Executive summary

This report, commissioned by NHS England North West Personalisation and Community Services Team and delivered by Community Catalysts CIC, explores opportunities, challenges and areas for improvement in the expansion of Personal Health Budgets (PHBs) within the Cheshire and Merseyside Integrated Care System. The work was conducted between November 2024 and May 2025 across five Places in the local system, involving research, data analysis, workshop and interviews with 42 local practitioners, service providers, and people who draw on personal health budgets.

While the work was commissioned and undertaken before the publication of the NHS 10 Year Plan, the insights and recommendations will support the North West region in delivering the new commitments to significantly increase uptake of personal health budgets nationally to 1 million by 2035.

Personal Health Budgets (PHBs) help individuals manage their health and care needs by providing greater choice and flexibility over how their assessed needs are met, through an individually agreed personalised care and support plan. PHBs can be managed as a Notional Budget (NHS holds the money), Third-Party Budget (independent organisation manages the money), or Direct Payment (individual manages the money directly).

Certain groups of people have a legal right to a PHB, including those eligible for NHS Continuing Healthcare (CHC), Children’s Continuing Care, individuals under Section 117 of the Mental Health Act (1983), and people who use a wheelchair.

The process for all PHBs involves six key steps: clear information, understanding needs, determining budget, developing a personalised plan, organising care, and monitoring/reviewing.

There is strong local commitment to PHBs in Cheshire and Merseyside ICB, with relatively strong local performance in terms of number of PHBs, compared to national implementation across England.

Key findings

Positive impacts

• PHBs improve people’s (patient) experience and offer value for money, with a local analysis showing Direct Payments saved £291,442 per year compared to agency care for 62 PHB holders.
• PHBs enable increased choice and control, allowing individuals to choose other options when traditional care services are not meeting their needs or not working for them. They enable access to a wider range of flexible services, sometimes including employing family members, which can work well when people need support from people who know them well and when family members can’t take other employment due to their caring commitments.
• PHBs support people to live “good lives” through activities, therapies, and relationship-based care. The presence of strong, valued advice, support, and brokerage services from third-sector organisations, along with independent advocacy (like in Sefton and Liverpool), significantly enhances PHB effectiveness and confidence among people who use a PHB and professionals. Creative, hybrid PHB approaches, combining different management methods, are also noted as successful.

Identified challenges

• Despite successes, several areas need improvement. Notional Budgets often do not offer true choice and control, frequently defaulting to standard commissioned care services without fully adhering to PHB principles and limiting provider choice due to systemic ties to contractual frameworks and provider lists.
• Restrictions on choice and control are also observed with Direct Payments, where individuals are sometimes told they must use CQC-registered agencies, despite this being at odds with DP legislation.
• There’s a misconception among professionals that CQC registration is the sole indicator of quality and safety for all care or support services, leading to a bias against non-CQC registered, but potentially effective, wellbeing services and/or care services that are exempt from CQC registration.
• Employing staff (PAs) via PHBs presents challenges due to the workload, difficulties in recruitment and retention (often linked to low pre-defined pay rates), and lack of structured career paths or flexible training.
• An “unbalanced culture of mistrust” sometimes exists among professionals towards families rather than equally scrutinising care providers.

Opportunities and recommendations

To further scale and improve impact of PHBs, the following actions are recommended:

• Improve information and advice by providing clear, accessible and comprehensive information at early stages, showcasing all PHB options (including Direct Payments, Notional Budgets, and third-party budgets) through real-life stories. Consider peer support programmes and increase knowledge among clinical staff. Expand successful advocacy models.
• Review Notional Budgets through a systemic review to ensure they align with the six PHB principles, clearly distinguishing them from commissioned services and allowing for user scrutiny of invoices. Adapt IT systems to accurately record directly commissioned care services.
• Widen service and support choices by broadening the focus beyond purely clinical tasks to include wellbeing outcomes, accessing diverse commissioning routes and using spot purchasing for Notional Budgets. Develop clearer guidance on using sole traders and approaches to small equipment budgets.
• Maximise creative approaches by actively promoting successful hybrid PHB arrangements and exploring opportunities for budget pooling and more extensive use of third-party budgets.
• Enhance Personal Assistant (PA) recruitment and development by using more ‘relationship based’ methods. Develop creative routes for PA career paths and explore a joined-up, flexible approach to PA training across the ICB area. Conduct a study on PA pay rates and conditions to improve recruitment and retention.
• Address culture of mistrust by implementing training that incorporates the voice of people who hold a PHB.
• Evidence financial benefits by undertaking work to collect local and national evidence of the cost-benefit of well-implemented PHBs. Include economic modelling to influence investment in PHB support structures.