how much flexibility he or she has in the way in which the money is spent. It should also include the type of variations to the package of services which the local authority would expect to be asked to approve in advance, the information the individual will be expected to provide for audit purposes and any other conditions which the local authority has set. Annex A to this guidance contains a checklist of points, which should be sorted out before direct payments start and which should be covered in the care/personal plan.

147. The Executive recommends that a contract be drawn up between the local authority and the individual. This document should set out, in easy to understand language, the duties of the local authority as well as the individual. "Direct Payments Scotland" can provide a sample letter of agreement for information. However, local authorities may wish to discuss the contents of such a contract/agreement with their legal advisers.

Best value

148. Local authorities are reminded that they are required to operate within the principles of long-term best value. A local authority should consider carefully the cost-effectiveness of making direct payments against the services or equipment and temporary adaptations that it would otherwise arrange. For example, direct payments may necessitate a slightly higher investment to achieve long-term benefits and savings. In any comparison between the cost of direct payments and the cost of a service, the local authority should use the full cost of each, taking account of any administrative costs and other overheads. Local authorities may, if they choose, make direct payments at a greater cost than the cost of arranging the equivalent service. In considering whether the increased cost is justified, the local authority should take into account such factors as whether the person would be able to do more or to have a higher quality life or live more independently with direct payments. It is important for local authorities to recognise that there may be start up cost especially if the person decides to employ his or her own staff which may decrease once arrangements are in place.

Calculating the amount of direct payments

149. It is up to each local authority to decide on the amount of direct payments and on what they are supposed to cover. The Executive is not setting any limit on the maximum or minimum amount of payment, either in the amount of services it is intended to purchase, or on the value of the direct payments. The 1968 Act requires local authorities to make direct payments at a rate, which is equal to the local authority's estimate of the reasonable cost, (based on the principles of best value in paragraph 148 above) of his or her securing the provision of the preferred service. This means that direct payments must be sufficient to enable the recipient legally to secure a service of a standard that will satisfy the local authority that the person's needs are being met. Local authorities should consider the arrangements which each individual proposes to make when deciding on the value of payments. The following should be included in calculating the value of payments to employ personal assistants:

• Employers National Insurance;
• Employers Liability Insurance;
• Holiday pay;
• Sick pay & cover;
• Maternity pay & cover;
• Adoption pay & cover;
• Paternity pay & cover, and
• fees for payroll and bookkeeping.

In order to encourage good employment practice local authorities should also consider including the following in the direct payments calculation, where appropriate:

• training costs;
• emergency cover for staff absence;
• travel, subsistence and other costs likely to be incurred by a personal assistant to ensure that the personal assistant is not out of pocket, and
• administration - advertising, recruitment expenses.

Local authorities will need to discuss with the individual the arrangements that he or she is planning to make to meet these costs.

150. However, the local authority cannot be required to make direct payments to cover specific costs where there is a more cost-effective way of securing the service (whilst still enabling the individual to meet any legal requirements). Nor is the local authority obliged to fund particular costs which are incurred by the individual on a discretionary basis, which are not therefore essential in order to secure the service. Local authorities have discretion to decide whether to include an amount in the direct payments for costs, which they are not obliged to cover. Local authorities should bear in mind that if they set rates for personal assistants, which are too low, the individual might find it difficult to recruit and retain suitable staff.

151. The local authority should also discuss with the individual whether there are start up costs for the recipient, and what these costs might be, for example recruitment costs, and adjust initial payments accordingly.

152. There may be cases where an individual thinks that the total value of the direct payments should be greater than the local authority proposes and/or that his or her contribution should be less than the local authority proposes. In such cases, the local authority is under no obligation to increase the amount offered above the level which it considers reasonable to enable the recipient to secure the relevant services, taking account of the individual's contribution. (This is subject to the provisos in paragraph 149, which states that direct payments must be sufficient to enable the recipient legally to secure the required service.) The local authority may decide to increase the amount nevertheless enabling the person to secure his or her preferred service if it is satisfied that the benefits of doing so outweigh the costs, subject to it still being cost-effective in comparison with services arranged by the local authority. The Executive encourages a consultative approach to reaching a decision about the level of direct payments. However, where a case cannot be resolved through discussion, the local authority should advise the individual that he or she might pursue the matter through the local authority's complaints procedure ( see paragraph 188).

153. The local authority should give individuals as much notice as possible of the value of direct payments, and the contribution they will be expected to make to the cost of the service package before the payments begins, or its level is changed. This gives an opportunity for any dispute over the level to be resolved before the payments begin or the change takes effect. If that is not possible, then while any complaint is being considered, the individual may choose to manage on the amount of direct payments being offered, without prejudice to his or her complaint that it is inadequate. Alternatively he or she may choose to refuse to accept the direct payments, in which case the local authority must arrange the relevant services instead. If the local authority is satisfied that it would be a proper and cost-effective use of its resources, it may decide to pay direct payments at a higher rate than it had originally intended, until the dispute is resolved. This is entirely the local authority's decision and as always, it is up to the local authority to decide on the appropriate level of payment.

154. Direct payments recipients can use their own resources, for example ILF or Access to Work monies, to purchase additional or better quality services to those in their care/personal plan if they wish.

155. The Executive recommends that local authorities consider Factsheet 6 ²¹ produced by "Direct Payments Scotland", which offers advice on how to calculate the amount of a direct payment.

Assessing a service user contribution

156. The 1968 Act enables the local authority to require the individual to make a financial contribution to the cost of the community care services he or she requires, by making direct payments of less than its estimate of the reasonable cost of securing the provision of the service concerned. Direct payments can therefore be made net of the contribution which the individual is expected to make. This is equivalent to local authorities' power under section 87 of the 1968 Act to levy a charge for services that they arrange.

157. There should always be fair and equitable treatment between people who receive services from the local authority and direct payments recipients. Therefore, in considering whether, and if so how, to ask individuals to make a financial contribution, local authorities should treat people who receive direct payments as they would have treated them under the local authority's charging policy if those people were receiving the equivalent services. In particular, local authorities are reminded that since 1 July 2002, people aged 65 and over, have been able to receive personal care services (at home) free of charge. Therefore, where a disabled person aged 65 or over, chooses to receive direct payments to purchase this element of personal care (at home) the individual should not be asked for a contribution. (Local authorities should refer to Executive circular CCD4/2002: Free Personal and Nursing Care ²², particularly Section 5: Payment Mechanisms.)

158. Payments may also be made on a gross basis whereby the recipient receives payment for the full cost of the service and his or her assessed contribution can be recovered at a later date. In particular gross payments may be more appropriate for people, who are also receiving housing support services, as these are generally paid on a gross basis. Local authorities should take into account the views of users before deciding which approach to adopt.

159. Local authorities must ensure that when applying their charging policies to people who receive direct payments they must do so fairly and equivalently with people who receive services. Local authorities should refer to the Executive's circular No: SWSG l/97: Charging for Adult Non-residential Sector Care ²³ and CoSLA's guidance to local authorities on charging for non-residential care. While this is relevant in respect of housing support services it should be noted that people in receipt of housing benefit and those receiving housing support services on a short -term basis (up to 2 years) will receive these services free of charge. Also people who receive housing support services previously funded from the Special Needs Allowance package will also receive direct payments free of charge. Details can be found in the Supporting People Charging and Financial Assessment guidance ²⁴.

160. Under section 22(4) of the 1995 Act, local authorities have discretionary powers to charge contributions for children's services where the means of the family are sufficient.

Making payments

161. It is up to local authorities to decide how frequently payments should be made. To ensure that people are in a position to pay for services as they are purchasing, it is good practice to make payments in advance. It is important that where direct payments are financed from more than one local authority budget the individual receives one single payment to cover all the services he or she has been assessed as needing. Local authorities will need to set up mechanisms that enable them to monitor payments which are made and which minimise the risk of money being misspent. In considering what procedures to put in place, local authorities should bear in mind the likely effect of different options on the circumstances of people who are likely to receive direct payments. Whatever the arrangements for payment, they will need to be reliable, as late or incorrect payments may put at risk the persons' ability to secure the services they need. The local authority may also need to set up procedures for making additional payments in emergencies, for example if needs change or regular payments go astray. Local authorities should tell people, before direct payments begin, how and when the payments will be made. Where payments are made directly to a bank account a written statement of the payment details should be sent to the individual for information.

Monitoring direct payments

162. Consenting to receive direct payments means the individual taking on the responsibility for securing services to a standard which both the individual and the local authority consider is appropriate. The local authority is relieved of its responsibility to arrange services for that person, so long as it is satisfied that the needs to which the payments relate will be met through the arrangements made with the payments. However local authorities should not make assumptions that someone who is not receiving services to their satisfaction cannot manage direct payments. It follows that the local authority will need to set up monitoring arrangements so as to satisfy itself that arrangements are meeting needs.

163. Monitoring arrangements should be consistent both with the requirement of the local authority to be satisfied that the person's needs are being met and with the aim of the policy to increase choice and independence. Local authorities should seek to focus on whether the person's needs are being met, rather than on the service being delivered in a certain way. The local authority should discuss with the individual what steps it intends to take to fulfil its responsibilities in this area.

164. Each local authority will need to ask itself how it would know if someone was experiencing difficulty managing direct payments. It may be appropriate to rely on someone who has been managing his or her own services for some time to ask for extra help if he or she needs it. However, local authorities should not rely on people asking for help, particularly when someone begins to receive direct payments for the first time. Regular reviews should be arranged to ensure that the local authority has an opportunity to discuss the direct payment's arrangement with the individual ( see paragraphs 170 to 172). Where a local authority wishes to ask the person whether he or she is satisfied with the services he or she is securing, it should ensure that it communicates directly with the person wherever possible. Local authorities should seek to ensure that people do not feel inhibited from expressing reservations about the services they are purchasing, or about any other problems they are having in managing their direct payments, by a concern that their direct payments will be stopped automatically or arbitrarily. A local independent support organisation or independent advocacy service may help some people raise issues, which are giving concern.

165. Direct payments packages which include health services will require to be monitored by personnel with the necessary expertise to judge whether these particular assessed needs are being met. In most instances this will mean that health care staff will need to be involved in the monitoring process.

166. Each local authority should also set up financial monitoring arrangements for audit purposes, to fulfil its responsibility to ensure that public funds are spent on the intended services. CIPFA have produced guidance for local authorities on this point and local authorities should ensure that up to date advice is being used.

167. For direct payments to work, it is essential that these two forms of monitoring are co-ordinated. The financial monitoring should be carried out by a finance officer and monitoring of the services by the care manager/social worker. It is essential that that monitoring information is exchanged internally and that all those involved understand the purpose of direct payments, and the role that the local authority's monitoring plays in the successful operation of the policy. In particular, information from both forms of monitoring should be considered in any decision to change the level of, or to stop, direct payments.

168. As well as monitoring how well direct payments are meeting the needs of individuals, local authorities will wish to monitor how direct payments are working overall. In doing so, authorities should actively seek the comments and suggestions of people who receive direct payments or who have considered receiving them.

169. Local authorities should discuss with recipients the information they will be expected to provide and the way in which monitoring will be carried out. Direct payments should not begin until the recipient has agreed to any conditions, which are necessary for monitoring purposes.

Reviews and reassessments

170. It is essential that local authorities carry out regular reviews of the direct payment arrangements. The fact that the local authority is making direct payments rather than arranging services itself does not affect its responsibility to review the services the person receives at regular intervals. The projected timing of the first review should be set when direct payments begin. People should be made aware that they might request a review sooner if their circumstances change. The purpose of the review remains to establish whether the objectives set in the original care/personal plan are being met. However at review time the local authority will also wish to be satisfied that the individual is protected from exploitation and abuse. The local authority will wish to speak to the individual on his or her own during the review. If the individual needs support the local authority should ensure that the person giving the support is not the person helping to manage the direct payments or the person providing the services. Local authorities may also wish to speak to family members, carers etc. to satisfy themselves that the person is not experiencing any difficulties with the services being bought with the direct payments. A local user-led support organisation or independent advocacy service may help some people raise issues, which are giving concern. Where an attorney, guardian or parent is consenting to the direct payments the local authority will also wish to discuss arrangements with them.

171. It may be helpful to consider first whether the person's needs have changed, before moving on to review how he or she is managing direct payments and how well direct payments are working.

172. Local authorities should follow existing guidance on carrying out reviews. While an individual's needs should be reassessed at least every 12 months, initially at least the review of how the direct payments are working may require to take place more frequently. Following the review, the amount of direct payments may need to be increased or reduced.

When difficulties arise

173. Difficulties can be minimised by good assessments, clarity (e.g. about what the money can be used for), effective monitoring and reviews, appropriate support arrangements (where these are necessary) and by discussing potential areas of difficulty, and how they will be handled, with the individual before direct payments begin. It is important not to assume that when problems do arise that the individual cannot manage the arrangements. Peer support from a user-led organisation can play an important part in helping people to work through any difficulties.

174. Local authorities must discuss with each person what arrangements he or she will make for emergencies. Local authorities must ensure that the person receives the services he or she needs if the usual arrangements break down, e.g. through sickness of one of the person's personal assistants. It is reasonable for a local authority to expect the person to have contingency plans and these should be clarified at the outset. However if a local authority becomes aware that someone is unable to secure services to meet his or her needs, then its responsibility to arrange services for that person is the same as if it had not made any direct payments. The local authority will need to be prepared to respond in these circumstances just as it would with any other service user. It may decide to step in, albeit temporarily, and arrange the necessary services, but it should first consider providing assistance to enable the person to continue to manage his or her own services.

175. Examples of contingency plans which people who receive direct payments might make include making arrangements with independent agencies for emergency cover, or recruiting personal assistants who are prepared to work additional shifts at short notice when necessary. However, it remains possible that difficulties will arise which have not been anticipated and which cannot be covered by the arrangements the individual has made. In these circumstances, it will be helpful if the direct payments recipient knows they can contact a named individual in the local authority or a local support service whom they can ask for help.

176. If the local authority's monitoring or review process reveals that the person's needs are not being met, or if the person contacts the authority to seek emergency assistance, the local authority will need to consider what action it should take. Good communication between the different parts of the local authority involved will be very important at this stage. This may mean helping people to make other arrangements, or it may mean arranging services directly until they are able to make their own arrangements once more.

177. When difficulties arise, the local authority will wish to ask itself the following questions:

• Have the person's needs changed? If so, the person's needs should be reassessed and the level of direct payments should be reviewed.
• Is the amount of money sufficient to enable the person to secure the relevant services? It may be that experience shows that there are other costs which were not taken into account when the cost was calculated initially, or that anticipated costs have not, in fact, arisen. It may be necessary to review the level of direct payments.
• Is the person still able to manage direct payments? Local authorities need to continue to be satisfied that people can manage direct payments. However, difficulties will not necessarily mean the person cannot manage. There is inevitably a learning process when people begin to receive direct payments and people may make mistakes, but still be capable of managing direct payments in the longer term. Even experienced direct payments recipients may have problems at times but with some support, be capable of overcoming them.
• Does the person wish to continue receiving direct payments? As long as the local authority considers direct payments are appropriate, it should attempt to enable people to overcome difficulties and prevent them becoming discouraged when they experience difficulties. However if someone has decided that he or she no longer wishes to receive direct payments, then the local authority should enable him or her to switch to services.
• Has all the money been spent on the services for which it was intended? If the money has been diverted to other purposes there may be a case for considering seeking repayment. There may be a case for requiring repayment of some of the money even where the person has secured services to meet his or her needs, for example if he or she has secured the service for less than the expected cost and so there is a surplus. However the local authority should bear in mind that there might be a good reason for a recipient to build up a surplus, e.g. to pay his or her employee's quarterly PAYE. The local authority should explain before someone begins to receive direct payments the circumstances in which it would seek repayment.
• Have services for which the person has paid been received? If not, then it is the responsibility of the individual to seek a refund from the service provider. If the local authority has made further provision for services to meet the same needs or if the services were not received because they were no longer required, then it may wish to consider requiring repayment of the direct payment from the individual.
• Has the money been spent wisely? If not, the person may need more support to enable him or her to manage, or the local authority may decide that he or she is not capable of continuing to manage direct payments and should receive services instead.
• Are the services being purchased safeguarding the person's welfare? If there is any doubt local authorities should speak to the individual receiving the services on his or her own (whenever possible) and review the services being purchased with them. Where an attorney, guardian or parent is consenting to the direct payments the local authority will also wish to discuss arrangements with them.

178. Since the introduction of direct payments concerns have been raised as to whether or not local authorities could be held liable for the actions of the recipient. There are particular concerns about local authorities being held liable for the way in which recipients treat their employees and children being abused by personal assistants. It is important for local authorities to discuss these issues with their legal advisers where they are concerned. Local authorities should also discuss what might happen in these circumstances with recipients and carers as part of their overall planning, monitoring and reviewing of the way in which they operate direct payments. In particular a local authority will wish to stress that it cannot help directly with the recruitment of staff (i.e. advertising, interviewing and selection), or get involved with terms or conditions of employment. Local authorities should make individuals aware that user-led support organisations hold details of companies offering appropriate insurance to cover employer's liability.

Seeking repayment

179. The 1968 Act enables local authorities to require some or all of the money they have paid out to be repaid if they are not satisfied that it has been used to secure the services (or purchase the equipment or temporary adaptation) to which it relates. They may also require repayment if the person has not met any condition, which the authority has properly imposed, and those imposed by the regulations. Local authorities which decide to require repayment by someone who they know is also receiving payments from the Independent Living Funds (ILFs) ²⁵ should inform the ILFs as soon as possible and should seek to agree if possible a common approach if the ILFs are also seeking recovery.

180. It is up to the local authority to decide when it is appropriate to seek recovery. However local authorities should bear in mind that this power is intended to enable them to recover money which has been diverted from the purpose for which it was intended, or which has simply not been spent at all. It should not be used to penalise honest mistakes. Local authorities should be satisfied before they start to make direct payments, that people who receive them understand all of the conditions they will be required to meet. Additional conditions should only be imposed insofar as they are necessary to ensure that the objectives of the Executive's policy in relation to direct payments are met and that the local authority's responsibilities (e.g. to monitor the use to which public funds are put) are discharged. Local authorities should take into account hardship considerations in deciding whether to seek repayments. When considering whether to recover unspent funds, local authorities should also bear in mind that there may be legitimate reasons for a recipient to build up an apparent surplus. This might involve outstanding legal liabilities, for example to pay an employee's quarterly PAYE, contingency funds to cover such eventualities as sick leave or to pay outstanding bills from an agency.

181. Local authorities should discuss with individuals, before direct payments begin, the circumstances in which it might wish to consider seeking repayment.

Discontinuing direct payments

182. Local authorities should not automatically assume when problems arise that the solution is to discontinue direct payments. If the local authority does decide to withdraw direct payments then it will need to arrange the relevant services instead, unless the withdrawal was following a reassessment after which it concluded that the services were no longer needed.

183. Either the local authority or the individual may decide at any time that they no longer wish to continue with direct payments. For example direct payments may be discontinued because:

• the local authority is not satisfied that the person's needs are, in fact, being met;
• the person is no longer able to manage direct payments;
• the person no longer requires a service, or
• the local authority has had cause to seek repayment of funds and has reason to fear that further payments may be misspent.

184. Clearly, wherever possible, the decision to discontinue should follow discussion with the individual and any carer, and the local authority should, in any case, keep the individual informed throughout the process. The local authority may also need to keep in touch with the ILFs and share information where appropriate in cases where the individual is also receiving ILFs funding.

185. The local authority should inform people as soon as possible if it is considering discontinuing direct payments, and if appropriate give them an opportunity to demonstrate that they can continue to manage direct payments. Local authorities should set a minimum period of notice, which will normally be given before direct payments are discontinued, and include it in the information to be provided to people who are considering direct payments. It may be necessary in exceptional circumstances to discontinue direct payments without giving notice. For example where a child is the service user and it is clear that his or her welfare is in not being safeguarded. In considering this course of action, local authorities will first need to take account of the individual's contractual responsibilities with a service provider or an employee. They will also have to take into consideration any outstanding financial liabilities the individual may have. Local authorities should explain to people, before they begin to receive direct payments, the circumstances in which they might be discontinued with no notice and discuss with them the implications this has for the arrangements that people might make.

186. There may be circumstances in which the local authority wishes to discontinue direct payments temporarily. For example when a person does not require assistance for a short period because he or she is in hospital, or because his or her condition improves. Similarly when a person is temporarily unable to manage direct payments (perhaps again due to fluctuation in his or her condition or the support available). In these cases, the local authority will need to discuss with the person how best to manage. The aim should be to enable the person to resume responsibility for his or her own services after the interruption, if that remains his or her wish. The local authority might decide to take over the management of the person's arrangements in the interim. In considering whether it is practical, desirable and cost-effective to maintain the person's arrangements, the local authority should bear in mind any contracts into which the person has entered. For example the local authority will not be able to take over a contract with a service provider which is not registered with the Care Commission. Likewise it may not be practicable for the local authority to take over the employment of a personal assistant. The local authority should discuss with the person before starting to make direct payments what could happen in the event that direct payments are discontinued, albeit temporarily.

187. Where direct payments are discontinued, some people may find themselves with ongoing contractual responsibilities or having to terminate contracts for services (including possibly making employees redundant). The local authority will wish to discuss this with people before they begin to receive direct payments and agree how this would be handled. Local authorities should also consider how to recover unspent direct payments if the recipient dies. For example, if someone wishes to pay an agency in advance for its services, the local authority should bear in mind that it may be difficult to recover money paid for services which were not in fact delivered. Local authorities should also consider that before his or her death the recipient might have incurred liabilities, which should legitimately be paid for using the direct payments. For example, he or she received services for which payment had not been made at the time of death. There may also be occasions where additional funding is required to settle liabilities in full.

Complaints procedures

188. Local authorities are required to operate a procedure for considering any representations (including any complaints) which are made to them with respect to the discharge of their functions or about any failure to discharge those functions. People who receive, or consider receiving, direct payments are entitled to have access to this procedure in the same way as anyone else for whom the local authority has a power or a duty to provide a service. It is important to ensure that people are aware of the complaint procedure, particularly when they are informed of a decision they may not welcome. People may make complaints about any action, decision or apparent failing of the local authority, but not about services which they have secured from independent providers (including people they employ directly) using direct payments. People should address any complaints that they have about the services they receive to the service providers. Alternatively, a complaint can be made to the Care Commission about any registered service or, indeed, about the actions of the Care Commission itself. Individuals will have recourse through the Scottish Public Services Ombudsman once all other avenues have been exhausted. Support organisations such as SPAEN or the Independent Living Centres can provide information and advice about how to conduct a complaint.

Resources

189. Direct payments are an alternative to services that would otherwise be arranged by the local authority, so direct payments must be met from within existing overall resources. Direct Payments Scotland is working with four local authorities to carry out a finance action research project to consider how they might manage an increased take up of direct payments from 1 June 2003. In particular the work will focus on how existing budgets can be made more flexible and how a move towards direct payments might affect local authorities fixed resources. The project will conclude in autumn 2003 and the findings will be made available to all local authorities.

Statistical monitoring

190. The Executive will continue to monitor the progress of direct payments on a local authority basis. In particular it will be monitoring whether local authorities are carrying out their duty to offer direct payments to eligible people. Statistical Form F1 will be issued at the end of March each year for this purpose. A copy of the current form can be found in Annex D. Local authorities are advised to make sure that this information is collected throughout the year to ensure that the form can be completed in April each year.

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