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Working with a Personal Budget

A Personal Budget is an amount of money identified by the Local Authority (LA) to meet a child or young person’s individual assessed needs for support as set out in an Education, Health and Care (EHC) plan where the parent or young person is involved in securing that provision.

Stoke on Trent Local Authority has a policy on Personal Budgets that sets out a description of the services that currently lend themselves to the use of Personal Budgets, how that funding will be made available, and describes the decision-making process. 

Please be aware that a Personal Budget cannot be used to purchase a place at a school or other setting. 

This policy can be found in the documents section on the right of the page.

What is a Personal Budget?

A Personal Budget is a clear and transparent description of the resource required to meet the assessed needs of a child or young person as set out in an EHC Plan.  The EHC Plan identifies how services are being funded and how these budgets will be managed.

A Personal Budget can be used flexibly to enable more choice and control over:

  • when support is provided;
  • how support is provided;
  • who provides it.

The Local Authority welcomes enquiries about Personal Budgets and is looking for innovative ways in which a Personal Budget can be used to support children and young people with Education, Health and Care Plans.  A Personal Budget may be of particular interest and benefit to young people who will soon be accessing adult services.   A Personal Budget can provide more choice and control. 

Who can request a Personal Budget?

The parents of a child with an EHC Plan can request a Personal Budget.  So can a young person with an EHC Plan.  A young person with an EHC Plan can ask for their own Personal Budget after the end of the school year in which they become sixteen years old.   A Personal Budget gives the option of using the identified budget more flexibly to meet the child or young person’s identified needs.

A parent or a young person can request a Personal Budget when the Local Authority has completed an EHC Needs Assessment and confirmed that it will prepare an EHC plan.  They may also request a Personal Budget during a statutory (usually annual) review of an existing EHC plan. 

What should a Personal Budget include?

Personal Budgets should reflect the holistic nature of an EHC plan and can include funding for special educational needs, health and social care provision.

They must relate to the provision agreed in the EHC plan and be designed to secure the outcomes specified.

Managing a Personal Budget

The Local Authority might opt to issue EHC Plans that set out the cost of all the provision.  This is a personal budget in the sense that it is the resource allocated to meet the child or young person’s needs but this doesn’t mean that the parents or young people will receive a Direct Payment for any, or all, of that amount.  Usually, the Local Authority, school or other setting holds the funds and commissions the support specified in the EHC Plan so the funding allocated to an EHC Plan is notional.  Nevertheless, parents and young people should be able to see what additional support has been identified through the EHC needs assessment and planning process to meet the identified outcomes.  

A Personal Budget can be managed in different ways.

Direct Payments

This is when individuals receive the money to contract, purchase and manage services themselves.   Direct Payments are cash payments made directly to the parent or young person allowing them to purchase directly the support, services or equipment they require.   Direct payments do not affect entitlement to benefits.

Notional Budgets

A notional budget means that the Local Authority retains the money and buys or provides the agreed support on behalf of the child or young person.   The responsibility for the employment of staff, quality and compliance, delivery, ensuring value for money, payment, risk management and ‘if things go wrong’ remains with the Local Authority and/ or the school or other setting.   Any unanticipated additional costs arising from the delivery of the provision will also be the responsibility of the Local Authority.   However, the family, child or young person will have a clear and transparent description of the resource.

Third Party arrangements

Funds (Direct Payments) are paid to and managed by an individual or organisation on behalf of the child’s parent or the young person.

A combination of the above

It is also possible to combine these arrangements.

In all cases the availability of a Personal Budget will be based on the support a child or young person needs in order for them to achieve a set of agreed outcomes and to have their assessed needs met.   In some cases an EHC Plan may not translate into a child or young person having a Personal Budget.

Setting and Agreeing a Personal Budget

During an EHC Needs Assessment or a statutory review of an EHC Plan, the request for a Personal Budget should be discussed with a representative from the Local Authority (LA) to make sure that the Personal Budget would secure the provision to meet assessed needs. 

The Local Authority will also consider if a Personal Budget is an efficient way to pay for a service, especially one it already provides.  However, if a parent or young person requests it, the Local Authority must prepare a Personal Budget that specifies the cost of the support in the EHC Plan.  If the Local Authority cannot do this, perhaps because it cannot separate out an individual amount from a block of funding, it must provide an explanation.

If a Personal Budget cannot be agreed, a Local Authority representative will inform the child’s parent or the young person of the reasons it is unable to agree.  The LA will continue to work with the parents or the young person to ensure that services are personalised through other means.  The LA will set out in writing the reasons for not agreeing and inform the child’s parent or the young person of their right to request a formal review of the decision.  The LA will consider any further representation made by the child’s parent or the young person and notify them of the outcome, in writing, setting out the reasons for its decision.

A Personal Budget can only be used when it directly relates to an EHC needs assessment.  For example, if a Speech and Language Therapist has reported that no therapy is needed for a child, it would be unlikely that the LA would agree a Personal Budget that paid for Speech and Language therapy.  A Personal Budget is an alternative way of funding provision, not of changing, increasing or enhancing it.  A Personal Budget is not extra funding.

The government says that a Personal Budget cannot be used for:

  • the funding of a placement at a school, college or other educational setting;
  • general provision for children or young people, including those who need SEN Support.

Details of the Personal Budget will be included in Section J of an Education, Health (EHC) Plan.  It will be reviewed annually with the rest of the EHC Plan.

When Direct Payments (payments made directly to the child’s parent, the young person or their nominee) are used, they must be set at a level that will secure the provision specified in the EHC Plan.   If a Direct Payment is not set at a suitable level, it must be reviewed and adjusted.

The Local Authority will provide written notice of the conditions for receipt of Direct Payments.   The child's parent or the young person will confirm to the Local Authority their decision to manage the budget and agreement of the amount.

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