A personal budget is an amount of money identified to deliver some of the provision set out in an EHC plan. A direct payment is one way of managing that budget, where money is paid to a parent, young person or nominee so they can arrange agreed support themselves. Personal budgets are optional and are usually requested when an EHC plan is being drafted or reviewed.
Direct payments do not mean families can use EHC plan funding for anything they choose. They must be linked to agreed provision in the plan and should support the child or young person’s education, outcomes and access to learning.
A personal budget is an identified amount of funding connected to provision in an EHC plan. It is personal because it relates to the individual child or young person’s assessed needs and outcomes.
This is where confusion often begins. A personal budget is not simply “extra money” given to a family. It is a way of showing how some provision in the plan could be funded and arranged. The key question is not “How much money can we get?” but “What provision is needed, and is a personal budget a sensible way to arrange it?”
For example, an EHC plan might include specialist therapy, assistive technology, tutoring, support around independence, or a particular intervention. In some cases, the local authority may arrange that provision directly. In other cases, the family or young person may want more involvement in how the support is secured.
A personal budget can sometimes help because it makes the arrangement more transparent. Families may be able to see what funding is attached to a specific part of the plan and how that support will be organised.
However, not every part of an EHC plan will lend itself to a personal budget. Some services are commissioned as part of wider local arrangements. Some provision may already be built into a school or college offer. Some funding may be difficult to separate from a larger service. This is why personal budgets need to be considered case by case.
A direct payment is one way of managing a personal budget. With a direct payment, the money is paid directly to the parent, young person or another agreed person so they can arrange the agreed support themselves.
This gives more control, but it also creates more responsibility. The person receiving the direct payment may need to manage payments, keep records, arrange providers, evidence how money has been used, and make sure the provision matches what was agreed.
There are four broad ways a personal budget can be managed:
This distinction matters. Some families ask for a personal budget because they want more say, but they may not want to manage invoices, contracts or records themselves. A notional or third-party arrangement may sometimes provide flexibility without placing the full administrative burden on the family.
At Navigate SEND, we often find that families do not need the most complex arrangement. They need the most workable arrangement.
Personal budgets are usually requested when a local authority is preparing a draft EHC plan or when an existing EHC plan is being reviewed or reassessed. This means they can become relevant at different stages.
A family might ask about a personal budget when:
It is often better to raise the idea early rather than after the final plan has been issued. If the personal budget is agreed, the details should be reflected in the EHC plan, including what the budget is for, how it supports outcomes, and how it will be managed.
Families do not have to ask for a personal budget. It is optional. Some families prefer the local authority, school or college to arrange provision directly. Others want more involvement because they have identified a provider, therapy, intervention or arrangement that better fits the child or young person’s needs.
A useful starting question is:
“Which parts of the provision in this EHC plan could realistically be arranged through a personal budget or direct payment?”
This keeps the conversation focused and practical.
The legal framework for personal budgets is set out in the SEND Code of Practice: 0 to 25 years.
A personal budget should be linked to provision in the EHC plan. In everyday terms, it should help secure support that has been agreed as necessary for the child or young person.
This might include some specialist provision, therapy, equipment, support linked to education, or services that help the child or young person access learning. However, the provision needs to be clearly described in the plan. If the plan is vague, it becomes harder to know what the personal budget is actually for.
For example, “access to therapy as required” is hard to cost and manage. A clearer description would explain the type of therapy, frequency, purpose, provider expectations and intended outcomes.
Direct payments cannot usually be used simply to fund a school or college place itself. They are about agreed provision, not buying a placement. They also need to be workable for the setting. If a direct payment would fund goods or services delivered in a school, college or early years setting, the setting’s agreement is important.
This is one reason direct payments can be more complicated than they first appear. The idea may sound simple: “We arrange the support ourselves.” In practice, the local authority, family, provider and setting all need to understand how the arrangement will work.
Personal budgets and direct payments are meant to support flexibility and choice. In practice, families can still experience confusion, delay or disagreement.
A common difficulty is that families are not always given clear information about what personal budgets are, what can be requested, or how a decision will be made. Some local authority Local Offer pages explain this well. Others are harder to navigate.
Another difficulty is that direct payments can transfer administrative pressure to families. If a family has to pay a provider and then wait to be reimbursed, the arrangement can become stressful and financially risky. Recent Ombudsman reports on personal budgets (PDF) have highlighted cases where payment arrangements were unclear, delayed or not working properly, leaving families chasing funds or fronting costs for provision.
There is also a wider SEND context. Recent national reporting has highlighted families’ worries about delays, stretched services, inflexible systems and the fear that support may become harder to access. Personal budgets can be part of a more flexible approach, but they only help if the plan is clear, the funding is sufficient and the arrangement is manageable.
This is why a personal budget should never be treated as a shortcut around careful planning. It should be a practical way of securing agreed provision, not another layer of uncertainty.
Before asking for a personal budget or direct payment, it helps to check six things.
First, is the provision clearly specified in the EHC plan or draft plan? If the plan does not clearly say what support is needed, it will be harder to cost and arrange.
Second, what outcome is the provision meant to support? The budget should connect to something meaningful, such as communication, access to learning, emotional regulation, independence, mobility, participation or preparation for adulthood.
Third, who will deliver the support? If the family has a provider in mind, it helps to know whether that provider is available, suitably qualified, affordable and able to work with the setting.
Fourth, where will the support happen? If it will happen in school, college or an early years setting, the setting needs to understand and agree how this will work.
Fifth, who will manage the money and paperwork? A direct payment can give control, but it may also involve records, invoices, monitoring and communication with the local authority.
Sixth, what happens if the arrangement stops working? Families should know how the arrangement will be reviewed, how problems will be raised, and whether a different method, such as a notional or third-party budget, could be used.
A good request does not need to be legalistic. It should be clear, practical and linked to the child or young person’s needs. For example:
“We would like to discuss whether a personal budget could be used to arrange the occupational therapy provision specified in the draft EHC plan. Please confirm what information you need, what options are available, and whether this could be managed as a direct payment, notional budget or third-party arrangement.”
This kind of wording keeps the conversation focused on provision, outcomes and workable arrangements.
No. A personal budget is the identified funding linked to provision in an EHC plan. A direct payment is one way of managing that budget, where the money is paid to the parent, young person or nominee so they can arrange the agreed support.
Usually no. Direct payments are not used simply to fund a school or post-16 placement. They are linked to agreed provision in the EHC plan, not the general cost of a placement.
No. A direct payment is only one option. A personal budget can also be managed by the local authority, school or college as a notional budget, by a third party, or through a combination of arrangements.
The most common times are when a draft EHC plan is being prepared or during a review or reassessment of an existing EHC plan. It is usually best to raise the question before arrangements are finalised.
Ask for the reasons in writing and ask what alternative arrangements could provide similar flexibility. It may still be possible to personalise provision through a notional budget, third-party arrangement or clearer wording in the EHC plan.
If you are trying to work out whether a personal budget or direct payment could help secure provision in an EHC plan, Navigate SEND can help you clarify the options, organise the evidence and frame a clear request to the local authority.