Councils are preventing care users from shaping their own services because of red tape and 'patronising' staff attitudes to clients.
That was the verdict of the Commission for Social Care Inspection in a damning report on the low take-up of direct payments.
It has also suggested the Department of Health sets up a taskforce, including users and advocates, to help councils increase take-up.
Direct payments: what are the barriers? includes figures from September 2003 showing that just 13,000 people use direct payments - a small proportion of those eligible.
Drawing on interviews with users, the report claims there is significant demand for direct payments as a way of increasing people's control over their services.
Commission chief inspector David Behan said: 'People are facing three common barriers - lots of paperwork, a lack of information and councils' reluctance to embrace direct payments as a realistic option for more people.
'The demand for direct payments is there and so is the money. It is now up to councils to make sure people can access these payments quickly and easily.'
The report also cites 'patronising or restrictive attitudes towards people who might want to use direct payments and an unwillingness to devolve power from professional to individuals'.
Association of Directors of Social Services president Andrew Cozens admitted progress in promoting direct payments had been both slow and inconsistent, though he stressed the September 2003 figures were out of date.
He said: 'A very small number of councils account for most of the direct payments. It is something that needs
a substantial shift in the mindset of councils.'
He said councils were reluctant to stop providing or commissioning services so that resources could be given directly to clients to arrange their own services.
Mr Cozens warned direct payments may not be appropriate for some users, adding: 'Direct payments are a very important means for achieving choice, but for some users it is a step they are not prepared to take.'