Direct Payments Analysis 2023/24
NHS Digital publishes data collated from local authorities on direct payments (DPs) annually. Below are some key observations from the data published for the 2023/24 year.
The reduction in direct payments has halted (kind of)
The total number of DPs in England is 117,737. This is an increase of 0.2% on 2022/23 (117,455), but still some way below the peak of 129,975 in 2016/17.
However, the picture is mixed: the proportion of people who access long-term support and who have a DP fell to 25.5% (2022/23: 26.2%), due to the total number of people accessing social care increasing at a faster rate.
The increase in DPs in 2023/24 was across all age groups. This ends a worrying trend we have identified in previous years where DP take-up amongst people aged 18-64 was increasing year-on-year, but falling in the 65+ group. However, the underlying gap in take-up rates is still significant - 37% amongst the 18-64 group but only 14% amongst the 65+ group.
Top (and bottom) of the table
NHS Digital ranks LAs according to their overall take-up level. A take-up level of 42% gets you in the top 5 and a take-up rate of 11% or lower gets you in to the bottom 5. There has not been much movement over the last three years at the top or bottom of the rankings,
Enfield, East Riding and Leicester all maintained their top 3 position. Having stormed in to 4th place last year, Kirklees added an impressive 241 DPs during 2023/4 but still saw themselves drop to 14th place. The reason for this is that whilst the number of DPs in Kirklees increased by 25%, the total number of service users increased by 45%. This may be an example of where statistics do not tell the whole story.
Big movers
With so little movement at the top or bottom of the rankings, we looked at the biggest climbers in the table, which were:
These five LAs together added 775 DPs between them, and other LAs would be advised to pay attention to what they have done to effect this (bearing in mind that the total increase across the whole of England was just 283 DPs).
We also extend our congratulations to the full list of LAs that are in the 'hundred club' (defined as an increase in the number of DPs by 100 or more in 2023/4): Bradford, Kirklees, Lincolnshire, Derbyshire, Hertfordshire, Kent, Greenwich, Lewisham, Westminster and Hillingdon.
The average cost of a DP
The NHS Digital dataset also draws upon data from the SALT returns. The SALT returns have much more detail - including the gross expenditure on DPs for each LA. Across England, LAs spent £2.2 billion on DPs in 2023/24, out of a total expenditure of £21.4 billion. This represents an increase of 10.7% on the previous year, despite the number of DPs only increasing by 0.2%.
Based upon the number of DP holders, we are able to calculate the average spend per DP as follows:
As we commented last year, this is higher than we expected based upon our experiences and anecdotal comments about typical DP values, implying that other costs (service delivery) are included in the SALT returns.
The year-on-year increases in average expenditure on DPs (age 18-64 of 9.5% and age 65+ of 13.0%) implies that there has been above inflation increases in DP rates. However, it is worth noting that total spend in adult social care increased by over 16% in the year, meaning that DPs haven't actually kept pace with expenditure increases in other areas.
Relative spend on DPs
The average all-ages annual expenditure on a DP is £18,978 per person. We would expect this to be substantially lower than nursing and residential care, but the interesting point is that is 29% lower than the average spend on community care (£26,584 per person):
Analysing the data another way: DPs make up 18% of all individuals with long-term support, but account for just 10% of council expenditure. Both of these headlines support the theory that DPs can and do save councils money.
Drilling down into expenditure by age group affirms this point:
In the 18-64 age group, DPs account for 16% of expenditure (but 32% of individuals). In the 65+ age group, DPs account for just 6% of expenditure (9% of individuals), so it is easy to see why DPs are sometimes not seen as 'business-as-usual'.
Next steps
We now know our way around the data well. We can (definitely) help you ask the right questions, and (maybe) help you find some of the answers. If you want to chat informally about any of the above or what the data says about your LA, we'd be happy to hear from you.