Direct Payments and Individual Budgets: Managing the Finances
FOREWORD People with social care needs are increasingly demanding greater levels of choice and control than local authorities have traditionally offered. In this context it is particularly important that local authorities take stock of their administrative and financial processes to ensure that the money available in the social care system is used to greatest effect in meeting people’s needs and adding value to their lives, and that administrative processes are efficient and fit for purpose. Currently there is much activity in this field. The Office for Disability Issues is striving to take forward recommendations from Improving the Life Chances of Disabled People (2005) to implement a Centre for Independent Living in every authority by 2010. There is a programme of activity under way to increase the take-up of Direct Payments and at the same time there are 13 pilot authorities across England funded by the Department of Health to pilot Individual Budgets. An evaluation of this pilot programme is due to report to ministers by March 2008; however, the direction of travel towards the personalisation of social care seems to be beyond doubt. “I don’t think there is any doubt that a combination of individual budgets and personalisation of services is going to be the key component of a modern social care system. I don’t want there being any ambiguity or doubt about that.”
Ivan Lewis MP, Parliamentary Under Secretary of State for the Department of Health, quoted in The Guardian, October 18 2006
Many local authorities are using other means to take forward this agenda. Well over half the authorities in England are subscribers to in Control, an independent organisation devoted to the wide-scale implementation of Individual Budgets. The scale of the work being carried out in in Control member authorities varies significantly but there are up to 20 authorities at the time of writing that are aiming to implement Individual Budgets across all adults’ services within the next two to three years. The policy drivers for this new impetus are clear enough. Direct Payments and Individual Budgets feature strongly in the 2005 White Paper Our Health, Our Care, Our Say, in Improving the Life Chances of Disabled People and in Opportunity Age, and the drive towards personalisation importantly also enjoys strong cross-party political support. Coupled with this activity, concerns have been expressed in some government circles at the very limited impact that Direct Payments have had on the shape of social services over the last 10 years since their implementation. Although the number of Direct Payments doubled in 2004/05 from the previous year, the Commission for Social Care Inspection (CSCI) reports that a mere £1 in every £100 of social care spending goes on Direct Payments, nearly nine times less than the sum spent on assessment and care management in the same period. There is a challenge then to re-engineer or modify the way which social care systems operate to enable a shift in the use of resources towards supporting the majority of people to take control over their arrangements rather than just a minority, and to do so in more efficient ways, with less intrusion into people’s lives. The early evidence from some Individual Budgets and in Control sites seems to reflect the experience of Direct Payments users, showing that people who are supported to
direct their own care can achieve better quality outcomes without putting additional strains on budgets. Coupled with this evidence is the potential for those authorities willing to adopt Individual Budgets as a whole system for delivering social care to generate much greater efficiencies from streamlining current administrative and monitoring processes. For these efficiencies to be realised, it is important for authorities to reach a single approach towards self-directed support which can cover Direct Payment and Individual Budget arrangements. The environment then is clearly in a state of rapid evolution, and some provider organisations have already begun to re-orientate themselves to the challenges thrown up by individuals acting to commission their own care, and from the need to offer more flexible services focused around achieving a set of bespoke outcomes designed by the service user. For local authorities, the changes required to support a roll-out of such an approach will be even more significant. There are significant challenges to current commissioning practice, to the role of front-line social care staff and to financial management and accounting practices. Most of those who are piloting this new approach are doing so whilst continuing to operate their normal care management and accounting practices. A few, such as Oldham, have fully embraced Individual Budgets as their core business model for adult social care. This guidance aims to reflect the emerging environment and provide some early advice to local authorities that wish to tackle some of the financial issues involved in extending Direct Payments, or developing Individual Budgets or in Control schemes. Richard Harbord Chair, CIPFA Social Care Panel