What we do know

A Personal Health Budget is an amount of money allocated to an individual to allow them to meet their health and wellbeing needs in a way that best suits them. The aim of personal health budgets is to improve outcomes for individuals by giving them greater choice and control over decisions relating to their care. Personal health budgets are seen as being a key part of the personalisation agenda, and also are considered as a way to further integrate health and social care. Although personal budgets in social care are well established, with direct payments being introduced in 1996; until relatively recently personal budgets in health had rarely been used by PCTs.

There are a number of different ways that a Personal Health Budget can be provided including notional budgets, third party budgets and direct payments (see below).

In 2009 the Department of Health launched a three year pilot project for Personal Health Budgets. The Department of Health had made clear in NHS Continuing Healthcare Practice Guidance (March 2010) and other Guidance which confirmed the legal position that all PCTs (including those who were not part of the pilot project) could offer notional budgets and third party budgets for healthcare. Those PCTs who were pilot sites approved by the Secretary of State under the Pilot Project could also offer direct payments for healthcare.

In referring to the Pilot for Personal Health Budgets that was launched by the Department of Health in 2009, it was stated:

“Personal budgets in health are a recent concept, and there is much we do not yet know. We anticipate that they will be more suitable for some services and patient groups than others….In addition, we do not yet know how best to implement them”

Initially there were 64 pilot sites, but this increased to 75 pilot sites implementing personal health budgets. Nine areas are also part of the 'go further faster' scheme. They are tasked with mainstreaming personal health budgets extending them from NHS Continuing Healthcare to integrated health and social care budgets.

It was announced in October 2011 that, subject to the evidence that was being obtained through the Pilot project, people eligible for NHS Continuing Healthcare would have the right to ask for a personal health budget, including direct payments, from 1 April 2014.  In addition CCGs will also be able to offer personal health budgets to others not in receipt of NHS Continuing Healthcare who they think will benefit. The right to “ask” is different from the right to “receive”, but whilst recognising this difference the Department of Health stated that the majority of people who ask for a personal health budget will receive one.

An independent evaluation of the personal health budget pilot programme was published by the Department of Health in November 20121.  The evaluation found significant improvements in quality of life and psychological well being for those using personal health budgets. It is generally recognised that one of the biggest challenges to introducing personal budgets more widely in healthcare is a cultural shift.  It was found that personal health budgets were cost effective for Continuing Healthcare and for those using mental health services. It was also identified that high value personal health budgets were the most cost effective, suggesting that personal budgets should be targeted at those with greater need.  A good practice toolkit has been introduced following the pilot project and is available online.2

What we don’t know

Whilst the Pilot Project and Evaluation has provided lots of useful information, there is still much we do not know about what the future holds for personal health budgets and CCGs.

For CCGs one of the challenges may be that personal health budgets can be used for “non conventional” Providers, and some people bought care and support services that the NHS does not offer.  CCGs are tasked with ensuring that personal health budgets are used in a way that meets the outcomes of personal care and support plans, having regard to clinical effectiveness, financial aspects and safeguarding. This may create difficulties for CCGs when personal health budgets are used, for example, for aromatherapy or reflexology particularly in terms of assessing the clinical benefits or the quality of services, but also in relation to issues of the wider public perception.

Particularly in these early days there may be legal challenges by individuals requesting personal health budgets. In particular CCGs may become involved in Judicial Review proceedings regarding their decision making process with regard to personal health budgets by individuals.

Whilst there are many positives and potential benefits of integrating and joining health and social care needs into one overall personal budget, there are concerns about the amount of bureaucracy and cost that may be required to put this into practice by merging or changing current systems. Some of the pilot sites have looked at ways to achieve this, with positive results but it still remains to be seen how this will work in practice. 

A notional budget held by the commissioner

This is where patients are aware of the treatment options within a budget constraint and of the financial implications of their choices. The NHS underwrites overall costs and retains all contracting and service coordination functions

Third party budgets

Patients are allocated a real budget which is held by an intermediary on their behalf. The intermediary helps the patient choose services within the personal budget based on the agreed general healthcare outcomes.

Direct Payments

The patients are given cash payments and expected to purchase and manage services themselves.


1.    https://www.phbe.org.uk/index.php?action=frDownload

2.    http://www.personalhealthbudgets.england.nhs.uk/Topics/Toolkit/

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