I have a family that are looking at direct payment for services money to pay for transport to a pre-school support group to access sign language support?
does anyone know if this is possible or are direct payments only for employing someone to support the child?

The starting point with direct payments is to establish what the LA social services assessment has decided are the assessed needs. If it is not an assessed need then it cannot be met through DP, as they are simply a way of meeting the need. As they are a child it is likely the assessment was under the Children Act 1989. If they have been assesed as needing sign language support and transport to it is part of the assessed need then it can be met by DP. If the transport hasn't been included then they should request a re-assessment, on the grounds that in order to have the assessed need met they need to be able to travel to it.

Subject to the above there is no reason why the transport cannot be met through DP. The only services which cannot be met by DP are respite and any local authority provided services. There are restrictions as to who can receive the DP which exclude close relatives in many cases.