An Individual Budget is a system for organizing individualized funding where the person is told, up-front, how much they are entitled to spend. It was innovation because previous forms of individualised funding (at least in the UK) were only calculated after a plan had been developed and costed. It is a needs-based approach to setting budgets, instead of a service-based approach.
Before the development of Individual Budgets resource allocations were implicit rather than explicit. Even when someone wanted to manage their individualized funding as a direct payment they would find that their budget could only be calculated on the basis of a care plan which would specify hours of support and salary levels.
The disadvantages of this service-based approach to budgeting were:
On the other hand when people use Individual Budgets there seem to be several benefits:
Of course these benefits depend upon intelligent and coherent application of the concept, not just using the name ‘Individual Budget’ in particular there have been examples of:
Some of these problems of implementation are created by the inadequate legal and policy framework for Individual Budgets. It is not clear that Individual Budgets can be used as a coherent tool for promoting citizenship and improved outcomes unless there is a clear legal framework to underpin their application and the development of the necessary resource allocation systems that are required to make them work.
Note on terminology
In the UK the term Individual Budgets has been confused somewhat by the Individual Budget Pilot Programme which took over the concept of an Individual Budget from the In Control project and then redefined it to make its integration of diverse funding streams its defining property, and forcing In Control to relabel ‘Individual Budgets’ as ‘Personal Budgets’ in all their literature. Had the government been successful in integrating different forms of individualized funding in this way this additional defining criteria may have had some merit, but given the difficulties government found then this distinction become somewhat barren. The Centre for Welfare Reform therefore uses the original term, with its original meaning, while also demonstrate how funding integration could be made to work in practice.
The publisher is The Centre for Welfare Reform.
Individual Budget © Simon Duffy 2010.
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