Report 37: Personalisation, productivity and efficiency

Impact on costs

'More creative and flexible use of funds can result in an increase in hours per pound when compared with local authority or independent agencies' (7)

Some evidence suggests that if people have choice and control over their care and support, most commonly through the use of personal budgets and direct payments, then this can potentially result in efficiencies such as waste and overhead cost reduction, improved value for money and better outcomes for both people who use services and their carers.

There is increasing evidence from the independent provider sector and from micro services that local authority commissioning practice is not yet facilitating the type of market development and diversification needed for personal budgets to be used effectively and efficiently. The voluntary sector is providing some evidence on providing efficient and cost effective services for people using a personal budget, but their market position is difficult to maintain (8, 9, 10, 11, 12).

The 2006 Audit Commission's report on direct payments and the costs and benefits of choice said that 'the key determinant of any potential savings is the trade-off between the price set by local authorities for direct payments and the additional costs of providing them. The critical variables are the number of clients using direct payments and the average number of hours in direct payment care packages' (13). The Audit Commission's 2010 survey on personal budgets said that:

Outcome-based, user-directed, flexible approaches to commissioning services, rather than rigid 'time and task' delivery models, could result in greater efficiency. Electronic monitoring and scheduling of home care can support this.

A CSED evaluation showed that 'the implementation of an automated system for the monitoring and scheduling of time spent by home care workers providing care to services users' could result in the following efficiencies:

• reduces laborious manual checking of time sheets by managers
• automates invoices and payments, improving cash flow and reducing provider costs
• gives options to reduce service volumes and costs, or purchase or provide more service for the same cost
• benefits lead to improved reliability and quality of service, with more accountability and flexibility for service users. (15)

However, service users' ability to use their personal budgets to purchase better value care and support can be limited by their local social care and support market as well as their personal budget amount.

• Case study:  A user-directed approach to commissioningOpen

  The Lancashire County Council and Care UK pilot of a user-directed, flexible approach to commissioning has received extremely positive initial feedback. Lancashire is now able to buy care in a more efficient way, which gives value for money. As service delivery is no longer time/task based, citizens are getting more direct care time, as spare time after key outcomes have been met is now 'banked'. This spare time, rather than being lost, can now be used by people who use services  to meet additional personal outcomes or transferred to other service users where a review indicates that the time allocation can be reduced. (16)