While Leni was working at ADKC she did a report about the pros and cons of pre-payment cards and how it was working in other Local Authorities. For all of you who didn't get to see it, but who are interested, here is the report.
Personal Budgets Research
At the moment the longest running pre-paid card scheme is run by Kent County Council. This provides people using Direct Payments with pre-loaded cards that can be used for bank transfers (FastCash) and cash withdrawals. Individuals can decide if they want barriers on their cards based on merchant categories (Merchant Category Banking). Blocking is based on risk and individual choice and can be reversed effective immediately.
The National Centre for Independent Living said it became clear that the pre-paid card is not working the way the Kent Council had hoped. The use of these cards is a highly contended issue and they consider this a high priority at the Centre for Independent Living in Kent. Members of the council and representatives from RBS had previously gone to speak to the Individual Budgets reference group and to demonstrate the pre-paid card system. They faced many awkward questions and the overall reaction was negative.
NCIL sited four main reasons these pre-paid cards are not able to work in practice. Firstly, they are hugely expensive to administer. They are a fancy gimmick with an enormous transaction cost. Up to now the Kent County Council has not been transparent about their use which has angered tax payers. Secondly, is the feeling that a pre-payment card is a ‘big brother’ style intrusion into people’s ability to have total control and choice. According to NCIL this form of intrusion is completely unacceptable and it seems to be the only way these cards can work; by knowing who spent what and when. Thirdly, they don’t allow for choice and control because only a finite amount or outlets accept pre payment cards. There is no option for using the card at a provider who is not on the scheme; this is extremely limiting. Finally, the Council are trying to lay the success of the Personal Budgets scheme down to the pre payment cards and NCIL says this is not factually correct. In Kent the council is claiming to have widened the reach of PBs by introducing these cards but in truth they go against the fundamental spirit of PBs.
In addition, the Council is seemingly intimidating PB users into the pre payment card system. Only people who are in the know are aware that they are optional. According to the NCIL this is certainly something Kensington and Chelsea should not enter into.
Furthermore, speaking to Caroline Tomlinson, the lead on consumer support and member support manager for In Control more issues came to light. Caroline pointed out that Kent County Council are using the pre-loaded card system and it has been hugely expensive, for this reason it has been implemented for only 30 people. The biggest issues with the cards are the transactional cost and the fact that the facilities often don’t exist for the card to be used making it hard. The cost for care will escalate and the person who will end up having to pick this cost up will most likely be the service.
She went onto emphasise that it’s unclear whether this is a fair process. In reality, why does one need these cards when they can attach a credit card or a debit card to the account their PB is going into
Caroline also said If Local Authorities want to limit the ways in which users are spending their budget there are more efficient methods! This could be through an online marketplace for example with virtual transactions. In this case the Local Authorities can claim back VAT whereas they can’t with the card. The card will only be as good as the suppliers who accept it.
She went onto say that the reason behind reinventing a system that already exists is unclear, and just adding more bureaucracy and administrative strain. Social support is building a virtual reality when we have a real world that exists.
She continued that, these types of cards are limiting the creativity and choice for PB users. The idea of creativity is a great one until you dig a bit deeper. These cards will not allow for the creativity of legal rewards as a thank you for doing your shopping or providing emergency care. There are currently 6 ways to manage a personal budget, and it’s understandable to want to ensure that the money is going towards the right outcomes. The most effective way of maintaining independence, choice and control for someone who either has no capacity or is at risk of misusing the PB is with a managed budget such as that provided through third party payments. Real independence, choice and control comes from having a bank account and a credit/debit card that you can use from that account. The other thought is that having one’s own bank account further gives ownership to the individual.
It is clear that the pre-paid cards haven’t worked well in Kent as yet seem very limited and are not widely used.
The Department of Health made it very clear that there should always be more than one option so that no one is ever forced into using a system they feel uncomfortable with. They also pointed out that the card in itself is not a restrictive measure but can limit the service user’s control depending on the restrictions the council intends to apply.
Following the introduction of the pre-paid card system, PB users expressed how this was affecting their independence, choice and control.
"I have the right to open a bank account if I so choose! The personal budget was created according to my needs. I may be a disabled person but I am an adult who knows how to make choices. The pre payment card should be an option for people who do not want to manage their own accounts not a system to be a Big Brother and watch my every move. Where is my choice, control and independence in all this?"
"For the first time Personal Budgets has given me control over how, when and where I live my life and manage my disability. Pre payment cards will take all this away. I will fight this all the way."
"The pre payment card should be given to people who are at a high risk of abusing the system or those who do not want the responsibility. It should not be forced on us. I do not want to ask permission to be in control."
"As usual we are not considered as having the ability to run our own lives. We are constantly being bottle fed and treated like second class citizens who are not capable of managing money and needing permission to exist! Pre payment cards are another control over the way we live."
Various councils are considering the pre-paid card system, but it is important to understand whether they see it as an option or a default. Westminster City Council are piloting the pre-payment cards as an option for people who prefer to use them. Barking and Dagenham are not currently using pre-payment cards but want to pilot them soon. They will be an optional choice. There will be restrictions on the card but hopefully as few as possible. They are looking into being able to use the cards for cash payments and withdrawals but they are aware that this is quite expensive and are not sure who will be able to cover the cost. Cheshire East Council use empowerment cards but these are completely optional; definitely not a default. They are still in the trial stage.
In conclusion, it is important to ensure that pre-payment cards are an efficient system for both service users and councils. The benefits of pre-payment cards are that they provide an alternative for people who do not want to manage their own money either because they are at risk of misusing their budget or because they do not have the capacity to do so.
The limitations to the system are that it takes the control and choice away from people who are able to manage their budgets. Individuals have to ask for permission to have a change of use for the pre payment card whether it is in an emergency or a change of direction to meet the same outcome. This seems to be creating a reliance on social services and a move away from independence and back to a system of dependence. The pre payment card seems to move away from the fundamental principles of personalisation i.e. keeping the user in the centre of the PB process. The pre-payment card could be very effective in certain situations, but should be used as an option and not as a default.
DO YOU HAVE A PRE PAYMENT CARD? HOW HAVE YOU FOUND IT? WHAT WERE THE GOOD/BAD POINTS? HOW WOULD YOU CHANGE IT? Leave us a comment!