In 2012, the Government invited local councils in England to participate in a pilot programme to test direct payments in residential care. While the programme was set up to allow for comprehensive summative evaluation, the uptake of direct payments in residential care was substantially lower than anticipated, with only 40 people in receipt of one at the end of the programme. Drawing on qualitative data collected for the evaluation, this paper aims to understand better the barriers to implementing direct payments in residential care. Evidence from the use of direct payments in domiciliary care identified gatekeeping by council frontline staff as a major barrier for service users to access direct payments. Our findings suggest that, whilst selectivity of both service users and providers was an integral part of the programme design, gatekeeping does not fully explain the poor take-up. Other factors played a part, such as lack of clarity about the benefits of direct payments for care home residents, the limited range and scope of choice of services for residents, and concerns from care providers about the financial impact of direct payments on their financial sustainability.