EHCP personal budgets and direct payments: how they work

What is an EHCP personal budget?

An amount of money identified by the council to deliver provision set out in your child's EHC plan, where you or your child are involved in securing that provision. That is the definition in section 49(2) of the Children and Families Act 2014, and the Code of Practice puts it the same way at paragraph 9.95.

Two things follow from the word "must" in section 49(1). If you ask for a personal budget while the council is preparing a plan, or while it maintains one, the council must prepare one. And it is a request, never an obligation: personal budgets are optional for you, and saying no to one changes nothing about the council's duty to deliver every item in Section F (Code 9.97; CFA s.42(2)).

A personal budget is the same provision the plan already specifies, funded in a way that gives you a say in how it is arranged, and sometimes the cash to arrange it yourself. The detailed rules sit in the Special Educational Needs (Personal Budgets) Regulations 2014, and this guide cites them as "PB Regs" throughout.

When can you ask for one?

At two points in the process, set out in PB Regs reg 4(1): at any time while the draft EHC plan is being prepared, and when the plan is being reviewed or re-assessed.

In practice that means the door opens when the council has agreed to issue a plan and starts preparing the draft, which is the stage covered in the guide to applying for an EHCP. If the plan already exists, the annual review is your next opportunity, so it is worth raising a personal budget in writing before the review meeting so it forms part of the papers. The annual review guide covers the meeting deadlines and how to get your points into the review properly.

Once you request direct payments, the council must consider the request (PB Regs reg 4(2)). The council must also publish information about personal budgets, including what provision a budget may cover, organisations that can advise you, and the conditions attached to direct payments (PB Regs reg 3; Code 9.96 to 9.97). Asking for that policy document is a sensible first step, because the scope of budgets varies between councils.

The four ways a personal budget can work

A personal budget does not have to mean cash in your bank account. The Code of Practice sets out four delivery forms at paragraph 9.101, and most families end up with a mix.

The notional budget route matters more than it sounds. Where direct payments are not possible, for example because the head teacher will not agree to them being used on school premises, the Code expects the council to keep working with you and to consider a notional budget held by the school instead, so you still get a say in how the provision is arranged (Code 9.105).

What can an EHCP personal budget be spent on?

Provision that is specified in the plan. That is the anchor rule, and it cuts both ways: the budget can reach anything written into the plan as provision, and it cannot fund things the plan does not specify. A budget can include special educational, health and social care elements (Code 9.99 and 9.110), so depending on what the plan says it might cover therapy sessions, specialist tuition, a support worker, travel training or short breaks.

The hard limits for the education element are in PB Regs reg 6(2): direct payments may only be used to secure the special educational provision specified in the plan, and must never be used to fund a place at a school or post-16 institution. The Code repeats the school place ban at 9.119. School fees are placement funding, and placement is dealt with through Section I, not through a budget.

Scope also depends on how provision is funded locally. The education element of a personal budget comes from the council's high needs funding, not from the school's own budget share, and the Code is candid that the scope varies with school choice: a special school with integrated specialist provision may leave less to put into a budget, while a mainstream place may leave more (Code 9.112 to 9.113). Where direct payments are agreed, the arrangements are recorded in Section J of the plan (SEND Regulations 2014, reg 12(1)(j)). The guide to sections A to K explains where J sits alongside the provision sections it draws on.

How the amount is set

There is no national tariff and no standard figure, so treat any number you hear from another family as their council, their plan, their year. What the law fixes is a sufficiency test: the council must ensure the amount of direct payments is sufficient to secure the agreed provision (PB Regs reg 10). If the amount turns out not to be enough, it must be reviewed and adjusted (Code 9.119).

The process usually starts with an indicative figure, often produced by a resource allocation or banded funding system. The Code is clear about the status of that number: it is a planning tool to support the drafting of the plan, and the final budget must be sufficient to secure the provision specified (Code 9.102). An indicative band is not a cap, and "that is all the band allows" is not an answer the framework recognises when the plan specifies more.

The conditions on direct payments

Direct payments are the most powerful form and carry the most conditions. The main ones, each with its regulation:

• An appropriate recipient. Payments can go to you as parent, to the young person, or to a person you nominate in writing. The recipient must appear capable of managing the payments and must consent to receiving them (PB Regs reg 5).
• The council's four satisfactions. Before making payments the council must be satisfied the recipient will use them to secure the agreed provision in an appropriate way, will act in your child's best interests, that the payments will not have an adverse impact on other services it provides, and that they are an efficient use of its resources (PB Regs reg 6(1)).
• Written conditions, agreed in writing. The council must give written notice of the conditions, covering the amount, what it buys, payment dates and record keeping, and the recipient must agree to them before payments start (PB Regs reg 8; Code 9.103).
• The head's written consent for use at school. If any provision bought with direct payments is delivered on the premises of a school, college or early years setting, the written consent of the head teacher, principal or equivalent is required (PB Regs reg 9). If agreement cannot be reached, the direct payment cannot go ahead for that provision, and the council should explore a notional budget with the setting instead (Code 9.104 to 9.105).

None of this weakens the council's core duty. Provision secured with direct payments counts as secured under section 42(2) (CFA s.49(5)), and the duty is discharged only when the provision has actually been acquired in line with the regulations (Code 9.120). Direct payments move the shopping to you. They never move the legal responsibility.

When the council can refuse

The duty to prepare a personal budget on request is real, but it has edges, and it helps to know exactly where they are.

First, the council can decline to identify a sum where the funding is part of a larger block that cannot be separated out without an adverse impact on services for other plan holders, or where separating it would not be an efficient use of resources (Code 9.106). Block-funded therapy contracts are the classic example. In that case the council should explain its reasons and work with you to personalise the provision by other means.

Second, direct payments specifically can be refused where the reg 6(1) conditions are not met. When that happens, the process in PB Regs reg 7 applies: the council must give you a written decision with reasons and tell you of your right to request a review. If you ask for a review, it must consider your representations and give you a written, reasoned outcome (reg 7; Code 9.107).

How to ask, and what to do if refused

Ask in writing, at one of the two windows reg 4(1) opens: while the draft plan is being prepared, or at a review or re-assessment. Name the provision in the plan you want the budget to cover, say which delivery form you want for each item, and ask for the council's personal budget policy and an indicative figure. If a draft plan is in front of you, the 15 day response window is a natural moment to do it.

If the answer is no, match your route to what was actually refused.

That last row is the one to check before anything else. Arguments that look like budget arguments are often provision arguments wearing a different coat: if the real problem is that Section F does not specify enough hours of therapy, the fix is a Section F appeal, and the budget follows the plan. The same logic applies across the process, and the guide to challenging a refusal walks through the appeal machinery step by step.

Realistic expectations help here too. Personal budgets work best for discrete, plan-specified items like a named therapy or a support worker, and least well where provision is embedded in what a school delivers day to day. A modest budget that reliably delivers two items from Section F is worth more than a large notional figure nobody can spend. Whatever form the budget takes, the deadlines of the wider process still run, and the free deadline checker will map them from your dates with the regulation on each line.

Case Manager tracks the annual review date and the two month window to appeal after the council issues, amends or refuses to change the plan, and keeps a dated log of every contact with the council. Sign up for Case Manager