Date of Resource: April 2015 Page 1 of 9 Learning Aims The learning aims of this legal briefing are to enable you to understand: 1 What a personal budget is and in what circumstances a local authority in England ( LA ) may be required to provide one; 2 The scope of direct payments for special educational provision; 3 The limitations on direct payments; and 4 How direct payments are intended to work. Level: Introductory 1. Introduction The development of personal budgets and direct payments are a significant feature of the Children and Families Act 2014 ( the Act ). The stated aim is to increase the involvement and control parents and young people have over the way provision is made for special educational needs ( SEN ) and disabilities. References in this learning text to sections are to sections of the Act unless otherwise stated. Direct payments have existed in adult social care for about 15 years and in children s social care for about five years From April 2014, everyone receiving NHS Continuing Healthcare (including children s continuing care) has the right to ask for a personal health budget, including a direct payment. It has always been possible for local authorities to use a form of direct payment to reimburse parents for home to school transport costs. The new element brought in by the Act is the concept of personal budgets in relation to the provision in EHC Plans and the possibility of direct payments for special educational provision in an EHC Plan. 2. Law Statute: Section 49 of the Act deals with personal budgets and direct payments.
Page 2 of 9 Regulation The Special Educational Needs (Personal Budgets) Regulations 2014 deal with personal budgets and direct payments ( the DP Regs ). DP Reg 6 outlines the conditions which the LA must be satisfied are met before making a direct payment; DP Reg 9 requires written permission from the early years provider, school or post 16 institution before a direct payment can be made for goods and services to be used or provided there; DP Reg 10 covers the amount of a direct payment. The Special Educational Needs and Disability Regulations 2014 ( the SEN Regs ): SEN Reg 12 (1) (j) provides that where any special educational provision is to be secured by a direct payment, the special educational needs and outcomes to be met by the direct payment must be set out in a separate section (J) of the EHC Plan; Paragraph 19 of Schedule 2 to the SEN Regs contains the requirement that the local offer must contain information about the availability of personal budgets. The National Health Service (Direct Payments) Regulations 2013 as amended by the National Health Service (Direct Payments) (Amendment) Regulations 2013 deal with direct payments for healthcare. The Community Care, services for carers and children s services (Direct Payments) (England) Regulations 2009 deal with direct payments for social care. 3. Guidance The SEN and Disability Code of Practice 2015 (the Code ) Chapter 9, paragraphs 9.95 to 9.124 deal with personal budgets and direct payments and include information about not only direct payments for special educational provision but also health care direct payments and social care direct payments. 4. Definitions First it is important to distinguish between what is meant by a personal budget and a direct payment they are different concepts.
Page 3 of 9 A local authority prepares a personal budget (i.e. a budget that is personal to a particular child or young person with SEN) if it identifies a notional amount as available to secure provision that is specified, or which is proposed to be specified in an EHC Plan. This is with a view to the child s parent or the young person being involved in securing the provision (section 49 (2)). It is not an actual sum of potential cash that a parent or young person could expect to be paid out at any time. The Code envisages (at paragraph 9.102) that the local authority may make indicative figures available during the discussions about a draft EHC plan. The Code also (at paragraph 9.106) contemplates that it may not be possible in a particular case for the local authority to identify a sum of money because they cannot disaggregate (i.e. separate out) the funding for a particular service. However, where the local authority is able to identify the amount available to secure provision in a Plan, the possibility will then arise that a direct payment could be made. Direct payments are only one aspect of the delivery of a personal budget. Paragraph 9.101 of the Code advises that there are four ways a personal budget can be delivered: Direct payments where individuals receive the cash to contract, purchase and manage services themselves; An arrangement whereby the local authority, school or college holds the funds and commissions the support specified in the plan (these are sometimes called notional budgets); Third party arrangements where funds (direct payments) are paid to and managed by an individual or organisation on behalf of the child s parent or the young person; A combination of the above Direct payments are payments representing all or part of a personal budget to be made to a child s parent or to a young person (or a person of prescribed description in prescribed circumstances) in order to secure the provision to which the budget relates (section 49 (3) (d)). In other words, direct payments are payments in lieu of goods or services to be provided. The DP Regs deal with what goods and services can be the subject of a direct payment and how such direct payments work as will be dealt with below. Information about the availability of personal budgets must be contained in the local offer this is a statutory obligation from the SEN Regs (SEN Regs Paragraph 19 of Schedule 2). There is also guidance in the Code about what
Page 4 of 9 this information should include in paragraph 9.96 and the Code recommends that such information goes across education, health and social care. It also advises that LAs include clear and simple statements of eligibility criteria and the decision-making processes. 5. Requesting Direct Payments Section 49 (1) says that a local authority that maintains an EHC Plan or is securing the preparation of an EHC Plan for a child or young person must prepare a personal budget for him or her if asked to do so by the child s parent or the young person. Personal budgets are optional. If the child s parent or young person does not ask for one, then they do not have to be provided and it may well be that for some this will be something they are not interested in at all. If however the parent of a child with SEN or a young person does want to investigate the possibility of direct payments the first step will be to ask for a personal budget to be prepared and asking for which services a direct payment option is available. There are specific time periods when such a request can be made set out in DP Reg 4 which are: at any time during the period in which a draft EHC Plan is being prepared in accordance with section 38; and at any time during the period in which an EHC Plan is being reviewed or re-assessed under section 44. DP Reg 3 sets out the information, advice and support which the local authority must provide: the provision for which a personal budget may be available; details of organisations that provide advice and assistance in connection with personal budgets; and the conditions which must be met before direct payments can be made. 6. Limitations First, as mentioned above, before direct payments can even be considered, the local authority must be able to identify the amount of money the personal budget required to deliver the provision in the EHC Plan. Secondly, there are four matters set out in DP Reg 6 (1) on which a local authority must be satisfied before deciding to make direct payments essentially reasons why a local authority could refuse:
Page 5 of 9 DP Reg. 6 (1) A local authority may only make direct payments where a request has been made for direct payments to be made and the authority is satisfied that (a) the recipient will use them to sure the agreed provision in the appropriate way; (b) where the recipient is the child s parent or a nominee, that person will act in the best interests of the child or young person when securing the proposed agreed provision; (c) the direct payments will not have an adverse impact on other services which the local authority provides or arranges for children and young people with an EHC plan which the authority maintains; and, (d) securing the agreed provision by means of direct payments is compatible with an efficient use of the authority s resources. Thirdly, DP Reg 6 (2) provides: DP Reg 6 (2) (2) A local authority may only make direct payments in respect of the special educational provision specified in an EHC plan, and may not make direct payments for the purpose of funding a place at a school or post-16 institution. This means that the type of direct payments envisaged relates to the special educational provision specified in the EHC Plan. It cannot be used simply to meet placement costs. Finally and perhaps most critically, the early years provider, school or post 16 institution where the child or young person is placed can veto direct payments: written consent must be obtained from the head teacher or principal of the named school or other institution before direct payments can be made (DP Reg 9). This applies where the direct payment is in respect of goods or services to be used or provided in the school/institution: DP Reg 9 - Permission of school etc (1) A local authority may not make direct payments in respect of any goods or services which are to be used or provided in a school or post-16 institution without the written consent of the head teacher, principal or the person occupying an equivalent position. (2) A local authority may not make direct payments in respect of any goods or services which are to be used or provided on premises where relevant early years education is provided without the written consent of the provider of the relevant early years education.
Page 6 of 9 Where agreement cannot be reached about direct payments, the Code advises LAs to continue working with parents or young people to find alternatives, such as the school/institution holding a notional budget with a view to involving the child's parent or the young person in securing the provision (paragraph 9.105) Paragraph 9.105 of the Code: 105. Where agreement cannot be reached, with the early years setting, school or college. they should continue to work with the child's parent or young person and the school, college or early years setting to explore other opportunities for the personalisation of provision in the EHC plan. Local authorities may wish to discuss the potential for arrangements whereby the local authority, the early years setting, school or college, holds a notional budget with a view to involving the child's parent or the young person in securing the provision If the local authority does refuse to make direct payments, DP Reg. 9 requires the local authority to inform the parent or young person of its decision in writing, giving reasons. The parent or young person has a right to a formal review of the decision but there are no independent means (such as via for instance an independent appeal panel or the Tribunal) to challenge decisions made by an LA in relation to personal budgets or direct payments. Parents or young people might be able to go to judicial review or ask the local government ombudsman to look at the decision and how it was reached. 7. About the Recipients of Direct Payments SEN direct payments are made only in relation to a child or young person who has or is about to have an EHC Plan. The payments are made to the parent of the child or to the young person or to a nominee (DP Reg 5 (1)). This is subject to DP Reg 5 (2) which requires that direct payments are only made to a recipient if the person: appears to the local authority to be capable of managing direct payments without assistance or with such assistance as may be available to them; is over compulsory school age (where the recipient is an individual); does not lack capacity within the meaning of the Mental Capacity Act 2005 to consent to the making of direct payments to them (or to secure the agreed provision with any direct payments); is not a person described in the Schedule. This last test refers to the Schedule to the DP Regs which contains a list of excluded persons, including persons subject to drug and alcohol rehabilitation programmes.
Page 7 of 9 It is possible for payments to be made to a nominee, who would also need to satisfy the criteria above. This is similar to the arrangements which are in place in relation to the benefits system where a nominee can receive benefits for a person who is not able to manage their own payments, such as a care home provider where a young person is living in residential care. If a nominee is appointed the nominee will need to confirm in writing that he or she is responsible as principal for all contractual arrangements entered into in relation the direct payments. The recipient will need to set up a bank account used for the purpose of direct payments, although the same account can be used for any social care direct payments and health care direct payments as well. The recipient will need to keep a record of payments and withdrawals and provide the local authority with evidence relating both to the account and to the agreed provision which is being paid for. 8. The Amount of Direct Payments The amount of any direct payment must be sufficient to secure the full cost of the provision (DP Reg 10 (1)). This is important because where direct payments are made, the special educational provision to which it relates is deemed to have been secured by the local authority under its duty to secure the provision in section 42 (2) (see section 49 (5)). The local authority may increase or decrease the amount of the direct payments provided that they are satisfied that the new amount is sufficient to secure the agreed provision. This means that there is some flexibility in these arrangements. If, say, direct payments were used to meet the cost of a therapy and the charges were increased, the local authority can be notified of this change in circumstances and will then be obliged to increase the payment to ensure that the amount remains sufficient to meet the full cost (DP Reg. 12). Payments may also need to be increased when a parent or young person has achieved a better description of special educational provision via the Tribunal. 9. Monitoring and Review of Direct Payments DP Reg 11 requires the local authority to monitor the use of direct payments. The local authority must review both the making and use of the direct payments whenever changes are made in relation to the qualifying goods and services and in any event: at least once during the first three months of the payments being made; when conducting a review or a re-assessment of an EHC Plan under section 44. The recipient of the direct payments can also request a review.
Page 8 of 9 Whenever a review takes place the local authority must consider if direct payments continue to be appropriate and if the direct payments have been used effectively. They must also check that the amount continues to be sufficient to secure the agreed provision and that the recipient is complying with their obligations under the direct payment agreement. After a review the LA can stop payments, but remains under a duty via section 42 of the Act to secure the special educational provision in the EHC Plan. Where an LA reduces or stops payments, it must inform the recipient in writing of its decision and the reasons for it, and invite representations (DP Reg 12 and 14). The LA is obliged to review its decision if the parent or young person requests a review, and must consider any representations, but there is no independent appeal to a panel or the Tribunal. The parent or young person has the power to cease the payments at any time by withdrawing their consent to the arrangement (DP Reg 14 (1) (a)). The LA remains under a duty via section 42 of the Act to secure the special educational provision in the EHC Plan. 10. Interaction with Health Care and Social Care Direct Payments Where a child or young person has an EHC plan and there is health care provision specified in the Plan, it is possible that the health care provision could also be made by way of a direct payment. This would not be a payment under the DP Regs but made by the commissioning body under section 12 A (1) of the National Health Service Act 2006 (direct payments for health care) to which The National Health Service (Direct Payments) Regulations 2013 as amended by the National Health Service (Direct Payments) (Amendment) Regulations 2013 will apply. If this happens then the health care provision in the EHC Plan will be treated as having been arranged by the commissioning body under its duty to arrange the provision contained in section 42 (3) of the Act. Where social care is specified in the Plan, it is possible that the social care team within the LA (either Children s services or adult social care) can agree to direct payments being made in lieu of social care provision. This would be done under for children under 18 years old following an assessment of social care need under section 2 of the Chronically Sick and Disabled Children s Act 1970 and then once provision has been identified under section 17 of the Children Act 1989. For those over 18 years old the Care Act 2014 enables a
Page 9 of 9 LA to make a direct payment if they have assessed needs and then decide to meet those needs.