Direct payments are one policy response to the perceived inflexibility of the care system.  The proponents of Direct Payments argue that giving service users a cash sum with which to buy whatever kind of care and help they want to meet their assessed needs offers a significant degree of user control over the services they get. Thus, they argue, the limited options offered by local authorities or others can be swapped for a much richer blend of service options.

It is undoubtedly true that, for some, direct payments do indeed allow new forms of care to be  obtained. This is  especially helpful for people who are able to act as the employer, conduct interviews, oversee and devise the nature  of the care to be given, and cope with the often considerable turnover of staff.

There are however a number of drawbacks to such schemes and ten are briefly described below.

1. Direct payments emphasise the individual employee / employer relationship between carer and cared for. They turn caring into a cash transaction for contracted actions.

2.  “Pooling” direct payments so that the benefits of collective action can be gained  to “shape the provider market” is made difficult. Provision is therefore available from either:

  • a) individual carers operating as little self employed businesses
  • b) from family members and friends
  • c) from care agencies.

a)  offers reduced resilience in times of illness and holidays; c) merely substitutes a commercial company as the employer of carers instead of the local authority, whilst b) potentially introduces new and difficult dynamics into some family situations that are already under  strain.

3. Direct payments have the potential to casualise the employment of carers and drive down wages, training, and benefits, both when cost becomes a key feature driving choice or when cost impacts on the profit margins of care agencies employing staff. Low hourly rates, zero hours contracts, and payment only for care hours given rather than all hours worked, are all features of the care sector.

4. The level of the payment made is determined by a) the level of assessed need and b) the portion of that need which the local authority deems should be met from paid carers. This is, at best, an imprecise computation to make. At worst, it allows sometimes inexperienced staff to flex the sums set aside for direct payments in order to accommodate budget cuts without being overtly seen to reduce service levels.  Recent reports show that the hourly rates blessed by most local authorities are well below the figure of about £15 per hour needed to ensure good quality care.

5. There is often little consideration of the hourly rate which the user will need to pay in his or her locality to command quality (trained / experienced) care from self employed people whose earnings need to cover pension costs and down time needed for holidays, illness and travelling time. Travelling time can be considerable in rural areas.

6. Direct payments assume that users will be able to acquire the services they need. Yet for some types of quality care in some locations, neither the self employed option  nor the care agency approach provides a consisitent – or indeed any – market response. Monetised “demand” does not lead to “supply”. In such locations, the public sector has to remain the “provider of last resort” – but if the number of direct payments increases cash is  taken out of local authority services the ability to do so is reduced. It is similar to a privatised postal service delivering only to houses in densely populated areas.

7. It is understood that the regulations do not allow direct payment cash to be spent with a local authority so there is no even playing field that allows users to choose a public provider .

8. For direct payments to work to the maximum benefit of the user, the user needs to be in direct control of the employment, training and management of the resources employed. Being the legal employer imposes duties on many people which are incompatible with high levels of disability or stress. (The alternative – using an agency to source carers – often results in a loss of control over workload and continuity of carer.) Thus direct payments are more attractive to the self – assured otherwise fit, rather than to the hesitant and wearied.

9. For users not confident to be the employer of their carer, other bodies now exist to  discharge this function on behalf of the user. This adds another cost tot he service – which comes out of the total care budget, and another relationship for the user to manage.

10. Regulation of the care sector, just like regulation of so many other services and sectors, offers little protection against poor supplier practice which often manifests itself in high staff turnover, or low morale, or both. Regulation adds a further cost to be added to the cost of the formal assessment process and the costs of any employment agency.

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  1. Richard grimes says:

    Very good, if depressing, summary. Here are some more issues

    – Implicit from #1 is that the cared for person has to take on employee responsibilities. For example liabilities for the carer suffering injury at work.

    – For direct payments to allow any kind of personalisation patients must be free to choose to pay for services that would not normally be commissioned. (For example, acupuncture as pain relief.) This will lead to a two tier service where some services will be available to some people, but denied to others.

    #2 is a problem. The effect of direct payments is to make a service individualised, where collective services may be more effective and more cost effective. For example, the closure of day centres and replaced with a direct payment. The whole point of a day centre is that it is a collective service, the benefit received come from people using the centre together.

  2. Martin says:

    Richard have the people at the “day centre” chosen to come together or been placed there or had to choose that because that is what is available? Are day centres really what we aspire to in 2014? Don’t know if you have spent much time in learning disability day centres (I have) – when people are given real alternatives – to work, get education, have leisure in community – they snatch your hand off. Shall we ban direct payments and give people just what we decide is good for them – is that how we see socialism? Come on we can aspire to more than that.

  3. jacky Barfoot says:

    And direct payments are very useful to rural disabled who have no family nor friends to help them and they need to pay already for services such as taxi fare, someone to garden and repair their homes and someone to come in and clean for them, Ib this sense direct payments make sense when they are struggling to pay for these services out of savings or benefits alone

  4. jacky Barfoot says:

    when your a chronic pain patient with spinal problems in yoour 40s and there are no day services nor centres for your condition and you need someone to take you shopping or out socialising or even to access cab or local services you welcome such support to employ someone local who has no work to work for you –

  5. jenny morris says:

    Direct payments are more than “one policy response to the perceived inflexibilities of the care system”. They were developed by people who were institutionalised and denied their human rights and it’s important we understand the history before condemning something that has made such a difference to many disabled people’s lives. At the same time, it is certainly true that governments, local authorities and some professionals have put barriers in the way of the original vision of what direct payments could achieve – see

    The history of the Independent Living Fund is also relevant as ILF grants are another form of direct payment which has made and continues to make a major difference to people’s lives (including the largest group of ILF users – people with significant cognitive impairments). See – particularly the last section which suggests there are better ways of delivering disabled people’s human and civil rights (if only we had a socialist government that would seriously consider this!).

    One more point – much of the criticism concerning the use of agencies also applies to situations where people receive services organised by their local authorities because many local authorities rely on agencies themselves. It isn’t direct payments that created the reliance of the social care sector on profit-making organisations but the ‘purchaser-provider’ split brought in following the NHS and Community Care Act 1990.

  6. jane says:

    Direct payments have given me the freedom to choose carers to look after my severely disabled son and I have appreciated this freedom. However,now that the council are cracking down on how the money is spent, I am compelled to register every carer and account for every penny, i find that this freedom is being curtailed. I used to sometimes use friends and neighbours to do things we needed doing to make life easier, sometimes to give me the time to do my son’s care, especially if he is ill. Now I can only use people i have ‘registered’ as my employees, which formalises a family situation which I liked to keep informal – while I hope treating carers well.
    Not only that, but there is one carer who has a particular relationship of long standing, who travels a very long way to get to us, and who, having already a low paid job and benefits for a young family, cannot afford to work for us if he has to declare the work. Not only that but it seems I am no longer allowed to pay him for petrol for his 60 mile round trip. It seems to me that the government are closing in on the freedom we had with this not inconsiderable sum of money, and this is changing the way we operate as a family and the relationships we had with carers, who quite honestly have had to more or less become part of our family. I don’t know the answers, but this is our experience, and it is making life more difficult. So while I certainly appreciate having direct payments, if they legislate it much more, they will be virtually taking the freedom back. On the other hand, we really appreciate being able to choose our own carers, and would absolutely hate to have to use an agency..
    In addition to this, my son ironically has to pay £50 a week back out of his DLA to the same council as gives the money on the grounds of what they call ‘Fairer Charging’. ‘Fairer Charging’, ‘In Control’ and ‘My life My choice’ are all the mocking words they use to mean Unfair Grasping Back, Not in control anymore and My life Not Much Choice!

  7. jax67 says:

    I cannot afford to pay anyone to help me at all, not getting dla nor direct payments, I have had to use my pension fund to pay for gardening, handymen, taxi fare to go shopping, so now got no pension when i retire, now got to sell the house to pay for help etc, as in debt and becoming house bound due to it all, wish I could employ a friend whos a gardener, he has to work for peanuts at the moment in the week on workfare. I wish i could pay a lady in the village to do my washing and ironing for me but I cant, she’s self employed taking peoples washing in. wish i could employ a driver to take me out places, but i cant, I used to spend £60pw on taxi fare to go out and shopping, now i go out from home one day a week and thats it. fed up of living like this with spinal degeneration and in 24/7 pain. wish someone would bring a fairer policy out where we get a decent living wage as disabled people so as to support ourselves and afford help

  8. Mina says:

    Direct payment gives you control on how you spend your money but what happens when your money runs out you need more treatment like Chemo?
    Can you ask for more money to pay for extra treatments? I can smell a rat-

  9. Roger Pratt says:

    We have a 24/7, 1:1 service under direct payments for our daughter. We were taken to an employment tribunal in 2016. Claim for unfair dismissal while on maternity leave (surrogate pregnancy). Claim for £30k including £7k for ‘injury to feelings’. Claim dismissed. Claimant is a co-director in a care agency. I have written a report.

  10. Jackie says:

    My mom is terminally ill she lives with myself her house is standing empty . There using her house has cash valve . I have not got time to sell it for moms care . Will this be turned down

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