I can tell you about my experience which may be slightly different as my DS1 who gets the DP's is only 6.
We had to open an account for him, which is where the monthly direct payments go into and where everything is paid for via a cheque book.
I now employee people to be his personal assistants, the direct payments office give you some money towards the initial outlay for this for advertising and interviewing costs, however I didn't need this as I employed people from DS1's school.
The direct payment office sent a lady around for A4E who helped me set up employers insurance which the directs payments paid up front for the first year and which we now budget for out of the monthly dp's for next year.
This A4E lady also helped set up a budget to make sure we knew how many hours we could employ people for and how much we needed to keep back for insurance, holiday pay, national insurance, etc. She also drafted up contracts of employment for us.
We had a choice of going with a local payroll company of with A4E itself (I think?) but choose the local company.
They are excellent, all we do is keep account of how many hours each employee does each month (via timesheets) and phone the hours in at the end of the month, this company then sends me payslips and how much I have to send the national insurance office. I then write the cheques and send them out.
We have an agreement with our staff to pay them holiday pay at the end of the financial year, based on how many hours they have done during the year, rather than them taking time off, as the hours they do are on a very ad hoc basis. At the end of the financial year I telephoned the payroll company and told them how many hours each employee had done in the previous year and they included the holiday pay in the next months pay slips.
It all sounded very daunting to begin with, but actually hasn't been too bad. Keeping up with the timesheets etc is half the battle I think.
Although saying that, I am about do send back my first set of reports/accounts after 6 months tomorrow, which I hope will be straightforward, but who knows?
I must add, that we were offered a 'managed' account, where someone else (from the direct payments office I guess), did all of the above. However we thought we would give it a go ourselves so we kept control and flexibility and so far don't regret making that decision.
Hope this helps a little and best of luck with it!