financial management of personal budgets · financial management of personal budgets. 1. contents....

Financialmanagementof personalbudgetsChallenges and opportunities for councils

Local government, October 2010

The Audit Commission is an independent watchdog,

driving economy, efficiency and effectiveness in local

public services to deliver better outcomes for everyone.

Our work across local government, health, housing,

community safety and fire and rescue services means

that we have a unique perspective. We promote value for

money for taxpayers, auditing the £200 billion spent by

11,000 local public bodies.

As a force for improvement, we work in partnership

to assess local public services and make practical

recommendations for promoting a better quality of life

for local people.

1Financial management of personal budgetsAudit Commission

Contents

Summary 3

Key messages 3

Challenges for councils 5

Recommendations 6

Making the transition 6

The financial implications 6

Council commissioning strategies 7

Governance arrangements 7

Checklistforcouncils 8

Introduction 11

Chapter1:Makingthetransition 14

The approach to setting up personal budgets 15

Personal budgets are not just a social care issue 16

Social care reform grant 17

Progress with setting up personal budgets 17

Chapter2:Thefinancialimplications 20

Developing a resource allocation system 21

How much does a RAS offer? 25

Approaches to the technical details 28

Financial modelling 29

Value for money and efficiency savings 31

Contents >>

2 Contents

Chapter3:Councilcommissioningstrategies 32

Changes to councils’ contracting models 33

Management information is important 34

Choice and control 36

Brokerage 37

Council commissioning will need to respond 38

The use of direct payments is increasing 39

Personal budgets and the NHS 40

Chapter4:Governancearrangements 41

Measuring value for money 42

Managing risk 43

Misuse of funds 46

Role for auditors 46

Conclusions 48

Appendicesandreferences 50

Appendix 1: Research methodology 51

Appendix 2: ADASS policy advice on resource allocation 51

References 52

4 Summary

6 Recommendations

8 Checklist for councils

10 Checklist for councils

Introduction

12 Introduction

Chapter 1

16 Making the transition

18 Making the transition

Chapter 2

22 The financial implications


>>

Case study 1


>>

00 10020 40 60

Level of need (shown as a percentageof the maximum points allocation)

Weekly indicativepersonal budget £

80

50

100

150

200

250

300

350

400

450

Council 4

00 10020 40 60

Level of need (shown as a percentageof the maximum points allocation)

Weekly indicativepersonal budget £

80

50

100

150

200

250

300

350

400

450

Council 1

Council 2

Council 3


>>

Case study 3

Chapter 3

34 Council commissioning strategies


>>

Case study 5

Chapter 4

42 Governance arrangements


>>

Case study 6

http://www.in-control.org.uk

Conclusion

Appendices andreferences

52 Appendices and references

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We welcome your feedback. If you have any comments on this report, are intending to implement any of the recommendations, or are planning to follow up any of the case studies, please email: [email protected]

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SummaryKey messagesChallenges for councils

RecommendationsMaking the transition The financial implications Council commissioning strategies Governance arrangements

Checklist for councilsIntroduction Making thetransition The approach to setting up personal budgetsPersonal budgets are not just a social care issueSocial care reform grant Progress with setting up personal budgets

The financialimplications Developing a resource allocation systemHow much does a RAS offer?Approaches to the technical detailsFinancial modellingValue for money and efficiency savings

Councilcommissioningstrategies Changes to councils’ contracting models Management information is importantChoice and controlBrokerageCouncil commissioning will need to respondThe use of direct payments is increasingPersonal budgets and the NHS

GovernancearrangementsMeasuring value for moneyManaging risk Misuse of fundsRole for auditors

Conclusions Appendices andreferencesAppendix 1: Research methodologyAppendix 2: ADASS policy advice on resource allocation References

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