An Individual Budget is an entitlement that is subject to some controls or conditionality.
A Conditional Resource Entitlement is any way of giving people the resources they need, but subject to some set of rules or conditions.
The Conditional Resource Entitlement is an idea developed by Simon Duffy from the work of the philosopher Jo Wolff. It was a way of trying to explain the kind of thing that an individual budget is: a resource, under the control of the person, but subject to some conditionality or rules.
The Conditional Resource Entitlement model was developed to provide a helpful critique of the different strategies available for building a fairer society and the new and innovative role that could be played by individual budgets and other approaches that were intermediate between direct services and income adjustments.
It is useful to think about the concept of an individual budgets as just one mechanism for bring about social justice. There, at a high level of abstraction at least 5 different forms of intervention:
1. Create legal and social structures - the legal system can impose obligations on people to act fairly and can punish those who might act in ways that damage well-being (e.g. Disability Discrimination legislation aims to protect disabled people from unfair treatment).
2. Adjust income - the tax and benefit system enables government to alter the resources people can control directly and the incentives under which they operate (e.g. social security payments to disabled people or tax credits to ease transition back to work for people who are unemployed).
3. Provide services - the government provides, directly or indirectly, a range of health, educational or other services that people either must or can use, subject to whatever criteria govern eligibility to that service.
4. Adapt physical environment - the government can change the structure of the environment within which the person operates (e.g. increasingly buildings are designed so as to enable people who use wheelchairs full physical access).
5. Conditional Resource Enhancement (CRE) - the government can also target resources towards those individual who are eligible, but with specific conditions attached. Individual Budgets are an example of a Conditional Resource Enhancement, and this is the main focus of the rest of this paper.
Simplifying somewhat, we might argue that innovations such as individual budgets arise as the government finds that funding, currently committed to direct services, is better managed by people themselves. Shifting resources into the form of a Conditional Resource Enhancement could therefore be a way of improving the management of those resources, while still achieving the same social objectives. In general terms, any Conditional Resource Enhancement is defined by a framework that has the following five dimensions:
1. Autonomy - the CRE must be under control of the individual or of someone who can properly represent their interests.
2. Flexibility - the CRE must be able to be put to different uses by the person - it cannot be so inflexible that it cannot be shaped by the person.
3. Targeting - the person receiving the CRE must be eligible in some way for receiving the CRE.
4. Support - the person receiving the CRE may also get some form of support, information or advice.
5. Conditionality - there must be some conditions the breach of which would enable to the CRE to be constrained, withdrawn or managed in some different way.
The framework of support and conditionality for individual budgets are provided by the broader systems of self-directed support and personalisation within which the individual budget works. An individual budget is then a particular kind of state intervention focused on particular individuals - not direct service, not income adjustment, but Conditional Resource Entitlement; putting the individual in control of the relevant resource, but within a framework which implies some degree of conditionality.
On this analysis, an Individual Budget is one (but not the only) example of a Conditional Resource Enhancement. Other forms of CRE that have been used within the UK are set out below:
When examining this list is interesting to note that most of these alternative CREs achieve conditionality by heavily restricting how the resource can be used (e.g. by the use of vouchers and travel passes). In contrast, an individual budget achieves conditionality in a different way, by focusing on the purpose of the resource and upon the outcomes that are actually achieved. This outcome-based approach would seem to be essential to any approach that presumes that the citizen is best placed to determine how to meet their needs and that services that have been provided in the past cannot be presumed to form any reasonable template for what will be appropriate in the future.
However, Individual Budgets are not the only outcome-focused CRE. For example recent reforms to the Housing Benefit system provide an interesting parallel development and suggest that there could be other areas within the current welfare system where a different way of thinking may be possible. Housing Benefit is an amount paid to cover the cost of rents for those people who are deemed unable to afford to pay the cost of their own housing. In the past, those who were identified as eligible were able to get the cost of their rent covered by the state, although the state would only pay rents which it deemed ‘reasonable’ within any particular market. Usually rents were paid directly to landlords.
Under the new system of Local Housing Allowances those who are eligible are given a locally defined allowance which they can use to pay their rent. People can add to that allowance or they can seek a rent lower than the allowance. This reform seems to be both cost-effective and more consistent with citizenship. Interestingly, this reform has been restricted to the private-rented sector, where lower rents apply. Any effort to introduce choice and portability to the social housing sector through the policy of ‘choice-based lettings’ has been more limited. Applicants have no budget and can only select from the range of available properties to which they are matched using traditional needs criteria (i.e. a single person would not be eligible for a 3-bedroom house, even if they chose to pay the higher rent from other income).
The other important thing to note is that the examples above appear to suggest two primary risks. The first risk is that expenditure increases beyond budget (which happened with the Independent Living Fund, for example). This risk seems to be greater where open-ended programmes are developed and people are encouraged to seek funding outside a clear rationing framework. The second significant risk is the possibility of funds being misused. For example, the Individual Learning Account (ILA) programme was launched nationally in September 2000, but was later suspended and ultimately abandoned due to evidence of abuse by some providers and wider allegations of theft and fraud.. In contrast, it is worth noting that, in social care, direct payments and (so far) Individual Budgets are noticeably low in abuse. As a result, it may be that systems that move, in a controlled fashion, resources into the hands of those who have the least reason to abuse the resources could be the safest way of managing resources.
One further risk for Individual Budgets is likely to surround the issue of funding flexibility. While all the available evidence suggests that funding flexibility may be crucial in enabling individuals to meet their needs in creative and cost-effective ways, there will be a temptation for policy-makers to insure themselves against the risk of funding misuse or increased demand for resources by trying to impose process constraints on how the person who needs support can use their funds (effectively weakening the effectiveness of this way of working). It will be important, as individual budgets become more commonplace, to design checks within the system to ensure that such flexibility is not eroded.
The concept of a Conditional Resource Enhancement is useful insofar as it provides a broader context within which to examine the Individual Budget mechanism. But it also raises interesting questions about the strategic direction for Individual Budgets. It is probably too early to be clear, but at least three possibilities seem to exist:
1. Individual Budgets may only be a transitional measure, allowing resources to shift from the state to the individual without completely disrupting social expectations about the state’s duty to guarantee welfare for people who are perceived to be entitled to support by the general public. On this account, the CRE is a transitional state, and Individual Budgets may well become a form of income adjustment over time.
2. It may be that the dynamic interaction or co-production now possible between professionals and the users of Individual Budgets is the optimal state for improving well-being and personal outcomes for the people who currently use social care. On this account, the CRE is the end-state and the extension of Individual Budgets will signify a significant new phase in the development of the welfare state.
3. Against this, it is also possible that the development of Individual Budgets may lead to attempts to shift more private income or benefits into the framework of the CRE (although this is not advocated by the current authors). This is a very different strategic direction, reducing the level of resources over which the individual has autonomous control. For example, a possible option for the reform of English long-term care includes the notion of a ‘partnership model’ (Wanless, 2006) in which the state guarantees to pay a certain proportion of the cost of such support and the individual makes up the difference (either via personal savings/income or via the social security system for those on low incomes). In future, it would be perfectly possible for such a model to be implemented via a CRE. Similarly, there might be scope to shift some social security payments (such as current disability benefits) into the CRE framework. Thus, while Individual Budgets have been developed in the context of trying to shift control away from direct services and towards the individual, this is not the only possible direction - it is also possible to use CREs to make resources that were clearly under the control of the individual more conditional.
Having summarised the key features of Individual Budgets, this paper has sought to explore and make explicit the conceptual underpinnings of this way of working. While attention has tended to focus on the mechanisms, principles and outcomes of individual budgets, a fuller understanding of such conceptual issues is crucial if individual budgets are not to be seen as an end in themselves, but as part of a potentially broader shift in the relationship between the state and the individual. By framing individual budgets as a form of ‘Conditional Resource Entitlement’, there is scope to place this specific mechanism in the broader context of the different strategies available to government when seeking to improve the well-being of the community and to reduce the disadvantage experienced by certain proportions of that community.
Using this approach, it is possible to conceive of a future in which current CREs could become a form of income adjustment, could emerge as the optimal approach to meeting the needs of disabled people, or could even provide a mechanism for making (currently) individual resources more conditional. While the best way forward may well be a topic for another paper, the key issue for present purposes is the way in which the concept of a Conditional Resource Entitlement may enable a deeper understanding of individual budgets, of possible strategies for social policy reform and of the relationship between the state and the individual.
The publisher is The Centre for Welfare Reform
Conditional Resource Entitlement © Simon Duffy 2011.
All Rights Reserved. No part of this paper may be reproduced in any form without permission from the publisher except for the quotation of brief passages in reviews.
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