The Care Act 2014 places personal budgets into law for the first time, making them the norm for adults with care and support needs. Where implemented well, personal budgets can improve outcomes for adults who use services and deliver better value for money. The local authority is responsible for arranging and agreeing the personal budget.
A personal budget, in conjunction with a local authority care and support plan, enables the adult and their representative to exercise more choice and control over how their care and support needs are met. It means the adult:
- before care and support planning begins, has an estimate of how much money will be available to meet their assessed needs and, in the final personal budget, have clear information about the total amount of the budget, including the amount the local authority will pay, and what amount (if any) the person will pay;
- being able to choose how the money is managed from a range of options, including direct payments, the local authority managing the budget and an individual service fund (a provider or third party managing the budget on the adult’s behalf) or a combination of these approaches;
- having a choice over who is involved in developing the care and support plan that shows how the personal budget will be spent, including family or friends;
- having greater choice and control over the way the personal budget is used to purchase care and support and from whom it is purchased.
2. The Personal Budget
Everyone whose care and support needs are met by the local authority should be allocated a personal budget as part of their plan.
The personal budget should give the adult clear information regarding the money that has been allocated to meet the needs identified in their assessment and recorded in their plan.
The detail of how the personal budget will be used should be set out in the finished plan.
At all times, the wishes of the adult are considered and respected. For example, people should not be forced to accept specific options, such as moving into care homes, against their will because they are the cheapest.
3. Personal Budget Options
The adult, and anybody else the person wishes to assist them, can make informed decisions about how their personal budget operates, including:
- the adult can choose for the personal budget allocation to remain with the local authority to spend on their behalf, in line with their wishes;
- alternatively the budget can be placed in an Individual Service Fund (ISF), held by a third party provider, which works on the same basis;
- or be taken as a direct payment (see Direct Payments);
- or the adult may prefer a combination of approaches. For example, some of their needs may be met by a direct payment, with the remainder of the personal budget used to meet needs via the local authority or through an ISF.
The method/s of allocating and operating the personal budget will be decided and agreed during the planning process.
4. Elements of the Personal Budget
The personal budget must always be sufficient to meet the cost to the local authority of meeting the adult’s needs, which the local authority is under a duty to meet or has exercised its power to do so.
The personal budget should be broken down into the following elements:
- the amount the adult must pay, following the financial assessment);
- the remainder of the budget that the authority will pay;
- the personal budget may also set out other amounts of public money the adult is receiving, such as money provided through a personal health budget or from other funding streams, such as housing, and the local authority considers any request from an adult who wants their personal budget set out in this way.
Where budgets are integrated, the provider should agree to monitor all budgets the adult is receiving.
5. Self-Funding and Personal Budgets
Where the local authority is meeting the eligible needs of an adult whose financial resources are above the limit, but who has requested the local authority to meet their needs, a charge may be made for putting in place the arrangements to meet needs. When this occurs, the information should be set out for the person in an accessible format. This fee is not part of the personal budget, because it does not relate directly to meeting needs, but it should be presented alongside the budget to help the adult to understand the total charges to be paid. So that everyone is clear about how costs are allocated, this fee should be included in both the plan and the personal budget.
6. Top Up Payments
Where the adult or a third party on their behalf, such as a relative, is making an additional payment (or a ‘top up’) in order to be able to secure the care and support of the person’s choice when this costs more than the local authority would pay, the additional payment should not form part of the personal budget because the budget indicates the costs to the local authority of meeting the needs. However, the information about the additional payment should be presented so that the total amount of charges being paid is clear and the link to the personal budget amount is understood.
8. Use of the Personal Budget
The adult should have a range of options for managing their personal budget, including how it is spent and how it is utilised. There are four main ways in which a personal budget can be deployed:
- a managed account held by the local authority with support provided in line with the person’s wishes;
- an individual service fund (ISF), which is a managed account held by a third party with support provided in line with the person’s wishes;
- a direct payment (see also Direct Payments);
- a ‘mixed package’ that includes elements of two or all three of the previous approaches.
The decisions about how the personal budget is used are recorded in the plan and the adult should be given as much flexibility and choice as is reasonably practicable in how their needs are met.