Direct payments provide greater choice, and can offer incredible value for money. But has allowing service users, their carers and families access to their funds made the system more vulnerable to malpractice, asks Andrew Cole
Personal budgets, by which users of services control the funds allocated for their care, are increasingly the norm in social care in England. By April 2013, it is anticipated that everyone who is eligible for state-funded services will be on a personal budget.
This shift to offering users more choice and control through self-directed support has been largely welcomed. But greater freedom also brings greater risk, not only to the individual but to public funds. And a recent Audit Commission report concludes that the risk has now become "significant", noting that councils last year reported to the commission 102 cases of social care fraud ? the vast majority of them involving personal budgets.
Those 102 cases brought a total loss to the public purse of ?2.2m, or an average ?21,000 in each case. And given that the number of people receiving personal budgets has been rising sharply, it is hardly surprising that such cases are attracting greater attention from national and local auditors.
Personal budgets can be paid to the individual, family or friend as a direct payment, or can be managed on the individual's behalf by the local authority or another organisation such as a care agency or user-controlled trust. In its report, Protecting the Public Purse, the commission identifies three ways in which personal budget fraud is usually perpetrated: by the user themselves making a false claim, by someone managing the budget on their behalf, or by the organisation or individual providing care to that individual.
Croydon council, in south London, last year brought what is thought to be the first successful prosecution for personal budget fraud. Sameer Hamidi had been managing direct payments on behalf of his mother. Between April 2008 and July 2009 he received more than ?12,000, which he claimed was going to a carer but he was actually keeping for himself. He was eventually jailed for 20 weeks.
On the face of it, personal budgets would seem to increase both the temptation and the opportunity for people to take advantage of the system. David Hogan, investigations manager at Croydon council, has encountered at least a dozen cases of suspected personal budget fraud in the past year. "These are people who are probably unlikely to commit fraud in normal circumstances," he says. "All of a sudden we're presenting them with a situation where they can do right or wrong, and some will choose to do the wrong thing ? I certainly think it's easier to commit fraud in this area than some others."
The charity Action on Elder Abuse is also convinced that personal budgets present an increased risk, pointing out that two-thirds of abuse of older people takes place in their own home and that the bulk of financial abuse is committed by their children.
"Undue influence and coercion are a major factor in forcing older people to part with their money," says the charity's chief executive, Gary Fitzgerald. "Without adequate monitoring and safeguarding, we are effectively abandoning our responsibilities for those people."
Hogan says there is a danger that personal budgets can creep under the radar because they seem relatively small beer, but, he points out, some people on direct payments receive ?2,000 or more a month. One case of alleged fraud currently in court involves a total of ?50,000.
"This is high-value and high-risk," Hogan says. "I think local authorities have been very slow to wake up to direct payments as an area for fraud compared with, say, benefits. Because it sits away from the normal benefit region within social services, it tends to be overlooked. But you could make quite a lot of money out of it in a relatively short time if you had a mind to it."
He divides personal budget fraud into two broad categories: deliberate falsification of documents on the one hand and, on the other, more opportunistic false representation. The latter often happens where the service user has died, but no one informs the council and so payments continue. "People have got used to receiving this regular payment and are reluctant to lose it," he says. "In one case the wife didn't notify us of her husband's death and then fobbed us off for a year."
One problem, he suggests, is that the social services staff dealing with the user are not always fraud-aware. They may also be reluctant to raise suspicions because they have developed a relationship with the user and their family.
Croydon has now introduced awareness training as well as support from the council's audit team, which partly explains the rise in cases of fraud being reported. As part of this, staff are encouraged to make close checks on the dedicated bank accounts with which users manage their direct payments. In the past, says Hogan, they tended only to give them a cursory glance. "They need to go through these line by line and ask: 'Is this telling me something I didn't know about the service user?' It's getting them to focus on the detail."
The key to successful financial safeguarding is this attention to detail, as well as making sure that staff raise any concern they have immediately. "If you don't deal with these things very quickly, they will escalate and get out of all proportion," Hogan warns.
At Enfield council in north London, 60% of personal budget clients now use a special, pre-paid credit card for all social care payments. This means it is relatively easy to spot irregularities. But, just as important, says Keezia Obi, head of safeguarding adults, is that staff are financially aware and have regular face-to-face conversations with clients ? especially if they are isolated or vulnerable.
There is as yet no evidence that having more people on personal budgets in Enfield has increased the amount of fraud. In fact, of all the fraud cases identified in the area in the past year, only one was related to personal budgets.
And because the auditing process is more transparent, it may even help to reduce the level of financial abuse in the long term. For instance, personal budgets might allow a council to spot something ? such as a relative stealing from an older person ? that had previously gone undetected. "Prior to personal budgets, we wouldn't necessarily have found a way into that or have suspicions raised," says Obi. "But if someone receives a personal budget, it enables us to detect what may have been going on before."
The Social Care Institute for Excellence, which takes a close interest in safeguarding issues, highlights the need for clear information for both staff and clients about how to spend personal budgets.
Staff need to be aware of financial abuse and safeguarding strategies as well as self-directed support planning and review, says David Walden, director of adult services. But, echoing the Audit Commission, he stresses the importance of a proportionate response "balancing the risk of fraud against the benefits for users of personal budgets".
This is a theme taken up by Juli
e Stansfield, chief executive of In Control, the social enterprise that supports the personalisation agenda. What must not be forgotten, she says, is that personal budgets have helped to transform many people's lives by giving them control.
"I desperately don't want this to suppress people's choice and freedom," says Stansfield. "People take incredible responsibility and get incredible value for their money. And in some respects the more freedom that people have with their money, the greater chance of good economic efficiencies."
She suggests that some councils are spending more on auditing direct payments than the actual value of the payments. "It should be proportionate and appropriate, but not suppress people's choice," she says. "People have got to be allowed to take their own risks."
But she is convinced the greater accountability in the new system will lead to lower levels of fraud in the future. "No matter who monitors the money, the key point is that it's now transparent," says Stansfield. "In some respects previously it wasn't at all. People had no idea how much care cost and whether it was worth the money."