Money management - Paying for in-house services with a direct payment

The Care Act Guidance describes how direct payment users can purchase, on a one-off basis, Council 'in-house' provision, such as Day Care Centres.


The Care Act Guidance encourages flexible use of direct payments, as long as they are being used to meet needs. This can include using a direct payment to pay for in-house services, if available locally.



What are the outcomes we want to achieve?

  • People in receipt of direct payments understand how to access short-term in- house support, how much they will be charged and how their contribution will be processed
  • The process for accessing in house support is simple and carries the minimum amount of back-office processes required
  • People are supported to review their care and support needs where appropriate


What tools and resources do we need to do a good job? What are the steps we have to go through?

  • Clear policy permitting existing direct payment (DP) recipients to purchase short periods of support from in-house services
  • User facing information explaining the process which DP recipients can use to book short term support from in-house services
  • Agreed minimum bureaucratic process for charging DP recipients - by default this may be best achieved by adjusting future DP payments
  • Alternative process for collecting (or waiving) contributions from DP recipients where the default process is not appropriate - e.g. in circumstances where people are accessing in-house support following a breakdown in care, or where deducting money from a future payment would leave the person unable to procure adequate care and support for themselves


What are the products we will have at the end of this process?

  • Simple spot purchase agreements with direct payment (DP) user
  • Invoice for care purchased outlining collection process
  • Adjusted future DP payment / alternative agreed approach to user contribution for the use of in-house provision
  • Updated DP account statement
  • Support plan review where requested / where purchase indicates a significant change in need or circumstances


When does this process start and end and within what timescales should this process be completed?

  • Spot purchases of in house services should be accessible to direct payment (DP) recipients with minimum notice if required
  • Agreed contribution and approach to collecting (or waiving) the contribution should be completed before the next DP payment cycle
  • Updated DP accounts and account statement should accompany the next payment cycle


Who needs to be involved and what is their role? Who is taking the lead?

  • Brokerage team
  • Financial assessment team
  • Support planning assistance - where appropriate


The question of whether a direct payment can be spent on Council services is a relatively complex legal question. It involves consideration of the Localism Act, the Local authorities Goods and Services Act and the provision of chargeable discretionary services to capacitated people or their authorised agents with power to agree contract. Legal advice is needed on a local level.


The main solution has always been to say that 'that bit' of a personal budget (for an in-house service) cannot be given as a direct payment, but then to work out the cost of the in-house service pro-rata and deduct that from the PB as the services are used. However, council flexibility is important. If a person can have a DP and use that payment to purchase a day service place on an infrequent basis then there are efficiencies in process and reductions in bureaucracy that are possible and the likelihood of better outcomes.


Posted on by Old Site User

It is inefficient to make Direct Payments to a person so that they can purchase an in-house service as the council then has to send them an invoice for the service to be paid from the money we gave them. It is more efficient to provide an in-house service direct. The person may still have additional funding through a DP for other needs to be met and the two costs would total the sum of the personal budget.

Posted on by Old Site User

You are quite right. At the end of the day the council is invoicing for money they have paid out. But to pursue this a little further if a person has a DP, and on a one-off basis would like to use a day care centre, being able to purchase that place without a lengthy council referral and invoicing process would be an them. The question seems to be, is there a way in which this can be achieved without the bureaucracy? Perhaps using an electronic marketplace for example?

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