Chris Skidmore MP: Personal health budgets would be a good deal for both patients and taxpayers

Chris Skidmore is the Member of Parliament for Kingswood.  Follow Chris on Twitter.

This week saw the publication of the Government’s response to the consultation on its special educational needs and disability Green Paper. The headlines so far have focused on the rigorous screening methods that could potentially remove hundreds of thousands of children from the register who do not need to be there. However, it is the expansion of personal budgets for parents and children, reflecting the wider principles of choice, control and competition, that reflects what might be one of this Government’s greatest achievements: the personal revolution.

Under the SEN reforms, parents will be able to take charge of personal budgets for their children, allowing them to shop around for the most suitable specialist help. This is far superior to relying on monopolistic local authority provision - and will allow alternative providers to flourish, especially in the voluntary sector. Importantly, it also promises a single streamlined assessment, for an ‘Education, Health and Care’ plan, which will allow superior integration of budgets between the various services used by those with special educational needs.

We are already seeing the rise of personal revolution taking place under this Government in social care. In England, their uptake has doubled from April 2010 to March 2011, to almost 340,000 service users. The Government is committed to more: after all, the current level is still only about 35% of eligible users and carers. And although the increase in personal budgets is welcome, it has come in the form of local authority managed budgets, rather than individual direct payments, which make up only 26% of that 340,000.

So while there has been an increase in personalisation, we can go further, ensuring that individuals are really being given freedom in how they would like to use their budgets. This would involve the adoption of direct cash payments, used in Germany to encourage choice and competition as The Free Enterprise Group’s report The Social Care Market: Fixing a Broken System, demonstrates.

We need to ensure that in modernising public services, we make the best available to all. People will not put up with paying for the current levels of services if they do not think that they are good enough. The key to this is ensuring good competition between care providers, with proper information available to make informed comparisons.

The logical conclusion that the personal revolution leads to is the health service, where it is worth considering the possibility of how a system of personal health budgets, put forward by former Health Secretary Alan Milburn a few months ago, might work. This could involve a “notional budget”, where the NHS holds the money for the patient, purchasing services on their behalf; a “third party arrangement”, in which an independent organisation holds the money, or a direct payment where money is transferred directly to the patient to buy their own services. In particular, in giving people with chronic conditions such as diabetes active control over budgets, they become informed consumers who can purchase the services that are right for them. The experience of other countries is that personalisation leads to greater patient satisfaction - in the Netherlands 95% of budget holders describe the care that they buy as of ‘very good quality’. This is also a good deal for the taxpayer. The earlier those individuals can take responsibility for their health, the more effective the system will be in preventing costly, unplanned hospital admissions.

Ultimately, good public services are shaped by their users rather than by civil servants in Whitehall. The Government should push forward the personal revolution: of liberating services from local authority control, and putting them in the hands of individuals, carers, patients and parents. Individual freedom has proved the most powerful tool for human progress; and freedom cannot exist without choice.