Personal Budgets: the Good, the Bad and the Ugly

There has been much mention of Personal Budgets within the process of the Children and Families Act.

There has also been much confusion about Personal Budgets and to be frank, the confusion looks to continue as the Code of Practice, as it stands, and the draft Personal Budget regulations, as they are, don’t really help.  So we thought we would try to answer some of the common questions being asked.

Personal budget

What is a Personal Budget?

A Personal Budget will be the amount of funding a child or young person will receive to cover the full cost of the services set out in their Education, Health and Care Plan.

What is a Direct Payment?  Are they the same as a Personal Budget?

Direct Payments will come into play if any part of that Personal Budget is paid directly to the child, young person or their parents (acting on behalf of the child or young person).  The Direct Payment does what it says on the tin – a direct payment to the family.

Will I be able to use my Personal Budget to buy from any provider I choose?

Personal Budgets will not be offered to everyone for every service they require.  There has been much speculation about parents being able to use a personal budget to pay for the therapist of their choice, rather than having to use the LA or School funded therapist but unfortunately, the reality doesn’t match up to the aspirational Green Paper.  The Personal Budget regulations state:

- If parents being given money to buy the provider of their choice has an adverse impact on other services which the local authority provides or arranges, then the LA do not have to provide a Direct Payment.  They have to provide the service/provision but not via a Direct Payment to the family but via the service they already commission.

- If it is cheaper for the Local Authority to buy the provision (e.g. the therapist), than for the family to buy it, then the LA do not have to provide a Direct Payment as it is not an efficient use of available resources.  Again, the service has to be provided but the Local Authority can choose who provides it.

What can I spend my Personal Budget or Direct Payment on?

The Children and Families Act, the Personal Budget Regulations and the Code of Practice do NOT give a description of the provision to which personal budgets and direct payments may (and may not) relate.  So the dilemma facing all parents, local authorities and CCGs will be what can a personal budget or direct payment be spent on.  This is the big question everyone is asking – “what can we spend it on?”  Parents have asked about whether they can spend it on extra nappies – some Local Authorities have said “absolutely not – 4 a day is more than enough” (“erm, really?”), however, some have said “let’s chat about this”.

If I get a Direct Payment, how much will I get?

The local authority must ensure that the amount of the direct payment is sufficient to secure the full cost of the agreed provision.  Now this is interesting.  In Kent, when they trialed Personal Budgets for Home to School Transport, they offered it on an “as the crow flies” basis.  So if you have to go via one way systems, etc and your journey is 5 miles each way, but as the crow flies, it is 2.5 miles, you only received the “as the crow flies” payment.  This would not necessarily be sufficient to cover the full cost.

Speaking of home to school transport, there is currently a new consultation out on this.  The Consultation states that “The aim of the new guidance is to reduce prescription and allow greater freedoms for local authorities to develop transport policies that meet the needs of their areas.”

"Oh Yippee" she says in a very, very sarcastic tone!

The consultation closes on 3 June at 5pm so there is still time for you to feed in, please remember this guidance is for all home to school transport, not just SEN home to school transport.  If you would like us to look into the consultation and write a post with a few pointers for you, let us know by commenting below.

If I want to buy a service to go into the school, will this be allowed?

Direct Payments cannot be made in respect of any services which are to be used or provided in an early years setting, a school or post 16 institution without the written consent of the head teacher/principal or person occupying an equivalent position.

So is this better for our families?

Some Local Authorities are very good (yes, they are not an urban myth, some really do exist) and some CCGs are already engaging better with families to find out what they really need but unfortunately, there are many Local Authorities out there who won't have to really improve under the new legislation so why should they?  The talk of co-production and making it all "personal" seems to have disappeared.  Lots of "consultation" is in there but as we all know, there are many Authorities whose idea of consulting is to tell you what they are doing, once they have made the decision, and then don't listen to a word you've said.  Consultation and co-production are two very different things.

Have you been part of a Pathfinder and been given a Personal Budget?  Have you received a Direct Payment?  We would love to hear from you.

Useful links:

In-Control have produced lots of information about Personal Budgets and have been working extensively with the Pathfinders.  Their site has a lot of useful information.  One item that is really interesting is their graphic on "real wealth" (you can click on the graphic for more details).  This has been a real buzz word throughout the reforms.  What is the real wealth of the family?  Due to my work with Community Circles.  I am particularly interested in hearing how Local Authorities will assess the real wealth of a family.

SE7 - the largest Pathfinder within the reforms - have some really useful resources on their site about Personal Budgets, Case Studies and co-production, etc.

Debs Aspland
Follow me


  1. Sandra Ward

    I have been using Direct Payments for several years now, but it does not get any easier. HMRC brought in RTI last year which made me change to paying for payroll as it is so strict. Recently I have heard that from October 2014, if you don’t get your PA payroll into them by the last day of each month you will be fined£100! This will be added stress to many families. For example what if your child is rushed into hospital in the last week of the month and you are to busy caring for them to go home, add up hrs and send it in. I know many parents who often do not get round to doing this until the 1st or 2nd of the next month. I have been one of them!

    1. Debs Aspland

      Sandra, when you say if you don’t get it into them by the last day of each month, who do you mean? Is this your payroll?

      I think the payroll companies vary hugely. Having used DP for two of my children, we have used a payroll company but the staff turnover means that often emails bounce back or sit in an ex-employees’s mailbox for weeks – not great.

      Families need to ensure that they ask for payroll costs to be included as part of their DP. We should not be out of pocket due to having to use a service. I hear though that in some areas, families are having to pay for this themselves. It would be interesting to know what current experiences are.

    1. Thanks for your comments Nannette. SEN transport is covered on page 195 of the new Code of Practice that LAs must have regard to. You can find it below. It comes into force in September and covers 0-25 Years
      We had a post about SEN transport earlier this year
      IPSEA also have useful advice about SEN transport

      Hope that helps

We LOVE to hear what you think... please take a minute to add your views here, so your comment is seen by all!

This site uses Akismet to reduce spam. Learn how your comment data is processed.