Personal budgets and direct payments in care

Local authority money paid to a person to arrange their own care.

What it means

A personal budget is the amount the council says is needed to meet eligible care needs. A direct payment is that money paid to the person or their representative to arrange support themselves.

Why it matters

For providers it changes who the customer is — the individual rather than the council — with different contracting, invoicing and credit risk.

What it looks like in practice

Direct payment recipients often become employers of personal assistants, with the duties that carries. Providers selling to them are selling to a consumer, with consumer law applying.

What to watch out for

Credit risk. An individual paying from a direct payment has less capacity to absorb a disputed invoice than a council, and payment terms should reflect it.

Where to get proper advice

Your local authority's brokerage team, and Skills for Care for the employment side.