Implementing Personal Budgets

Author: Simon Duffy

This note outlines best practice in the assessment and management of personal budgets within England, particularly as it should work for people with complex needs.

Summary

In summary, the purpose of the system is to maximise the opportunities for an individual to live a full and active life as a citizen - in short, Independent Living. 

Any effective system of support will:

1. Set a fair and reasonable budget that is sufficient for Independent Living
2. Ensure that the budget is managed by the most appropriate person or organisation
3. Enable people to make the best possible use of the agreed budget
4. Continue to share learning, improve practice and change as circumstances demand

Personal budgets were developed to provide a new framework for support. The older system was very narrow, most decisions were made at too great a distance from the individual and support services were too inflexible. This is just one of the reasons why far too many people with complex needs have been unable to achieve Independent Living and have instead been forced to live in inappropriate institutional care settings, often far from their homes, or have been unable to access community resources close to home. 

Personal budgets were developed to replace this older system, but it is still at a very early stage of development in the England and practice varies. In my experience public officials who are implementing personal budgets often have the best of intentions, however in the rush to implement these new systems some important mistakes are made. Culture and values are hard to change; so when there has been no change in thinking then any new systems is implemented in ways that are often inadequate and sometimes even damaging.

What follows is a description of what good practice in personal budgets should look like.

1. Agreeing the budget

Any budget that is agreed must be sufficient to enable the individual to achieve Independent Living or active citizenship. The UN Declaration on the Rights of Person with Disabilities makes this very clear and for anyone with complex needs, where eligibility for support cannot really be questioned, then the purpose of that support is also very clear.

Good practice in Personal Budgets demands that the agreed budget is sufficient to enable the individual to achieve active citizenship.

For someone who does not have a budget agreed already then it is sometimes useful to provide an estimate, sometimes called an ‘indicative budget’ before planning for support begins. This is useful insofar as it provides guidance to those developing a suitable support service on the level of funding that is likely to be agreed.

However the use of such any indicative budget is not always useful nor is it always necessary.

In order to identify this initial estimate local authorities have been using various systems that go under the generic title of a ‘Resource Allocation System’ or RAS. Insofar as any RAS provides this provisional budget, quickly and with undue fuss, this is good practice; for it can help disabled people and their allies plan with greater realism and creativity.

However it is not essential to use a RAS if a budget is already in place or can be agreed by other means. In particular, for people with very complex needs, it is unlikely that any standardised system will be sensitive enough to people with the greatest needs. 

It is vital to remember that an indicative budget is not the actual personal budget. The personal budget can only be agreed after there has been an opportunity to develop a suitable plan and where both sides agree that the budget is sufficient to meet the individual’s needs.

It may useful to outline some of the worrying forms of bad practice that have emerged over the last few years:

1. It is bad practice to apply the RAS when a reasonable budget has already been agreed or where the RAS is unlikely to be sensitive enough to the individual’s needs.
2. It is bad practice to treat the provisional figure as if it were the final figure. None of the RASs available (as developed by agencies such as FACE, OLM and In Control) provide a system that is 100% reliable. Nor is it likely that any such system could ever capture the needs of people with the most complex impairments.
3. It is bad practice to demands significant amount of time from people, families and professionals in completing multiple forms and answering multiple questions. Many of the current RAS systems seem unduly complex and there is no empirical evidence that justifies this complexity.
4. It is bad practice to build into the RAS any assumption that family or friends will automatically provide support to the disabled person. Public bodies are not entitled to assume that any level of support for an adult, wherever they live, will be provided by family or friends.

Often Personal Budgets will be defined on an annual basis and will be reviewed annually. However in areas of best practice there will be much more awareness of the advantages of taking a more considered approach to the timing of funding: there will be more use of grants, short-term funding but also, where appropriate, longer-term funding agreed - when needs are unlikely to change quickly.

2. Agreeing the budget-holder

Until recently it was common practice for public bodies to either retain control of budgets or to pass control to a service provider, often under inflexible contracts. The only exception to this was that some people took direct control of their budget using a Direct Payment. Since the development of personal budgets it has been recognised that there should in fact be a full range of options available for managing budgets and that the fundamental duty of the public body is to agree the most appropriate person or organisation to manage the budget. 

In outline there are at least 6 possible budget-holders; however this is only an outline and there is no reason to exclude any system of management from consideration. Budgets can be managed by:

1. The disabled person themselves
2. Their representative, ally, friend or family member (This can be, but does not need to be, their attorney or guardian as fixed by the Law.)
3. A Trust set up to protect the interests of the disabled person
4. An organisation or professional who will manage the funds on the person’s behalf
5. An organisation that will provide support and services to the person (When an organisation takes on this role it is also possible for them to protect the individual’s budget by managing it in what is called an Individual Service Fund.)
6. The local authority and an agreed social worker

The important question to resolve is what is the right system of control, in the current circumstances. It was inappropriate in the past that control always sat with the public body, however it is also inappropriate to say that control should always sit with the disabled person. There are many circumstances that will require one of the other options and this will be particularly true for people with significant cognitive impairments.

Public bodies have a duty to ensure that every legal and practical system of control is available and to ensure that the point of control is agreed as part of the plan and that this can be reviewed and changed. There is no good reason to artificially exclude any option, nor is there a good reason to promote one option over any other.
What is important is to make the right decision in the circumstances and make that decision with the agreement of the disabled person or their representative.

3. Agreeing how the budget is used

All the evidence on the success of systems of personal budgets suggests that it is the additional flexibility of how budgets can be used that brings the greatest benefits for the individual and for the efficient use of resources. However making the change to a more flexible system of funding has been one of the greatest challenge for public bodies.

There has been a worrying tendency for public bodies to place undue burdens and restrictions on how the budget is used, despite the fact that these burdens and restrictions make it harder for the budget-holder to achieve the best value from their limited budget. 

When public bodies impose rules and restrictions upon themselves, or those they are working with, then the Law says they are ‘fettering their discretion’ and are acting inappropriately. In other words if a rule is damaging or unhelpful it cannot be justified - even it has been agreed by the public body.

Moreover, as I have set out above, if the public body has done its duty and agreed the most appropriate person to be in control of the budget then it should be the case that the budget-holder, if they are fulfilling their duties to the person, is already the most appropriate to decide how resources are to be used. In other words, in general, they would know better than the public body what is most appropriate.

Unfortunately, moving to a more empowering and flexible system demands a significant change in culture and thinking and certain patterns of bad practice seems to have become endemic:

1. It is bad practice to limit expenditure to certain kinds of services - people are entitled to their budget because of their need for support in achieving independent living - there is no reason why that budget cannot be spent on whatever best meets that goal.
2. It is bad practice to limit expenditure to items previously specified in a support plan - plans are projections, they should not limit how budgets are used. The budget-holder should be able to use their discretion and change how they spend their budget in the light of current circumstances.
3. It is bad practice to claw back money that is unspent at the end of a year - a good budget-holder will vary the pattern of expenditure over time and should not be penalised for holding back money from one year to the next. In fact clawing money back is most likely to encourage wasteful expenditure and will make support arrangement less robust.
4. It is bad practice to demand itemised accounts of expenditure - the budget-holder may need to keep appropriate records, however these records are their own and there is no need or value in receipts being passed on to the public body. This is a wasteful and ineffective control system.

4. Maximising Independent Living

The responsibility of public bodies for enabling people to achieve Independent Living does not end with the management of a Personal Budgets. Public bodies also have wider responsibilities to the whole community and especially to those people with whom they have agreed a budget.

In outline it is important that public bodies:

1. Provide people with information, peer support and referrals to appropriate agencies, in order that people can design, develop and amend their own support arrangements.

1. Support community initiatives that prevent or reduce need and grow the connections between citizens, in order to avoid isolation and abuse.
2. Provide high quality social work services for people in urgent need of assistance or at risk of abuse or self-harm.
3. Enable people and families to share learning and innovations so that their positive and negative experiences are not lost but can be used to benefit others. 

Conclusion