How self-directed support delivers better lives and more sustainable care & support systems.

There is a persistent misconception in some circles that personal budgets and independent living lead to higher public costs. This view is not supported by the evidence. Extensive research conducted in England, where self-directed support (SDS) has been trialled and implemented at scale, demonstrates that personal budgets are either cost-neutral or more efficient than traditional service models.

Key studies show that:

• Personal budgets are not more expensive than conventional services and often deliver better outcomes for the same or lower cost.
• Individuals and families, when given control over their own support, make cost-effective decisions that reduce reliance on institutional care or crisis interventions.
• Systems that provide flexibility and control (such as direct payments or individual service funds) can lead to long-term efficiencies, especially for people with complex needs.

The evidence from England stands in contrast to the limited or misinterpreted findings from some international contexts. For example, a Dutch trial involving personal health budgets was designed in a way that made costs appear higher but this was due to system design, not the principle of personalisation. Likewise, Swedish models of independent living are often misrepresented, overlooking the underlying cost structures and rights-based frameworks.

This paper brings together key findings from over a decade of evaluations, case studies, and systematic reviews. It highlights how self-directed support, particularly through mechanisms like Individual Service Funds (ISFs) and direct payments, can deliver cost-effective, flexible, and preventative care arrangements. It also exposes how system design, rather than the principle of personalisation itself, determines whether these models succeed or fail.

What follows is not a traditional literature review. It is a curated synthesis of evidence from leading studies, designed to inform commissioners, policy makers, providers, and advocates. The goal is to present a brief overview of what works, why it works, and how to ensure that personal budgets and independent living can form the foundation of a more sustainable and humane support system.

In short, when implemented well, personal budgets are not only fair and empowering  they are also a sound use of public money.

Quick Reference Summary of Cost-Related Findings from SDS Literature

Report	Author(s)	Year	Key Cost Findings
1. The Power of Freedom	Marsha Marshall	2022	Personal budgets reduce administrative costs and avoid expensive institutional care; efficiency through personalised, lower-cost support.
2. Evaluation of the Individual Budgets Pilot Projects	Caroline Glendinning et al.	2008	No increase in overall costs; some groups achieved better outcomes for same or lower cost; cost-effective with good infrastructure.
3. Personal Health Budget Evaluation	Julien Forder et al.	2012	No increase in NHS spending; reductions in emergency and hospital use; direct payments most cost-effective.
4. Individualised Funding Systematic Review	Annika Larsson, Magnus Sjöberg & Marianne Tamm	2019	No consistent increase in costs; cost-neutral or savings in well-implemented systems; efficiency depends on support structures.
5. Delivering Sustainable Savings and Efficiencies in Social Care	Chris Watson	2024	Savings achieved by shifting from institutional to personalised support; up to 10–15% efficiency when implemented systemically.
6. Progress on Personalised Support	Simon Duffy & Sam Sly	2017	No cost increase; costs reduced through avoidance of crisis and use of ISFs; inefficient systems remain due to poor implementation.
7. No Place Like Home	Alice Squire & Pete Richmond	2017	Institutional placements can cost 3–5 times more than community support; savings up to 70% possible through personalised housing and support.
8. Better Lives	Professor Roger Ellis, Professor David Sines and Professor Elaine Hogard	2014	Support via ISFs often 20–40% cheaper than traditional models; cost reduction grows over time as people build independence.

1. The Power of Freedom

Marsha Marshall, Citizen Network / Manawanui, 2022

In this presentation paper, Marsha Marshall, CEO of Manawanui in New Zealand, provides an overview of the country’s growing movement toward self-directed support (SDS). Drawing on Manawanui’s experience as the first and leading provider of self-management support in New Zealand, the paper outlines the policy, operational, and technological innovations that have helped make personalised funding both practical and scalable.

The presentation was originally delivered to the Erasmus+ funded SKILLS project (now known as the SDS Network) and shares insights into how digital platforms, citizen leadership, and government partnership can combine to deliver more effective and efficient models of support for disabled people and families.

Key Findings on Cost and Efficiency

• New Zealand’s self-management model, supported by Manawanui, has shown that giving people control over their budgets is not more expensive, in fact, it enables smarter, outcome-focused spending.
• The use of user-friendly web platforms improves transparency, reduces bureaucracy, and helps individuals, families, and personal assistants manage funds efficiently and with confidence.
• Self-direction supports the development of bespoke care solutions that are often more affordable and sustainable than conventional block-funded services.
• The shift to self-management allows for flexible resource use — preventing unnecessary costs tied to rigid services and staffing models.

Other Notable Findings

• Manawanui’s platform has proven essential in supporting thousands of individuals to manage their own budgets successfully, with minimal overheads and high levels of satisfaction.
• The model builds trust between citizens and the state, allowing people to manage their own support while maintaining financial accountability and regulatory compliance.
• Marshall highlights the importance of infrastructure investment, such as technology, customer service, and personalisation support, to scale SDS while maintaining quality.
• New Zealand’s experience demonstrates that market shaping and provider innovation can flourish when the system is designed around people, not processes.

Relevance to Current Debates
The Power of Freedom offers an international case study that reinforces the global relevance of self-directed support. Marsha Marshall shows that personal budgets can be implemented at scale, supported by modern tools and systems, without increasing costs or complexity. The New Zealand model is particularly useful for other countries seeking to move beyond pilot schemes and toward full implementation of SDS.

Her contribution is both practical and strategic, proving that with the right infrastructure and ethos, self-management is not only empowering, but also efficient.

2. Evaluation of the Individual Budgets Pilot Projects (IBSEN Study)

Caroline Glendinning et al., Social Policy Research Unit, University of York, 2008

The IBSEN study was the first large-scale, government-commissioned evaluation of individual budgets (now commonly known as personal budgets) in England. It assessed pilot schemes in 13 English local authorities, involving nearly 1,000 participants across five adult social care user groups: older people, people with physical disabilities, people with learning disabilities, people with mental health needs, and carers.

The evaluation compared outcomes, experiences, and costs between individuals receiving individual budgets and those receiving traditional council-managed services. It provided a rigorous analysis of whether self-directed support models could deliver improved personal outcomes while maintaining or reducing overall system costs.

Key Findings on Cost and Efficiency

• No significant difference in overall cost between individual budgets and traditional services across all user groups, suggesting that concerns about SDS being more expensive are not supported by the evidence.
• For some user groups, particularly adults with physical disabilities and mental health needs, individual budgets delivered better outcomes for the same cost, implying greater cost-effectiveness.
• There were some initial setup and transaction costs for local authorities, due to the need to implement new systems and staff training, but these were offset by downstream benefits, including a reduction in crisis responses and institutional placements.
• Participants receiving individual budgets were more likely to spend funds on preventive and flexible solutions, which may offer longer-term savings through reduced reliance on more intensive care.
• The evaluation found variability in how budgets were calculated and delivered, with some authorities using resource allocation systems that did not yet achieve consistency or transparency, a limitation that could affect the realisation of cost benefits.

Other Notable Findings

• Improved quality of life was observed among budget holders, particularly in relation to choice, control, and independence.
• Users of individual budgets reported higher satisfaction with their support, feeling more empowered and less dependent on professional gatekeeping.
• For older people, outcomes were more mixed, partly due to concerns about managing money and the design of the support infrastructure, not the principle of personalisation itself.
• Carers of individual budget users reported reduced stress and greater flexibility, particularly when the person they cared for had control over their support.

Relevance to Current Debates
The IBSEN study remains a key piece of empirical evidence showing that personal budgets do not lead to increased public spending and can, under the right conditions, deliver greater value for money. It supports the conclusion that cost-effectiveness is possible when support is tailored to individuals and underpinned by strong local infrastructure.

Rather than arguing against SDS on the basis of cost, the IBSEN study suggests that the real challenge lies in implementation, particularly the need for consistent, transparent budget-setting mechanisms, and co-produced support planning. The findings are still frequently referenced in national policy documents and academic reviews over a decade later.

3. Evaluation of the Personal Health Budget Pilot Programme

Julien Forder et al., Personal Social Services Research Unit (PSSRU), University of Kent, 2012

This Department of Health-funded evaluation assessed the impact of Personal Health Budgets (PHBs) across the NHS in England. The study involved a randomised controlled trial, one of the most rigorous forms of evaluation and followed over 2,000 participants with long-term health conditions, including mental health issues, COPD, diabetes, and neurological conditions. The aim was to assess whether PHBs could improve health outcomes and deliver better value for money.

The study compared people who received PHBs to those who continued using standard NHS services, measuring both health outcomes and cost implications over a 12-month period.

Key Findings on Cost and Efficiency

• The total cost of NHS services used by people with personal health budgets was no higher than for those using traditional services, and in many cases, was lower, especially among people with high levels of need.
• Individuals with PHBs experienced a reduction in unplanned hospital admissions, A&E attendances, and emergency GP visits, leading to downstream cost savings.
• The strongest cost-effectiveness was found where individuals had higher levels of choice and control, particularly via direct payments or notional budgets with flexibility.
• Participants with the highest health and social care needs showed the greatest net savings, demonstrating that PHBs are especially efficient for complex cases where traditional systems often fail or overspend.

Other Notable Findings

• PHB holders had better quality of life, improved psychological wellbeing, and greater satisfaction with their care arrangements.
• PHBs allowed individuals to use funds creatively, such as employing personal assistants, purchasing assistive technology, or funding therapeutic support not typically available under traditional care pathways.
• The evaluation noted that some people chose not to use the full budget, indicating that giving people control does not lead to overspending or misuse.
• A small minority of participants (especially older people unfamiliar with budget management) needed more support, underscoring the importance of well-designed support planning and brokerage systems.

Relevance to Current Debates
This evaluation is one of the most robust pieces of evidence supporting the idea that choice and control in health services can lead to better outcomes and lower costs. It is particularly relevant in rebutting arguments that personal budgets are only suitable for low-need, low-cost individuals.

By demonstrating that even people with high and complex health needs can manage budgets effectively and often spend less while achieving more, the study challenges assumptions within systems still structured around professional control and block contracts.

The findings remain highly relevant as many health systems explore how to integrate social prescribing, preventative care, and personalised approaches into mainstream provision. The evaluation proves that efficiency is not about tighter control it’s about enabling people to take charge of their own care.

4. Individualised Funding Interventions to Improve Health and Social Care Outcomes for People with a Disability: A Mixed-Methods Systematic Review

Larsson, Sjöberg & Tamm, Campbell Systematic Review, 2019

This systematic review evaluates the effects of individualised funding (IF) models, including direct payments and personal budgets, on health and social care outcomes for people with disabilities. Drawing on 21 studies from countries such as the UK, US, Australia, Germany, and the Netherlands, it examines both quantitative and qualitative data to assess outcomes for disabled people and their families.

The review focuses on key domains such as health, wellbeing, autonomy, service satisfaction, and informal caregiver impacts. It is one of the most comprehensive international reviews of personal budget-style interventions for people with disabilities.

Key Findings on Cost and Efficiency

• The review found no consistent evidence that individualised funding models increase overall care system costs.
• In several contexts, individualised funding proved to be cost-neutral or more efficient than traditional models, especially where it replaced more expensive institutional or agency-based services.
• Where properly implemented, these models allowed for more targeted and preventative spending, leading to reduced reliance on high-cost interventions such as residential care or hospitalisation.
• Cost-effectiveness improved when individuals had greater flexibility in how they could use their budget, for instance, employing their own support workers or choosing informal/community supports.

Other Notable Findings

• People receiving individualised funding reported higher satisfaction, improved quality of life, and greater sense of autonomy and control.
• Users felt that their support was more tailored, culturally appropriate, and responsive to their real lives, compared to traditional systems that often imposed inflexible service packages.
• Informal caregivers, particularly family members, often felt more included and empowered, though the review noted that additional support for carers was essential to prevent stress or overburdening.
• Outcomes were best when support planning and advocacy structures were in place to help people make informed choices and navigate the system.

Relevance to Current Debates
This review provides some of the most robust cross-national evidence that individualised funding is not inherently more expensive and can actually be more efficient when designed well. It challenges the widespread but unfounded assumption that giving people choice leads to uncontrolled spending.

Crucially, the review emphasises the role of system design: efficiency, sustainability, and quality outcomes arise not just from giving people budgets, but from creating a supportive, flexible ecosystem around them. Countries or regions that fail to do this may not realise the full benefits but that should not be taken as a failure of the model itself.

For decision-makers weighing the cost implications of personal budgets or SDS, this review reinforces the point that investment in personalised approaches can pay off, both financially and in terms of citizen wellbeing.

5. Delivering Sustainable Savings and Efficiencies in Social Care

Chris Watson, Citizen Network, 2024

This paper by Chris Watson outlines a clear and practical argument for how local authorities and care systems can deliver savings and efficiencies by embedding self-directed support (SDS) at the heart of adult social care reform. It challenges the misconception that personal budgets are an added cost, instead showing that the current system is structurally inefficient, and that SDS offers a pathway to both better outcomes and smarter spending.

The paper is grounded in the author’s experience of working with councils across England, offering real-world insight into how local systems can unlock financial sustainability through a shift in commissioning, resource allocation, and service design.

Key Findings on Cost and Efficiency

• SDS enables cost avoidance by helping people design preventative, flexible solutions that reduce dependency on high-cost services like residential care or emergency support.
• Local authorities can generate real-term savings by:
  • Replacing block contracts with individual service funds (ISFs).
  • Reducing overheads and duplication through simplified assessment and planning pathways.
  • Redirecting resources from low-impact services to personalised, outcomes-focused support.
• The paper sets out examples where councils implementing SDS with a clear strategy have achieved efficiencies of up to 10%–15% without cutting frontline services.

Other Notable Findings

• SDS supports smarter use of existing community assets and family networks, which can reduce the need for formal interventions.
• Implementation must be system-wide – one-off pilots or partial rollouts do not generate sustained savings.
• Success depends on clear leadership, investment in infrastructure (especially brokerage and support planning), and meaningful co-production.
• Cost pressures in social care are not caused by personal budgets, but by over-reliance on inflexible, service-led models that do not evolve with people’s needs.

Relevance to Current Debates
This paper is highly relevant for senior decision-makers, particularly in light of ongoing concerns about the financial sustainability of adult social care. Watson demonstrates that SDS is not just a values-based approach but a fiscally responsible strategy, provided local authorities have the courage to shift power, redesign commissioning, and invest in citizen-led planning and market shaping .

It is a direct rebuttal to claims that personalisation inflates budgets, instead making a case that doing the right thing is also the most efficient thing when systems are willing to change.

6. Progress on Personalised Support

Simon Duffy and Sam Sly, Citizen Network, 2017

This report explores the state of personalised support in England ten years after the publication of key policies promoting self-directed support (SDS) and personal budgets. Drawing on interviews, practical examples, and case studies, Duffy and Sly assess how far the social care system has come in delivering genuinely person-centred and cost-effective models of care.

It focuses particularly on people with learning disabilities, autism, and complex needs, and includes reflections from frontline organisations and families. The paper also examines why progress has stalled in many areas and what needs to change to realise the full benefits of personalisation.

Key Findings on Cost and Efficiency

• Where genuinely implemented, personalised support (including Individual Service Funds and direct payments) results in more flexible and cost-effective care arrangements.
• Many people featured in the report had previously been placed in expensive out-of-area or institutional settings, but with personalised support were able to return to local communities at significantly lower cost.
• Costs were reduced through:
  • Prevention of crisis escalation.
  • Elimination of duplicate or unnecessary services.
  • Using funds to support people in ways that mattered to them, often drawing on family and community capacity.
• The report stresses that high costs in the traditional system are not caused by complexity of need, but by poor design and risk-averse commissioning.

Other Notable Findings

• Personalised support leads to better lives – people have more choice, control, stability, and better long-term outcomes.
• Innovative providers working with Individual Service Funds (ISFs) demonstrate that person-led approaches can deliver both efficiencies and accountability.
• Many local systems have reverted to compliance-driven processes, limiting flexibility and increasing hidden costs.
• The authors call for investment in local, trusted, person-centred organisations, and the removal of bureaucratic obstacles to enable more effective support.

Relevance to Current Debates
This report is a strong rebuttal to the idea that personalisation is costly or unworkable. It shows that the problem is not the model, but the failure to implement it fully and consistently. Duffy and Sly present clear, practical evidence that when people are genuinely involved in designing their own support, and systems allow flexibility, the result is more efficient use of public money and better quality of life.

It offers a compelling case that personalised support is not only morally right but financially smart, especially for those with the most complex support arrangements.

7. No Place Like Home

Alice Squire and Pete Richmond, 2017

This report explores the financial and social implications of different models of housing and support for people with learning disabilities and complex needs. Squire and Richmond examine comparative evidence, including findings from the Scottish Government, to demonstrate that independent living with personalised support can be significantly more cost-effective than congregate or institutional care models.

Through case examples and policy analysis, the report highlights how personalised housing arrangements not only deliver better quality of life but also help local authorities and providers make more efficient use of public resources.

Key Findings on Cost and Efficiency

• Evidence from Scotland and other UK regions shows that supported living costs less than residential or institutional care, even for people with complex needs.
• In one Scottish study referenced, people moved from campus-style accommodation to individual tenancies with tailored support, with cost savings ranging from 15% to 40%, while outcomes improved.
• Smaller, individualised arrangements also enable better control over costs, more predictable budgets, and reduced reliance on crisis or emergency placements.
• Housing and support designed around the person reduces the need for expensive shared infrastructure and staffing patterns tied to group-based care.

Other Notable Findings

• People supported in their own homes had greater autonomy, stronger community connections, and improved wellbeing.
• Families reported higher levels of confidence and felt more involved in decision-making.
• Support arrangements were more flexible and adaptable, leading to more stable long-term solutions and fewer breakdowns.
• The paper emphasises that investment in local, bespoke housing options enables individuals to live ordinary lives which is both morally and fiscally sound.

Relevance to Current Debates
No Place Like Home challenges the assumption that congregate care is more cost-effective for people with high support needs. It provides solid evidence that the opposite is true: when designed well, independent living options cost less and work better. The report strengthens the case for a shift in commissioning practice away from legacy residential provision and toward flexible housing and support models rooted in the community.

It is a timely contribution for those advocating for housing reform, demonstrating that better lives and better value go hand in hand.

8. Better Lives

Professor Roger Ellis, Professor David Sines, and Professor Elaine Hogard, 2014

Better Lives is a comprehensive independent evaluation of the work of Inclusion Gloucestershire and its partners, examining the outcomes and value for money delivered through Individual Service Funds (ISFs) and self-directed support. The evaluation focused on people with learning disabilities and complex needs who had previously been placed in traditional or out-of-area services.

The report brings together both qualitative and quantitative evidence, showing how personalised support grounded in people’s real lives can improve outcomes while reducing costs. It provides a rigorous assessment of a real-world implementation of self-directed models in a local authority context.

Key Findings on Cost and Efficiency

• Individuals supported through ISFs were able to return from expensive institutional settings to their local communities, with packages that were often 20–40% lower in cost than previous placements.
• Cost savings were achieved by designing flexible, community-based support plans focused on outcomes, rather than service hours or staffing ratios.
• ISFs enabled better financial accountability, allowing for regular review and adjustment, and reducing waste associated with unused or inappropriate services.
• Over time, support costs tended to decrease further as individuals built confidence, independence, and informal support networks.

Other Notable Findings

• Individuals reported higher satisfaction, greater control, and stronger relationships with their support teams.
• Families felt more empowered and informed, and were able to participate meaningfully in planning.
• Support was more consistent, creative, and responsive, particularly when delivered by small, local, values-led organisations.
• Outcomes included improvements in wellbeing, stability, and reduced use of crisis services.

Relevance to Current Debates
This evaluation is a vital contribution to the evidence base on personalised support. It demonstrates that people with complex needs can achieve better outcomes with fewer resources, when funding is made flexible and support is tailored to their lives.

Importantly, Better Lives refutes the notion that personalisation is more expensive or only suitable for people with lower-level needs. It shows that the real inefficiency lies in outdated service-led models, and that ISFs and community-based solutions offer a financially and ethically sound alternative.

Chris Watson
Chris Watson is the founder of Self Directed Futures and the Chair of SDS Network England. With extensive experience in strategic commissioning and change management, Chris advocates for innovative, community-led approaches to adult social care.