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
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."