Third-Party Personal Health Budgets

6th December 2023

Third-Party Personal Health Budgets or Individual Service Funds (ISFs) are a key tool for personalising care.

Author: Chris Watson

A personal health budget is a predetermined sum allocated to address an individual's health and wellbeing requirements, collaboratively planned, and approved by the individual, their representative, or, for children, their families or carers, along with the local NHS team. They are a way of repurposing NHS funds to meet citizens needs in a more adaptable manner.

Individuals can essentially choose from three options for receiving their personal health budget:

Notional Budget: The commissioner, often the NHS, holds and allocates the budget based on discussions with the individual or their representative.
Third-Party Budget: An external organisation manages the budget independently, purchasing services as outlined in the care plan to provide additional support.
Direct Payment: Funds are directly transferred to the individual, enabling them to actively engage in contracting and procuring services, promoting direct control over their care plan.

Exploring ‘Third-Party Personal Health Budgets’

This brief guide focusses upon Third-Party Personal Health Budgets which can be used to harnesses NHS funding to help citizens shape their individually tailored care and support plans, providing increased choice and flexibility in addressing assessed health and well-being outcomes.

Third-Party Budgets always involve an external organisation, independent of the individual, local authority, and NHS commissioners, taking charge of budget management. This entity is responsible for ensuring the implementation of appropriate care and support, working collaboratively with the individual and their family to realise the agreed-upon outcomes. It's crucial to note that a Third-Party Budget is distinct and different from a direct payment.

Central to the effective implementation of Third-Party Personal Health Budget’s is the emphasis on personalised care and support planning. This process, achieved through collaborative discussions involving the individual, their representative, or, in the case of children, their families or carers, alongside the local NHS team, plays a pivotal role in shaping the success of personal health budgets.

Where are they helpful?

Third Party Budgets prove invaluable when individuals:

Seek more choice in their support network but prefer not to manage a direct payment.
Desire the flexibility of support from a personalised team of care workers without undertaking employer responsibilities.
Lack the capacity to independently manage their budget.
Require specialized or highly tailored support beyond what traditional commissioned services can offer.

With a Third-Party Budget, individuals can:

Collaborate with their service provider to develop a personalised care and support plan, utilising the budget flexibly to meet assessed needs and agreed outcomes.
Use the budget for services and support from various organisations, as agreed in the personalised care plan, such as gym memberships or sessional support.
Amend and tweak their support arrangements day to day as necessary.

Examples of Third-Party Budget Providers

Organizations providing Third Party Budget services include:

Established domiciliary care services.
Organisations traditionally offering direct payment support services but expanding to employ bespoke care worker teams (acting as brokers).
Charity or social enterprise organisations.
Third-Party Budget specialist organisations employing care workers for regulated activities must meet Care Quality Commission (CQC) requirements.

Choice and control

While Personal Health Budgets, including Third Party Budgets, enhance individuals' choice and control, they do not alter the statutory duty of care that is held overall by the NHS. NHS clinicians therefore retain a pivotal role in overseeing care and support arrangements, reviewing personalised care and support plans and budgets to ensure ongoing alignment with assessed health and well-being needs and agreed outcomes.

Choosing a Third-Party Budget is a voluntary decision for eligible individuals; it's not a mandatory option. If Third Party Budget deployment is preferred, individuals should feel supported by their service provider while retaining maximum control over how the budget meets their needs. A strong relationship between the Third-Party Budget provider and the individual is crucial for successful, creative, flexible, and personalised care and support arrangements.

Support planning

A Third-Party Personal Health Budget support planning process should be carried out creatively, enabling people to identify solutions that build upon their individual strengths and harness the support that is available in local communities. People should be empowered to choose who helps them plan including family members, friends, case managers, independent brokers, or Third-Party Budget providers (or a combination).

Where Third Party Personal Health Budget holders are helping people develop their personalised care and support plan, NHS commissioning organisations need to ensure that their staff have necessary skills to understand and to offer an indicative budget and to utilise this to help assess the brokerage, care and support options that may be available. This may include developing in-depth risk assessments that are focussed upon positive risk management, utilising a person-centric approach in line with duties under the Mental Capacity Act. The finalised personalised care and support plan will always need to be approved by the NHS commissioning organisation prior to support being purchased.

A good Third-Party Personal Health Budget support planning process should therefore always:

Consider the full range of management options that are available: Be it as a direct payment, notional budget, third party budget, or a combination of these.
Be person-centred: Individuals (or their representatives) play a pivotal role in crafting their personalised care and support plan, actively participating in the decision-making process and shaping outcomes.
Feel collaborative: Agreements around health and well-being outcomes should include relevant health, education, and social care professionals.
Offer financial transparency: There should be clear communication of the sum of available funds for healthcare and support.
Ensure sufficiency: Plans should be properly costed, and budgets must be sufficient, ensuring adequate funds are available to meet agreed-upon health and well-being outcomes as outlined in the personalised care and support plan.
Allow flexibility: Empowering individuals to use the allocated funds to achieve outcomes in ways that align with their preferences, as specified in their personalised care and support plan.
Include (where relevant): The learning outcomes for children and young people with education, health, and ensure that care plans are seamlessly integrated into this framework.

Brokering and arranging care and support

The Third-Party Budget service provider should offer care and support as outlined in the personalised care plan. If needed, they may also arrange services from external providers (e.g. for training). These external services must meet high-quality standards and align with the personalised care plan outcomes. Additionally, they should also adhere to any Care Quality Commission (CQC) registration requirements if applicable.

Managing and auditing the budget

The Third-Party Budget provider should establish a dedicated bank account for the individual's budget (ideally sperate or held in a third-party wallet arrangement), sharing the bank details with NHS commissioners for payments. They should maintain a detailed record of income, support related transactions, and adhere to NHS financial audit standards.

Regular financial statements should be provided to the person, their representative, or nominee, highlighting any reserved funds for contingencies. When utilising prepaid card systems or virtual wallets, the provider must ensure that the individual retains freedom of choice and control, avoiding unnecessary restrictions on cash withdrawals and ensuring the card or wallet system is not limited to specific online marketplaces.

Recruitment

The Third-Party Budget provider should actively involve people in recruiting their personalised care team, from developing their job descriptions to participating in the selection process. Approval from NHS commissioning organisation would need to be sought for situations that involve the hiring of family members who live in the same household.

The service provider should always ensure necessary Disclosure and Barring Service (DBS) checks are completed. From a human resource management perspective, service providers should conduct regular one-on-one sessions, annual appraisals, and handle any grievances or dismissals. This support should extend into situations where the recipient or their representative is more directly involved in day-to-day care management.

Training provision

The Third-Party Budget provider should ensure that care and support workers, employed through the personal health budget, receive tailored training in line with the individual's care needs. This includes both mandatory and specialised training, including competency assessments for healthcare tasks. Ongoing supervision, competency checks, and refresher training should be managed by the service provider, following any localised policies. Training records should always be maintained and accessible upon request to both the NHS commissioning organisation and Personal Health Budget (PHB) holder.

Quality assurance

The Third-Party Budget service provider should take a proactive approach to monitoring and reviews, engaging in meetings with NHS commissioning or clinicians initially every three months and, subsequently, at least annually. These interactions aim to ensure the continued effectiveness of the third-party budget in addressing the individual's assessed needs and ensuring that agreed outcomes are being achieved. Rigorous quality assurance processes should be built, emphasising risk management, financial audit, adherence to local policies, and procedures for training and assessing competency in delegated healthcare tasks, as well as compliance with any relevant CQC registration standards.

Mental Capacity

In cases where individuals are assessed as lacking the capacity to manage their Personal Health Budget, the responsibility for decisions will initially rest with a representative appointed by NHS. The appointed representative should always consider the individuals previously expressed wishes and current feelings.

Potential representatives include:

The person with parental responsibility if the individual is under 18.
A deputy appointed by the Court of Protection for relevant healthcare decisions.
A donee or holder of a lasting power of attorney.
A person vested with an enduring power of attorney.
Someone appointed by the ICB, preferably with a close relationship to the individual.
All best interest decisions related to Third-Party Budget utilisation must be meticulously recorded and made available for review by the ICB as part of quality assurance processes

Building community-based support

There is a growing acknowledgment that a fundamental shift of attention towards understanding needs at local community level is essential if we are to build more effective neighbourhood-based models of care and support. This shift is not merely a theoretical concept; rather, it aligns with a wealth of global evidence and good practice that advocates the pivotal role of neighbourhoods, as an ideal framework for organising both mutual and professional support. Neighbourhoods, with their intimate scale and often close-knit social fabric are fertile grounds for fostering a sense of community, cooperation, and shared responsibility.

At the heart of this approach lies a recognition that by harnessing the power of neighbourhood community groups, working alongside professionals, can address interconnected challenges such as local economic development, sustainable food, energy production and improving individual wellbeing. Amplifying the role of neighbourhoods is therefore not only integral for addressing wider societal needs but can also lay the groundwork for building a wider range of locally based support options that can be funded by citizens using their ‘personal budgets’ or ‘personal health budgets’.