Direct Payments and care homes

One of the questions being considered for inclusion in next Spring’s social care White Paper is whether people should be able to use Direct Payments to pay for residential care, which at the moment is unlawful. The personalisation group of the White Paper engagement team is leading on this issue, so I’m very much writing about this with my own views, not in any way as co-lead of the prevention group.

My understanding of the rationale for excluding residential care users from Direct Payments, was that people may have been encouraged to buy the same old thing they were being offered before, which would not then amount to a radical change in the choice of provision out there. I’ve written a number of times about the ways in which the state and professionals have proved adept at assimilating the mechanisms of personalisation into their existing world view; I’m sure that having the option of transferring residential care users onto Direct Payments would have added to that problem.

I’m equally sure that the two-tier system which has resulted, with people who continue to use residential care excluded from one of the key aspects of personalisation cannot continue. It just doesn’t feel fair that I should lose a key route to choice and control when I move from receiving home care to a care home. However, I’m equally sure that opening up Direct Payments won’t by itself transform residential care. It will need to be part of re-thinking how care homes work. Community Care’s recent article on care provider Dimensions, which attempted to introduce more choice and control in one of its care homes, shows that addressing staff expectations and practice was more important than introducing an individual service fund approach to personal budgets.

It’s also worth noting that older people have been spending their own money on care homes for years, without the private care homes market establishing a reputation for forging ahead on choice, quality and value. As the Southern Cross debacle demonstrated, being an individual consumer of the product of an uncompetitive industry is not a very empowered place to be.

A colleague objected to a recent tweet in which I asked whether introducing Direct Payments for over and under 65s who use care homes would have very different connotations. He felt the suggestion was ageist and played to assumptions that older people don’t want choice and control, which of course they do. The difference I was interested in is not in the intended outcomes or in people’s ability to use Direct Payments. I think that personalisation within every care setting and for every age group is a given, and that, with the right support, there is no reason that Direct Payments shouldn’t become an equally important part of achieving choice and control for older people and their families, as for working age adults.

But if we’ve learnt one thing from the personalisation reforms, it’s that there’s no point in trying to reformat the demand for a service without also reformatting the supply. The market of care home provision for working age adults is nearly entirely used by people who are funded by the state, whereas the market for older people’s care homes is split between state-funded provision and privately purchased provision, with the latter the only area of growth in the market, whilst the former sees increasing numbers of providers go out of business as the margins become ever-more unworkable. It’s not unusual for one care home to house older people using their own money to buy care at one price, alongside people who are receiving care block-purchased by the council at a lower price. What would happen if the latter group suddenly became individual consumers, but with less money to spend than people who were already ‘self-funders’? 

Some of the most interesting developments in the use of Direct Payments seem to me to be those where people form small groups to purchase collectively. As a group you have much more chance to shape care, acting more like a commissioner than just an individual consumer. I’ve blogged below about what might have happened if a few thousand of Southern Cross’s users or their families had formed a user group, or even a buying co-operative. A group wielding that amount of purchasing power (Southern Cross’s users gave it and its shareholders around £600m per year to play with), might even opt to buy something very different from residential care, or to work with providers to create new kinds of support and accommodation.

I think there is a growing consensus that excluding care home users from Direct Payments is not sustainable. But I hope that the transition period is thought about very carefully and I suspect that introducing collective purchasing should be a part of that. And whatever happens to the way the money is managed, the kind of basic choice and control Dimensions, Anchor and others have started to introduce should be non-negotiable.

5 thoughts on “Direct Payments and care homes

  1. Liam December 19, 2011 / 12:25 pm

    Alex, I’m trying to understand this personalisation debate and I wanted to know exactly what this means…’The rationale for excluding residential care users from Direct Payments was that it would have reduced the potential for Direct Payments to be positively disruptive: people may have been encouraged to buy the same old thing they were being offered before’…

    Does that mean that there is a preference already laid down within the personalisation / direct payments approach where people are encouraged to change their current situation? I mean, if someone were in a care home where they had friendships built up over time, they might most certainly want to maintain that situation. Is this new plan going to encourage them actively to change their situation for the sake of changing it?


    • alexfoxblog December 19, 2011 / 12:50 pm

      Hi Liam – good point – i think that some people’s experiences of changes brought in under the label of ‘personalisation’ has at times been that they are encouraged not to retain the same service, even if that’s the service they prefer. There is an argument about to what extent all of those choices are based on having been given a wide range of options, but I agree with the drift of your point as i hear it, which is that people should have the choice to receive something new, or to retain the same service. When Direct Payments were first introduced, though, I can see how it might have been felt that if people only used them to purchase residential care, rather than being encouraged to purchase supported living etc, than that might not have amounted to a very radical increase in choice of service provision. That’s only my interpretation of it though – and i’ll edit the blog to make that clearer!

  2. Lucy December 19, 2011 / 1:04 pm

    I have reservations about extending direct payments to residential care. I am less convinced the benefits will be the same as for people who receive services in their own home. As somebody who has worked in home care, I know that people who paid using direct payments were treated with greater care than people whose care was purchased directly by the LA, precisely because we knew that they could easily take their custom elsewhere. This is less true in residential care, where residents would have to go through the disruption of moving to a different home, and where there is simply less choice at the supply side. For those people who are able to use direct payments to employ personal assistants, there have been many benefits; they are able to choose who supports them and how (see Janet Leece’s excellent research on this); it inverts traditional power imbalances between care workers and service users. Again, this doesn’t apply in residential care, at least not until the market begins to recognise that people want more choice over the individuals who support them, rather than the ‘brand’ of the provider. A lot of the logic of direct payments to a person living in their own home wouldn’t apply in residential care.

    A second issue that concerns me as a legal researcher is the loss of protection of the Human Rights Act (HRA), and wider questions around liability. Currently the HRA only applies to private care providers where care is arranged under the National Assistance Act 1948. Care purchased with a direct payment is functionally private, and so does not attract the benefit of the HRA. Furthermore, it is less clear that the local authority themselves could be liable for human rights violations if they are not directly contracting with the provider. Where people have capacity and are confident and capable in setting up their own care, they may be more able to navigate and assume these risks. Where care is arranged under direct payments by a third party (say a carer) if the care package is unsuitable, if a person’s human rights are violated, it is very unclear who is liable. My concern is that if direct payments are used to purchase residential care for people with limited mental capacity, the people purchasing the services are not the same people as those assuming the risks. This is already a problem for privately purchased care; in my view, the solution may be to extend the HRA to all private care providers. Interestingly enough, our current minister for social care Paul Burstow once proposed this; I wonder if he would consider this again now?

  3. Kevin January 11, 2012 / 11:27 am

    Through a Freedom of Information request looks at the number of people in support of direct payments / personnel budges and the investment and SROI in London, refer for analysis and further information.

    London Councils own data can be found to support the above information. Also used in the analysis was which collects the data and is presented through its RAP SD1 & SD3 codes.

    Furthermore I recently had to answer and submit (has been updated/corrected in wording):

    If 725,000 people were in receipt of HRC (DLA), 424,000 receive community support, why then just 20,600 in support through the ILF for 2010/11 ? based upon the figures collected from NASCIS for 2010/11 some 113,520 would have received direct payments and some 424,555 in community support.

    I have enclosed the direct links were available and have summarized the 3 main numbers for use.

    My suggestion is based on the 3 facts from the DWP/NHS/ILF of which

    HRC – DLA (May 2010) = 725,500 people

    310,855 (2010/11) + 62,680 Direct Payment support = 373,715 plus 12,845 ( 2009/2010) (2010/11 figures not available) + 37995 Direct Payment Support = 50,840

    (373,715 + 50,840 = 424,555)

    The no. of people supported by the ILF (2010/11) = 20,600 (and that to access the ILF one must meet the criteria of HRC + £340pw of social services support then……ILF).

    Of which the Freedom of Information request to the London Councils and it own data share statistics found in London about 30,000 (2010/11) were in receipt of direct payments. From my findings DWP (could be UK), NASCIS (would say is England & Wales as Scotland & N. Ireland collect it own data) same as ILF (NI & S should be added on to the overall today) will try and resource these today, as I don’t have them to mind/hand.


    DWP Website – use instead. (
    NASCIS website – RAP code SD1 & SD3 (
    ILF – as per previous attached FOI response by the ILF
    TCell and

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.