1. Developments in using Prepaid Cards for Direct Payments
The National Prepaid Cards Network
Colin Whitehouse
Chair – National Prepaid Cards Network

2. National Prepaid Cards Network
Independent network created in 2011
Over 850 local authority, central gov’t and health sector members
Assesses sector requirements and captures best practice
shares best practice, issues and problems for mutual benefit
acts as an interface between the public sector and the suppliers
Membership, events, support and website are free of charge to the public sector
The Members Only area contains documents submitted by local authorities, access is restricted to public sector members and network organisations
It’s all free!

3. Prepaid Cards in the Public Sector
At the end of August 2018;
Prepaid Cards are being used by 130 UK Councils
…and over 20 Clinical Commissioning Groups
…and by Police, Charities and Social Enterprises
Many councils are now using prepaid cards in multiple service areas
almost always starting with adults and children’s services direct payments
Councils and CCG’s have uploaded £312m onto prepaid cards so far this year
Overall public sector upload expected to be near £1bn this year

4. Most popular applications
Adults direct payments
Authorities report savings of between 5% and 10% of their DP budgets by using prepaid cards
Appointeeships / Court of Protection
Children’s services
Fostering, respite care, young people leaving care etc.
Asylum seekers / no recourse
Personal Health Budgets
Cash replacement
Some authorities are cashless, using prepaid cards to replace cash in all departments
Emergencies / instant issue

5. Advantages to local authorities
Solves the problem of council funds being held in service users’ own bank A/C’s
Much easier proportional monitoring of spend
daily alerts and real time spend information
It’s easy to claw back funds when necessary
Spend can easily be monitored against the care plan
and data used during service user meetings and reviews
Improves authorities’ safeguarding capability
Automates the audit trail
Generates excellent management information
The prepaid card is the property of the council
Replaces cash handling - cheaper, faster, safer and more secure
Tighter integration between finance and front line social work

6. Advantages to service users
Prepaid cards are generally available to all, regardless of financial circumstances
many potential benefits to those financially excluded (20% of pop.)
Removes the considerable worry of providing paperwork
Access to better services and lower online prices (15% lower)
Promotion of life skills / social inclusion
Early notification of probable direct debit failure
No need to carry and manage cash
Can’t go overdrawn and incur costs
Can more easily track spend and manage their own finances
Improved and more timely safeguarding
….there is overwhelming evidence that service users like using prepaid cards….

7. Some examples...there are many more
A NE unitary authority can now produce a financial audit in seven minutes and they are used in ALL annual reviews
A County Council saved £7.5m in the first year of using prepaid cards with no impact on service delivery
Another saved over £1.5m by carrying out a high balances exercise with no impact on service delivery
Two unitary authorities have integrated prepaid cards with their financial systems and care systems and now have full operational dashboards showing their position at all times
A city council has produced seven case studies illustrating how prepaid cards have directly improved the lives of appointees
A London borough uses prepaid cards in all 14 departments and has closed all of its cash offices

8. ………case study excerpts……….

9. Further Action Required
Sum of BILLAMT
Column Labels
Name
Notes
Allocated Worker
Further Action Required
320
In use
Ian No
Payments made which have not registered in time to show on the report e.g. weekend withdrawals. 50
PA last withdrawn 26/06/16, high balance over £700, may need to look into reducing PA amount
Yes
Suggest reducing PA 70
Last withdrawn , balance of £190 on card
Andrew
PA not being fully withdrawn, may need to reduce PA amount
Beckie
120
PA not being fully withdrawn, not collected for 2 weeks and high balance over £1200
Two weeks with being withdrawn, client OK?
PA not being fully withdrawn, not collected for 2 weeks and high balance over £1300
280
Deceased, estate in process
Becky
Note for next week
100
Not being fully withdrawn
Phyllis
150
Irregular withdrawals, in use
Note to look at this again next week if payments still irregular
Last withdrawn 16/06/16, not being fully withdrawn, may need to reduce PA amount
Louise
Note last withdrawal date to keep a record
550
140
PA not being fully withdrawn, high balance over £600. May need to claw some back and reduce PA amount

10. What is a high balance?
Card account data enables us to see which accounts are running high and which a running low
Xxx pays four weeks in advance, anything below 4 weeks is a low balance
A high balance for managed accounts is 8 weeks
A high balance for client managed accounts is 12 weeks
The report flags accounts that need to be investigated for potential underspend, overspend, safeguarding, non payment of client contribution, need for a review

11. The high balance project
Once the report which showed the number of weeks in accounts was being used it was clear to see the large number of clients with high balances:

12. The high balance project
At the start of the project it was identified that there was approx. £1.3 million in the accounts that was above 8 to 12 weeks
It was quickly agreed that a project officer would be appointed on a one year contract to recall the excess funds. They have also been tasked with stablishing how to move forward with high balances to ensure this falls into business as usual.

13. The high balance project to date…..
£787k has been recalled across 207 accounts, leaving 8/12 week’s balance + extra where required
£846k excess still sits in 201 accounts
As it stands we are looking to recall over £1.6m across all 408 accounts (allowing for exceptional cases)
All accounts that have had a recall have been referred for review
If the account continues to accumulate a high balance again after a 2 month follow-up it’s reviewed again
20% of accounts get reviewed, altered and then subsequently undergo a second review

14. Appointeeships Pilot
Pilot for 12 months as council wide project to test the application and functionality of prepaid cards
Immediate benefits for Xxx
Removal of cash and cheques to pay for everyday items
Removal of security risk involved in moving cash around the city
Increased availability of team due to them not having to trek across the city
Immediate benefits for the customer
Immediate access to funds (no longer has to request funds in advance)
Freedom to obtain cash on demand
Improves customer wellbeing – customer able to have input into management of their day to day finances

15. Appointeeships Functionality
What do you expect from a prepaid card account?
ATM facilities
Online access
EPOS
Faster Payments
Standing Orders
Direct Debits
Easy to load – faster payments from the council are in the card account within minutes (great for emergencies)
24/7 access
Easy to monitor – full access to all accounts
Daily reporting

16. Usage
Currently 113 active accounts for appointees/deputyship (73% of cases have a prepaid card)
Loaded £110k in 12 months – 3000 card load transactions per annum. Load value and volume predicted to increase by 20% year on year.
5000+ customer transactions per annum

17. Appointeeships - Prepaid Account Use
In Xxx we keep customer funds in a separate bank account and use the prepaid card to facilitate the purchase of everyday expenditure. Xxx passes all of the costs for the account to the customer
Support agencies used by the council must have a money management policy. Monitoring and access to RTI (real time information) make the accounts as secure as they can be
Some authorities use the prepaid account exclusively to manage finances under appointeeship.

18. Some recent trends we’re seeing….
Individual Service Funds are slowly becoming more popular
Self-employed PA’s cause difficulties and authorities don’t always know where to draw the line on helping service users
There a slight but growing shift back to paying DP’s gross rather than net and invoicing for the contribution
Third party managed accounts providers are variable, smaller ones can be flexible, larger ones tend not to be. Trust is often an issue. Money management policies can be scarce.
All prepaid cards will soon have the facility to be contactless, but this can be switched off by the authority
Some ‘slower to act’ authorities are suddenly moving more quickly on prepaid cards

19. Final thoughts
There are currently two prepaid card framework contracts available to all UK public sector organisations
It’s possible to be up and running within 4-6 weeks of signing a contract
The funding authority remains in total control of its finances and fits prepaid cards around how they want to operate
Members identify service user resistance as the biggest red herring
The network provides a safe forum to get started, no-one is going to do anything that hasn’t already been done by other network members
This isn’t new or risky, a small and shrinking minority is not taking advantage of the opportunities provided

20. Questions?