The legal basis for personal budgets
Section 49 of the Children and Families Act 2014 gives parents and young people aged 16+ the right to request a personal budget when an EHCP is being prepared, reviewed, or amended. The detail is in the Special Educational Needs (Personal Budgets) Regulations 2014, which set out who can request, what the local authority must consider, and how decisions must be communicated.
The SEND Code of Practice (Chapter 9, paragraphs 9.95-9.124) provides statutory guidance on personal budgets — covering eligibility, scope, the local authority's duty to provide information, and the process for direct payments.
Personal budgets reflect a policy aim to give families control over how SEN provision is delivered. Take-up varies widely between local authorities — some have well-developed frameworks; others are reluctant and offer little information unless pressed.
The three personal budget payment routes
Direct payments
Funds paid directly to the parent or young person. Family commissions and pays for provision. Requires local authority agreement, an agreed plan for use, and record-keeping. Maximum control but maximum responsibility.
Best for: families confident managing provision (booking tutors, paying invoices), discrete services with named providers.
Notional budget
Funds held by the local authority on behalf of the family. Family chooses provision; local authority pays providers directly. No money passes through family's accounts. Less administrative burden than direct payments.
Best for: families who want choice over providers but don't want financial admin.
Third-party arrangement
Funds held by an organisation (e.g. user-led organisation, broker, charity) on family's behalf. The third party manages payments and admin. Useful where direct payment is suitable but family lacks capacity to manage admin.
Best for: families wanting direct payment benefits without admin overhead.
What personal budgets can fund — and what they cannot
Personal budgets can fund:
- Specialist 1:1 tutoring (e.g. dyslexia specialist, autism specialist)
- Therapeutic input — counselling, psychotherapy, OT, SALT, music therapy
- Equipment specified in Section F (e.g. assistive technology)
- Training for parents in specific approaches (e.g. PDA, autism)
- Short breaks and respite activities
- Specialist outdoor education and forest school
- Specific elements of social care provision in Section H
- Independent advocacy or coaching
Personal budgets cannot fund:
- School or college fees (placement is funded through the local authority naming the school in Section I)
- Top-ups to school placements
- Provision delivered as part of school's normal staff contract
- Provision the local authority has a statutory duty to make in some other way (e.g. statutory NHS provision)
- Items of general personal benefit not in the EHCP
How to request a personal budget
- 1
Identify which elements of provision are suitable
Personal budgets work best for: discrete bookable services (tutoring, therapy), equipment, parent/family training, and short breaks. Less suitable for: continuous in-school support, education delivered by school staff.
- 2
Cost the provision precisely
Get quotes from named providers. The personal budget must be sufficient to deliver the provision specified in Section F/G/H. Without precise costing the local authority will struggle to set an appropriate amount.
- 3
Submit the request in writing
Write to the local authority SEND team requesting a personal budget for specified elements of provision. Reference section 49 CFA 2014 and the SEND Personal Budget Regulations 2014. Specify which payment route (direct payment, notional, third-party).
- 4
Engage with the local authority's response
The local authority must consider and respond. If accepting, agree the amount and arrangements. If refusing, get written reasons and consider whether to challenge through complaints process.
- 5
Set up management and reporting arrangements
If receiving direct payments, you'll need a separate bank account and to keep records. The local authority may require quarterly or annual reports on how money has been spent. Set up systems early.
- 6
Review at annual review
Personal budget arrangements should be reviewed at each annual review. Has it delivered the specified provision? Should the amount change? Should the payment route change?
Personal budget request checklist
- Identified specific elements of Section F/G/H suitable for personal budget
- Costed provision with named providers and quotes
- Decided on preferred payment route (direct payment, notional, third-party)
- Written request to local authority referencing section 49 CFA 2014
- Plan for managing direct payments if chosen (bank account, records)
- Understanding of reporting and review requirements
- Annual review provides for personal budget review
Common local authority pushbacks on personal budgets
- "We don't do direct payments for EHCPs" — wrong. Direct payments are a statutory option; local authorities cannot refuse the principle.
- "There is no policy for personal budgets" — local authorities must publish a personal budget policy under SEND regulations; if not, they are in breach.
- "You cannot use personal budget for tutoring" — tutoring is commonly funded through personal budget where it is part of Section F provision.
- "There is no money available" — funds for Section F provision are budgeted regardless; personal budget moves the same money to a different commissioning route.
- "Direct payments are too risky" — proper safeguards (agreed plan, records, reporting) manage risk; the local authority cannot refuse on this basis alone.