Catherine NeedhamThe introduction of individualised budgets, for health care as well as many other services, has been lauded for improving outcomes, enhancing rights, having an educative function, and addressing market failures. Catherine Needham investigates these claims and concludes that personalised budgets can be viewed as an effective tool to stimulate change for some service users.

Where once the state would have given us a service, it increasingly gives us a budget and tells us to buy what we think will best meet our needs. This is most evident in social care where older and disabled people have access to a real or notional budget from which to purchase personalised support. It can also be seen in the introduction of personal health budgets into the NHS. The Local Housing Allowance for private tenants and pilots of personal budgets for rough sleepers indicate a further shift in this direction.

Advocates of individualised budgets make many claims about their benefits. This week, the Centre for Health and the Public Interest (CHPI) released my analysis examining four of these claims (individualised budgets improve outcomes; they enhance rights; they educate citizens in financial literacy; they address market failure). There are other claims made about the capacity of individualised budgets to save money or build social capital. However it can be argued that both of these are means to achieve the ends set out here. The key claims are:

1.       Individualised budgets improve outcomes for individuals

There is a growing body of evaluative data from health and social care indicating that people do derive wellbeing benefits from holding a personal budget to make care choices, particularly where that money is held as a direct payment (Forder et al, 2012; Hatton and Waters, 2013). Some of this evaluative data comes from people who were early adopters of the policy and the extent to which this is generalisable to others is contested. Evaluations also highlight the process and bureaucracy surrounding budget allocations as a barrier to people achieving the improved outcomes.

2.       Budgets extend choice and control to citizens, which they should have as a matter of right

Within social care, people who are now making use of personal budgets have more choice over how they receive personal care, as well as how they spend their days, issues on which they can reasonably expect to have autonomy. Within the health sector, the rise of expert patient programmes highlights a growing confidence that there are a range of health conditions on which patients have a normative claim to expertise and autonomy.

However, whilst personal budgets enhance the rights of patients and service users in taking control of their care, the exercise of this right depends heavily on equity of access. Inequities and barriers to access have not been created by personal budgets, but patterns in the take-up rate of direct payments in social care indicate that marginalized groups are continuing to be excluded.

3.        Budget-holding has an important educative function for individuals

A feature of welfare reform over several decades has been the encouragement of individual financial literacy and responsibility with the avowed aim of incorporating people into a common citizenship (Finlayson, 2009). Efforts to give citizens more direct control over financial resources through personal budgets could be seen as an extension of this educative function. However there is very little support for the claim that the use of individualised budgets – across a range of sectors – improves financial inclusion and financial literacy. The notion that citizenship is enhanced by getting welfare recipients to frugally eek out resources is a troubling one.

4.       Budgets correct system-level failings in public services. 

Personal budgets are seen as a way in which individuals can tackle some of the many limitations of existing social care provision, whether it is risk-averse professionals limiting people’s choices, large block contracts proving too restrictive to meet people’s support needs or private companies providing a very poor standard of care. The need for a system wide fix is very apparent in social care, although much less so in health (despite what the current government’s NHS reform agenda would suggest).

However the market power of individual budget holders is an inadequate force to challenge the systemic failings of social care provision. The existence of a large bloc of self-funders of care –  i.e. those who do not meet local authority criteria on level of need or lack of means –  has not led to the emergence of affordable, good quality care for older people.

In conclusion, rather than seeing personal budgets as a way of giving people leverage to fix the problems of the social care system, they can be viewed as an effective tool to stimulate change for some service users. Mainstream benefits may be best harnessed through focusing on the relational aspects of support planning, drawing on the evaluation findings about the value people derive from talking at length to a professional or support planner about their capabilities and aspirations. However the implementation of individualised budgets in times when austerity so dominates the welfare terrain makes it doubtful that these relational benefits can be sustained beyond the scale of (usually well-funded) pilots.

Read CHPI’s new analysis The Boundaries of Budgets -  why should individuals make spending choices about their health and social care’ by Dr Catherine Needham. 

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About the Author

Dr Catherine Needham is Senior Lecturer of Public Policy and Public Management in the School of Social Policy at the University of Birmingham. / @DrCNeedham