Financial management of personal budgets Challenges and opportunities for councils Local government, October 2010
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
3Financial management of personal budgetsAudit Commission
4 Summary
5Financial management of personal budgetsAudit Commission
6 Recommendations
7Financial management of personal budgetsAudit Commission
8 Checklist for councils
9Financial management of personal budgetsAudit Commission
10 Checklist for councils
Introduction
12 Introduction
13Financial management of personal budgetsAudit Commission
Chapter 1
15Financial management of personal budgetsAudit Commission
16 Making the transition
17Financial management of personal budgetsAudit Commission
18 Making the transition
19Financial management of personal budgetsAudit Commission
Chapter 2
21Financial management of personal budgetsAudit Commission
22 The financial implications
23Financial management of personal budgetsAudit Commission
>>
Case study 1
24 The financial implications
25Financial management of personal budgetsAudit Commission
26 The financial implications
>>
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
27Financial management of personal budgetsAudit Commission
28 The financial implications
29Financial management of personal budgetsAudit Commission
30 The financial implications
>>
Case study 3
31Financial management of personal budgetsAudit Commission
Chapter 3
33Financial management of personal budgetsAudit Commission
34 Council commissioning strategies
35Financial management of personal budgetsAudit Commission
36 Council commissioning strategies
37Financial management of personal budgetsAudit Commission
>>
Case study 5
38 Council commissioning strategies
39Financial management of personal budgetsAudit Commission
40 Council commissioning strategies
Chapter 4
42 Governance arrangements
43Financial management of personal budgetsAudit Commission
>>
Case study 6
http://www.in-control.org.uk
44 Governance arrangements
45Financial management of personal budgetsAudit Commission
46 Governance arrangements
47Financial management of personal budgetsAudit Commission
Conclusion
49Financial management of personal budgetsAudit Commission
Appendices andreferences
51Financial management of personal budgetsAudit Commission
52 Appendices and references
If you require a copy of this document in an alternative format
or in a language other than English, please call: 0844 798 7070
If you require a printed copy of this document, please call: 0800 50 20 30 or email: [email protected] document is available on our website.
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]
© Audit Commission 2010Design and production by the Audit Commission Publishing Team.Image copyright © Third Avenue
mailto:ac-orders%40audit-commission.gov.uk?subject=Print%20Copy%20Requesthttp://www.audit-commission.gov.uk/mailto:nationalstudies%40audit-commission.gov.uk?subject=National%20Studies%20Feedback
Audit Commission
1st Floor Millbank Tower Millbank London SW1P 4HQ
Telephone: 0844 798 3131Fax: 0844 798 2945 Textphone (minicom): 0844 798 2946
www.audit-commission.gov.uk
Stock code: HNR3661Price £15
10_0126
http://www.audit-commission.gov.uk/
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