Roll out personal budgets for allocating spend of public money, says new report

Proceed but with care on personal budgets, says think tank

Over a million people will spend public funds on their own behalf through a personal budget, according to a new report, “Proceed with caution: What makes personal budgets work?” from the public services think tank Reform.

In services like the NHS, the personal budget could reach £20,000 per year per person. The think tank supports the wider use of personal budgets but warns that only the most rigorous evaluation will ensure value for money and high standards of service.

Personal budgets give patients and other public service users freedom over how to spend an allocation of public money.

Widely used in the NHS and social care, their use is increasing. Pilot schemes have given personal budgets to unemployed young people, mental health patients and ex-offenders. For example, to improve rehabilitation, the Ministry of Justice gave money to people released from prison which was then spent on college fees, computer courses or trade vehicle car insurance.

The Reform research finds that personal budgets have been a good tool for tailoring public services to the needs of individual users.

The report’s authors, Claudia Martinez, Research Manager and Josh Pritchard, Researcher call for the Government to tread carefully and to make sure that the impact and value for money of personal budget schemes is properly assessed. 

The evaluation of personal budgets so far have measured impact on quality and life and autonomy but not value for money. For example, a review of personal budgets in mental health found that only 13 per cent of trials looked at cost-effectiveness.

Pilots have tended to be small scale and limited to specific local areas. Pilot schemes have been bolstered by additional training and financial incentives, usually withdrawn once the pilot is complete, potentially skewing the results.

The best example of evaluation came from NHS England’s health pilot scheme, which ran between 2009-12, across a large area and focused on cost effectiveness as well as quality of care. Reform is calling for the Government to apply the NHS’ rigorous method of evaluation to all other areas where personal budgets are piloted. 

Report co-author, Claudia Martinez said:

“Government should proceed with the roll out of personal budgets, but we urge more care. Introducing better standards for measuring their impact and value for money will deliver better results for both users and tax payers alike.”

The report also shows:

• Around 700,000 people have some form of personal budget, which the think tank expects will increase to almost a million by 2024, in health and social care alone. Support for the further roll out of personal budgets is clear, with the Department of Health and Social Care recently consulting on offering the schemes to new groups, such as those leaving the Armed Forces.
• No single figure for the total amount spent via personal budgets is available, but an average Personal Health Budget can total £20,000 a year and 15.4 million people in England – over a quarter of the population – have a long-term condition which could make them eligible for one in the future.

“Over a million people will spend public funds on their own behalf through a personal budget” –  targets for 2024 are  200,000 to  350,000 in the NHS, plus  10,000 for NHS for maternity care, plus  647,000 from local authorities for social care.

“In services like the NHS, the personal budget could reach £20,000 per year per person.” – FOI requests by Pulse magazine revealed a total spend in 2014/15 of £4.15m on 205 personal health budgets across 5 Clinical Commissioning Groups = £20,243 per person.

“For example, a review of personal budgets in mental health found that only 13 per cent of trials looked at cost-effectiveness.” Taken from studies published in the Journal of Social Work, referenced on page 15 of the report.  

“Around 700,000 people have some form of personal budget” – 40,344 from NHS for healthcare and 10,000 from NHS for maternity care, plus 647,000 (p.30) from local authorities for social care. 

“15.4 million people in England – over a quarter of the population – have a long-term condition which could make them eligible for one in the future” – Personal health budgets are being used to assist people with long term health needs. As context for the scale of long-term health needs in the UK, 15.4 million people (p.13) suffered from at least one long-term health condition, accounting for 70 per cent of the health and social care budget. 

Reform is an independent, non-party, charitable think tank whose mission is to set out ideas that will improve public services for all and deliver value for money.