Explanatory note

This Order makes provision for a pilot scheme in accordance with which local authorities may make direct payments under section 532A(1) of the Education Act 1996 (“the 1996 Act”).

Under section 532A(1) local authorities may make direct payments in respect of —

Local authorities may only make direct payments under section 532A(1) in accordance with the pilot scheme which is set out in Schedule 1 to the Order (article 2).

The local authorities that may operate the pilot scheme are those authorities set out in Schedule 2 (article 3) and the pilot scheme has effect for two years from the date on which the Order is made (article 4).

The key provisions of the pilot scheme in Schedule 1 are as follows:

Goods and services (defined in section 532A(2) of the 1996 Act) acquired by means of direct payments made in accordance with the pilot scheme are to be treated as provided or arranged by a local authority in pursuance of one of the statutory duties referred to in section 532B(9) (paragraph 2).

Direct payments may be made in respect of a beneficiary (defined in section 532A(1) of the 1996 Act) to a parent of a beneficiary under the age of 16 or to a beneficiary who has attained the age of 16 (paragraph 6). Direct payments may only be made if the parent or beneficiary satisfies the conditions set out in the paragraph 6(2). Local authorities may also make direct payments to a person nominated by a parent or a beneficiary who has attained the age of 16 (paragraph 7), or to a representative where the parent or beneficiary that has attained the age of 16 does not have capacity to consent to the making of direct payments (paragraph 8).

Before making direct payments local authorities must reach an agreement as to the goods and services which are to be secured by means of direct payments, and obtain the written consent of the person to whom direct payments are to be made. Where a nominee is to receive the direct payment, in addition, the agreement and consent of the parent or beneficiary must also be obtained. The written consent must also set out the goods and services which are to be secured by means of the direct payments and whether the direct payment is payable in a lump sum or by instalments (paragraph 10).

Direct payments may not be made unless the local authority has satisfied itself in relation to the matters listed in paragraph 11, which include that the way the direct payments are to be used to secure the agreed provision is appropriate and that the making of direct payments is compatible with the authority’s efficient use of its resources and will not have an adverse impact on other related services provided or arranged by the local authority. Where a local authority decides not to make direct payments, it must inform the person who wished to receive direct payments of its decision in writing and, if requested, review that decision (paragraph 13).

Direct payments may not be made in respect of goods or services which will be used or provided in a school or college unless the head teacher of the school or principal of the college agrees.

The local authority must be satisfied that the amount of direct payments is sufficient to secure the full cost of the agreed provision (paragraph 14) and can increase that amount. It may also reduce the amount of any direct payments for example where direct payments have accumulated and remain unused. The local authority must notify the person receiving the payments of any change in the amount of any direct payments, and where it is reducing the amount the authority must also give reasons for the reduction.

Paragraphs 15 and 16 set out the process the local authority must follow for monitoring and reviewing direct payments, including the actions that a local authority may take following a review and the process to be followed if an authority decides to stop making or reduce the amount of direct payments. Local authorities are required to review the making and use of direct payments at least once in the first three months, one year after the direct payments began and subsequently at appropriate intervals (paragraph 15(2)).

Paragraph 17 sets out the circumstances in which a local authority must stop making direct payments, including where any consent required under paragraph 10 has been withdrawn; when the authority becomes aware that the person receiving direct payments is not using the direct payments to secure the agreed provision; or when the authority becomes aware that the making of direct payments is having an adverse impact on other relevant services or is no longer compatible with the authority’s efficient use of its resources.

A local authority may require all or part of any direct payments to be repaid (paragraph 18), including where the beneficiary’s circumstances have changed or where the direct payments have not been used to secure the agreed provision. An authority must give reasonable notice where it requires a sum to be repaid and review its decision when requested. Where a local authority requires a sum to be repaid that sum may be recovered as a debt due to the authority.

A local authority must provide information, advice and support to recipients of direct payments, including written information about organisations that may be able to provide assistance in connection with direct payments. Where organisations charge for such information, advice and support the authority may make direct payments in respect of such charges.

The conditions with which a local authority must require a person who receives direct payments to comply are set out in Part 3.These include using the direct payments only to secure the agreed provision, ensuring the bank account into which the direct payments are paid is used only for purposes connected with the direct payments, and keeping a record of money paid into and out of that account

Part 4 sets out the persons to whom direct payments may not be made and include persons who are subject to drug and alcohol treatment requirements.

No regulatory impact assessment has been prepared for this Order as there is no impact on the private and voluntary sector.