About personal budgets

The model of care for Integrated Personal Commissioning envisages a far greater role for personal budgets, including by bringing health and social care funding together around the individual so that they can direct all the resources available to them for the first time. Personal budgets can reduce hospital admissions as well as improve quality of life.

Following a successful piloting phase and independent evaluation, personal budgets were rolled out in social care from 2007 and are now mandated in the Care Act for everyone with an ongoing care and support need that is eligible for social care funding. In the NHS, personal health budgets are currently available as a “right to have” for people eligible for NHS Continuing Health Care (CHC) and should be an option for anyone else that might benefit from April 2015.

Evidence suggests that when implemented well, personal budgets can improve health and wellbeing outcomes, reduce other service use and deliver greater value for money. Personal budgets have been found to be most effective for people with complex needs, including the cohorts of people identified as the focus of IPC.

Personal budgets mean that the person with the health or care need should:

  • Be able to choose the health and wellbeing outcomes they want to achieve, in agreement with a health and/or care professional.
  • Know how much money they have for their health care and support.
  • Be enabled to create their own personalised care and support plan, with the support they need
  • Be able to choose how their budget is held and managed, including the right to ask for a direct payment.
  • Be able to spend the money in ways and at times that make sense to them, as agreed in their personalised care and support plan.

There are different ways in which personal budgets can be managed, either as a managed or notional personal budget, where the money is held by the commissioning agency on the person’s behalf to be used as set out in the personal care and support plan, or as a direct payment.

Direct payments are cash payments of NHS and/or social care money made directly to the person, to a trusted third party or to an organisation that manages the money on the person’s behalf. Direct payments are available to all groups, including carers, disabled children and people who lack mental capacity. However, they cannot currently be used to purchase residential care.

A means of improving the choice and control people can have through managed or notional budgets is an Individual Service Fund.  This means that the budget is held by a health care provider under a contract with the commissioning agency, but the person chooses how it is spent to meet their needs and outcomes.

The IPC programme will demonstrate how health and social care funding can be integrated around the person at an individual level, bringing together these resources into a single personal budget. These arrangements are currently rare, though progress has been made in some areas through the Going Further Faster programme which suggests a number of factors are associated with a successful approach:

  • Learning from the approach in social care has helped avoid reinventing the wheel where processes are already established and may just need tweaking.
  • Pooled funding arrangements are definitely helpful, though their absence need not be a barrier to making progress.
  • A willingness to think laterally about budget setting has helped avoid unnecessary complication and inertia – through IPC this will mean allocating personal budgets while the financial model runs in shadow form
  • Joint approaches to giving information and advice have helped to present a coherent picture to potential budget holders and the public.
  • Joint assessment and care and support planning processes can work well, enabling people to create single, holistic plans while encouraging professionals to build mutual understanding across disciplines.