Can an LA force direct payment budget holders to use a managed account?

Legislation & Guidance
1

I hold a budget on behalf of my disabled son. The LA refuse to pay the DP into an account I control. They insist I must use a managed account. As far as I am aware this is contrary to legislation and statutory guidance. Does anyone here have a view? I understand you’re not giving legal advice, I just want an opinion. I’m not going to rely on it.

Also, if anyone here does receive a direct payment into an account in their own name that they control, please let me know, especially if you live in Moray.

2

Hi Josh, welcome to the SDS Forum.

@margaret.petherbridg I’m wondering if you can offer any advice please?

I’ve also invited Moray Wellbeing Hub to join the discussion in case they can offer any local insights. They support people in Moray with SDS advice - if you’ve not been in contact with them yet you can find their details at https://moraywellbeinghub.org.uk/

Thanks,
Kayleigh

3

Thanks, I’m aware of MWH. It’s a good idea. They may know of others having similar difficulties.

4

Hi Kayleigh

Apologies for the delay.

I can’t offer advice for something in an other area when I don’t know the details. There could be a number of reasons for this. The best advice I can give is to go back to the LA to discuss.

5

One reason is if I lack capacity to manage an account. They haven’t given that as a reason. I have been given the following reasons:

  1. To protect me from the responsibility (and liability) of making sure an employee auto-enrols on a pension scheme.

  2. They do not, as a matter policy, allow people who employ a PA to have an unmanaged account.

1 Like
6

LA in our situation has forced us into managed account. It means,that only agreed purchases can be
drawn from the account. (Paying support staff wages,
and that´s about all) Anything else one tries to use it for the bank refuses to do so. I tried to pay for stationery, since a run a DP office with various expenses needed in connection DP requires. It was not possible.
LA is also taking automatically/ regurarly from the DP account so called unspent money. They are giving with one hand and taking with another.
I trued to raise the issue, but got nowhere with my complaint.

7

Many thanks. Sounds very similar to my case. Have you explicitly requested the LA give you a cash payment?

8

No, I have not requested the LA to give me a xash payment. I would not have thought it was possible.

9

“Supported persons have a legal right to request a cash payment (Direct Payment) to meet their assessed need under the 2013 Act, and is often referred to as SDS (Option 1).”

That is from page 58 of the Statutory Guidance to the Social Care (Self-Directed Support) (Scotland) Act 2013. The LA can only refuse under very limited circumstances, for example if you lack capacity to manage a direct payment. I don’t know what the exact interpretation of ‘cash payment’ but it seems pretty clear it’s putting money under your control. I am considering taking my case to court but I’m running out of time and may not manage it. A joint action with others might be worth looking into if others are having the exact same issue.

10

Interesting - what you said.
It is definitely a managed account what we have.
I can tell the difference, as i have organised my daughter’s care package for over 22 years. I know what we had before and what we have now. LA ‘s criteria and rules have changed. In the past we had access to the bank account which was on my name. The big change came just before pandemic I had to sign a document where all the funds my daughter receives were trasferred a different bank account of LA’s choice. I had to transfer the funds to Prepaid financial services. This bank account is controlled by LA They withdrawing unspent money every months. I can only pay my designated support staff which is repetitive any other purchases are stopped and blocked.
(Before the change i had access to the bank account of my choice) LA carried out an audit every six months. I used to submitt bank accounts and time sheets and all receipts. It was a lot of admin. for me.
Do not quite understand what cash payment is?
The money is not under my control. It is a gimmick on LA’s part which visually looks it is under my control, but it is not.
I would also be interested to know the criteria if a member of family who lives in the same household as the cared for person can be paid from DP? I had some communication from SDS forum about it but I cannot find it.
Many thanks
Suzanne

11

When you say you ‘had to sign’ a document, under threat of what? The package being withdrawn?

Which LA was this?

12

Regarding paying family members, this can be allowed under some circumstances I think. There’s a section on it in the statutory guidance. You can get the current (2022) version of the guidance here:

It’s well worth a read. It’s more than ‘just guidance’. Local authorities should follow it. Beware the old version (2014) of the guidance is still knocking about in several places.

13

Regarding payments to ‘third parties’, which I think includes managed account services (after all, they’re not the first, second or fourth party), check out the 2014 Regulations (which LA’s MUST follow):

https://www.legislation.gov.uk/ssi/2014/25/regulation/5/made

Section 5 says:

"Third party direct payments
5. A local authority may pay all or part of a direct payment to a person other than the direct payment user (a “third party”) if—

(a)the direct payment user asks the local authority to make the payment to the third party; and
(b)the local authority is satisfied that the direct payment user retains total control over how the direct payment is spent."

This sets out two conditions, BOTH of which must apply before the LA can lawfully pay the DP to a third party. If you did not ask the LA to pay the DP to a third party, then the LA may not do so. It’s absolutely clear. This isn’t legal advice by the way, you’re not paying me and I’m just a random internet guy. Don’t listen to me. Further, it sounds as if you don’t have control over how your DP is spent and the LA knows this. If so, the second requirement is likely not met either. But that doesn’t matter, the main thing is that the first requirement is not met: you didn’t ask for it. If you did, you can change your mind, just tell them and ask for it to be paid to you. That’s what I did and my LA refused. Again, this isn’t legal advice. Consult a lawyer, who may not know the law. You could ask SDS Scotland but they won’t tell you either, even though it’s written in black and white in the primary legislation, secondary legislation and statutory guidance. This aversion to actually talking about the law I find very frustrating.

14

I signed the docunent when the transfer of funds was made from my chosen bank account to LA chosen bank account. I had to agree there was no choice. They did not apply threats, but it was absolutely clear that funds would not continue into my bank account.
It is Aberdeen city council
We live in Aberdeen. I am looking after my daughter with severe epilepsy, learning disability and cerebral palsy. —24/7 job.
We have a reasonable pacjage, but due to lack of staff unsoebt money goes back to LA
During the pandemic accumulated funds went back Thousands of £££££
I had no help for 3 years!

15

There are rules about LAs taking money back. A process will need to be followed. Pg 57 of the Staututory Guidance says:

"Underspent Budgets and Seeking Repayment

Where Local Authorities or Health and Social Care Partnerships have concerns about underspend of
allocated budgets, these should be reconciled in line with local contractual arrangements only after
efforts have been made to establish – with the supported person, unpaid carer and the social worker –
the reasons for the underspend.107

To ensure reconciliation is done accurately and transparently, providers and Direct Payment holders
should keep a record of decisions made (for example, deployment of staff, additional costs incurred)
with a transparent and clear link to individual care plans (or adult carer support plans or young carer
statements).

All unspent funds in Direct Payment accounts should be returned to the Local Authority or Health and
Social Care Partnerships in the usual way. It is acknowledged that Local Authorities or Health and Social

Care Partnerships may have made local arrangements with providers about reconciling unspent funds,
and this SDS guidance is not intended to cut across those arrangements.

Seeking repayment of direct payment funds

Depending on the circumstances surrounding any decision to terminate a direct payment, the authority
may need to decide if it is appropriate and proportionate to seek recovery of unspent funds. Any such
effort should include the social worker and should not be undertaken without clear communication
and discussion with the supported person and/or their representatives, and potentially a review or
reassessment which can consider whether any part of the unspent resource can help achieve their
outcomes in a different way.

The authority should also consider how to recover unspent budget if the recipient dies, including the
possibility that before their death the supported person might have incurred liabilities or received
services which should legitimately be paid for using the budget. There may also be occasions where
additional funding is required to settle liabilities in full.

In addition, the 2013 Act enables the authority to require some or all of the money they have paid out to
be repaid if the authority is not satisfied that it has been used to secure the support to which it relates.

The authority may also require repayment if the person has not met any condition which the authority
has properly imposed or have been imposed by the regulations. The authority should take into account
hardship considerations in deciding whether to seek repayments."

16

The LA I work in (Perth & Kinross) is talking about introducing prepaid accounts for direct payments, so this is very useful info to help anticipate this change. Will managed accounts be the standard model moving forwards, I wonder?

17

That’s interesting, thanks. Do Perth and Kinross currently ‘allow’ people to have their DP paid into unmanaged accounts, i.e. accounts set up by the service user in the service user’s name?

Depends what you mean by ‘standard model’. If you mean what LAs typically do, I don’t know, but from what I’m hearing it seems like it may well be. I know in England councils try to get people on pre-paid cards. In Scotland the Statutory Guidance saw fit to have a whole section on pre-paid cards, the first sentence of which is a reminder that people have a right to request a cash payment. As far as I can tell the LA may only refuse that request on specific defined grounds, for example, if a person lacks capacity. As far as I can tell if those grounds do not apply, then the LA MUST grant the request.

18

Yes, currently there is no pre-paid service operating in Perth and Kinross, as far as I am aware, and all direct payments are made to personal bank accounts in the service user’s name (or the person with responsibility).

19

UPDATE: I took legal action (Judicial Review) against Moray Council. I represented myself as I could not get legal aid. I asked for the DP to be paid into an account I control, and for Moray Council to agree that they got the law wrong. They agreed on both counts out of court. So that’s official at least in Moray:

You can have a direct payment into an account set up by you, in your name, in your full control if that’s what you want, including if you are an employer.

I can supply evidence of this on request. If anyone is having similar difficulties I may be able to help.

1 Like
20

Thanks for this Josh, and well done for fighting for what you think is the best thing for you and your family.

I did an FOI to Perth & Kinross Council about this and they advised that “as part of the 2020/2021 budget setting process, the Perth & Kinross Health & Social Care Partnership approved the introduction of prepaid cards for Direct Payments. It was anticipated that these cards would replace the four-weekly payments made to people’s nominated bank account to allow them to purchase their assessed care and support services. However, as part of the procurement process in late 2021, the tender process collapsed, and no tender was awarded. As a result, Perth & Kinross Council have not implemented prepaid cards for Direct Payments and continue with previous audit and monitoring processes.”