In services like the NHS, the personal budget could reach £20,000 per year per person. 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. 

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

Personal budgets for mental health

Personal budgets for people with mental health problems are not new, says Reform; this group have been able to access direct payments since 1990. They have been piloted through various programmes, both in social care and health, yet their roll-out has not been as widespread as with other user groups.

For England's local authorities that provided figures, only 0.4% of the community care budget was spent on direct payments for people with mental health problems: fewer direct payments than to any other group. In 2011–12, only 14.6% of eligible mental health service users received a personal budget, compared to 58.8% of people with a learning disability, 47.9% with a physical disability, and 45.2% of older people.

In contrast to social care, where personal budgets have substituted core services, in mental health they have been offered in addition to existing services.

There is some evidence, says Reform, that personal budgets in mental health can help people achieve better outcomes, with studies reporting increases in social engagement, community participation, and positive-risk taking. A report by Mind highlighted the transformative power of receiving a person budgets. Alex, who became depressed following a stroke, used his to personal budget to pay for a multitude of goods, services, and classes that helped enrich his life: from drum lessons to improve the coordination he lost after his stroke, to a SatNav to give him greater independence.

“It’s a fantastic idea, giving people the opportunity to experiment with alternative treatments and giving people a better chance to find something to suit their individual needs", says Alex. "It’s given me the chance to learn new skills and develop skills I have lost. Then I can help other people. It’s given me a purpose because people are relying on me.”

The Personal Health Budgets Evaluation also found promising evidence of cost efficiencies, showing reduced demand on community and acute health services, fewer inpatient visits, and reduced pressure on A&E and GP services for this group.

Potential issues 

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.

Previous pilot studies have highlighted potential issues with the expansion of mental health personal budgets. Some of the most widely cited barriers are "the risk-averse culture of traditional clinical practice" and a "disproportionate focus on assessment and resource allocation, rather than on empowering people to manage their budgets". 

The same report by Mind that Alex featured in also showcases concerns surrounding personal budgets. Respondents worried about their eligibility and inaccurate needs assessments, believing that such budgets wouldn't be needed if local services offered the right support. Some found personal budgets to be more burdensome than empowering - one person even described the responsibility as "scary", another deemed them counterproductive, serving only to compound existing mental health issues.

Reform's report calls 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% of trials looked at cost-effectiveness.

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.”


Read Reform's full report here.