LA demanding Direct Payments money is repaid

I have a woman with bipolar disorder who had DPs. From what I can tell there was no particular oversight or auditing of how she was using the DPs for about 3 years after the initial advice she was given whilst they were set up. Recently the LA has come back to her to do an audit and she has been unable to identify large amounts of expenditure from her account. Consequently the LA has hit her with a substantial repayment demand.

Most of the time the client has capacity to manage her affairs but when her bipolar flares up she loses insight, has limited understanding/ memory of her actions. In common with some other people with bipolar, she spends money recklessly with no regard for the consequence during these periods. She also struggles to understand concepts such as
the money can only be spent on her ‘wellbeing’ and that would not include buying a warm coat for winter, or new shoes.

It is difficult to establish exactly when these cycles of her bipolar have been severe as her lack of insight means that she does not consider herself unwell and does not seek help/ avoids mental health services when unwell.

I have tried to refer the client (who is currently well) to a solicitor but she refuses to do that. Can anyone point me to guidance/good practice/caselaw for DPs when someone has fluctuating capacity and/or is clearly vulnerable by reason of mental health? On the face of it the LA has failed in its duty to safeguard/support her properly and is on dodgy ground demanding repayment but I could do with some back up before putting this argument to it.

Thanks.

best place to start is the LAG handbook https://www.lag.org.uk/shop/book-title/201257/community-care-and-the-law Its like our CPAG bible but for com care issues. My experience is that you can’t advise on these issues without it, just like you can’t advise on benefits without either the CPAG or the DRUK handbook.

We produce a factsheet on Personal budgets and direct payments in social care which might be helpful? Section 8 covers various issues around DP’s.

Sections 11 and 12 of the Care and Support Statutory Guidance are also worth a look.