Can a local authority insist you tell them who you are going to employ before they give you a direct payment – and then restrict your payments only to the person whose name you have given?

No, I don’t think that that would be regarded as a legitimate use of the information power that they DO have, or a reasonable condition. That’s my gut feeling, in terms of the public law tests – is it rational and is it lawful. The power to impose conditions and the power to demand information which exists in the Direct Payment regulations here https://www.legislation.gov.uk/uksi/2014/2871/regulation/4/made

4.—(1) A local authority may make a direct payment subject to other conditions.

(2) The conditions referred to in paragraph (1) may, in particular, require that—

a) the needs may not be met by a particular person; [NOT that they can insist on who you DO spend it on please note. Even in the negative formulation, we think only for a good and disclosed reason, not a whole class of persons, such as ‘any of your friends and relatives’!]

b) the adult or authorised person (in the case of direct payments made under section 32 of the Act) must provide information to the authority.

(3) The conditions referred to in paragraph (1) may not require—

a) the needs of the adult to be met by any particular person; or

b) information to be provided to the authority—

1. more frequently and in more detail than is reasonably required by the authority for the purpose of enabling it to ascertain that—
2. making direct payments is an appropriate way to meet the needs in question, or
3.  the conditions upon which it is made are complied with, or

ii) in a format which is not reasonably practicable for the adult or authorised person to provide.

Is subject to those over-arching public law principles.

I can’t discern a purpose and my instinct is that it would be regarded as over the top, negating choice and control and thus the whole statutory purpose for the direct payment regime. 

I suspect that it is to do with the payment system people who need to know whose bank account you are putting the money in so as to be able to let you pick that person every time? That’s ridiculous.

Q. This is in addition to normal pre employment checks such as those a DPSS may carry out.  To be clear: I have two hours for cleaning which I am only allowed to use with a specific cleaner unless o give them the name of another specific cleaner.

A cleaner is very likely to be self employed – I don’t know if that makes any difference to what you’re asking but it might?

Q. Similarly my other PA hours are unavailable to me because I have not told them who I intend to employ – despite having not yet done the recruitment.

Well that’s not surprising – given their stance, but it’s obvious you can’t USE the hours until you’ve done the recruitment. So the real issue here is the stance that you believe them to be taking. If I were you I’d show them this and ask them to explain their position rather than complain.