Individual Service Funds (ISFs) are transforming the way care is commissioned, offering a flexible, person-centred alternative to traditional approaches. This set of FAQs answers common questions about ISFs, highlighting their benefits, addressing potential challenges, and providing practical insights for implementation.

1. What are Individual Service Funds?

ISFs give individuals or their representatives greater control over their care budgets. Rather than sticking to rigid, hour-based care packages, ISFs allow trusted care providers to manage funds while tailoring support to meet specific needs. This approach promotes flexibility and creativity in care delivery.

2. How do ISFs differ from Direct Payments (DPs)?

Although ISFs and Direct Payments both prioritise individual choice, they differ in how they are managed.

With Direct Payments, individuals or their families manage the budget themselves, taking on the responsibility for payments and financial decisions.

With ISFs, the care provider manages the budget on behalf of the individual. This is ideal for those who want the benefits of flexibility but do not have the time, capacity, or inclination to handle the funds directly.

3. How can ISFs save money for councils?

ISFs can deliver cost savings by encouraging more efficient use of resources.

Care providers can explore creative solutions to meet outcomes, such as making use of community resources or reorganising support packages. ISFs often highlight overestimations in traditional care budgets, which allows for adjustments without compromising the quality of care.

Councils typically see savings of between 5 and 10 per cent over time while maintaining a focus on quality.

4. What are the benefits for individuals?

ISFs offer a wide range of benefits for individuals and their families.

• Flexibility. Support can be adapted as needs change without the administrative burden of managing Direct Payments.
• Transparency and security. Budgets are carefully monitored, with any unspent funds returned to the council each year.
• Creativity. Individuals can access community-based or alternative solutions that enhance their quality of life and independence.

This personalised approach ensures support aligns with what matters most to the individual.

5. Why would providers support ISFs if budgets are reduced?

Although ISFs may result in lower costs, many providers see long-term benefits in adopting this model.

Providers offering cost-effective, creative care solutions often attract more referrals from councils and individuals. Embracing ISFs can enhance a provider’s reputation as a leader in person-centred care, which helps to build trust and long-term partnerships.

ISFs also encourage efficient resource use, creating stability for providers while maintaining their focus on quality.

6. What safeguards ensure ISFs are managed responsibly?

To ensure accountability, councils and providers work together to establish safeguards for ISFs.

Providers must adhere to clear terms for how funds are used, and virtual wallets allow councils, social workers, and families to monitor budgets in real-time. Regular audits and reviews ensure that funds are spent appropriately and effectively.

These measures help to maintain transparency and build confidence in the ISF approach.

7. Which care settings are best suited to ISFs?

ISFs work particularly well for anyone who can benefit from flexibility and creativity around the use of their budget.

In particular, Learning Disability and Autism services are well-suited to ISFs, as they often involve bigger budgets. Supported living arrangements can also benefit significantly from the flexibility ISFs provide, allowing for more innovative and cost-effective support arrangements.

8. How do ISFs address staffing and operational challenges?

Providers adopting ISFs can take steps to manage staffing and operational complexities effectively.

Staff can be redeployed to other roles when care & support hours are reduced. Providers can also charge an administrative fee to cover the costs of managing ISFs. Fixed contracts for staff help to ensure continuity while maintaining flexibility for individuals.

These strategies create a balance between meeting individual needs and sustaining the workforce.

9. What role do councils play in implementing ISFs?

Councils play a key role in creating the conditions for ISFs to succeed.

They identify and support care providers willing to adopt the ISF model. Councils also establish clear frameworks to encourage creativity and efficiency and work closely with providers to address challenges and build trust.

By taking a collaborative approach, councils can help embed ISFs into the wider care system.

10. How can the impact of ISFs be measured?

There are several ways to measure the success of ISFs.

Surveys can capture feedback from individuals and families on their experiences before and after implementation. Data such as reductions in GP visits, safeguarding incidents, or reliance on formal care can provide further insights. Community engagement and participation levels can also help to demonstrate the impact of ISFs on quality of life.

11. Are ISFs suitable for large-scale implementation?

ISFs often start with smaller pilot programmes, which allow councils to test and refine processes with a select group of capable providers.

Over time, these programmes can expand, becoming a core part of commissioning strategies for more complex care needs. Taking a phased approach ensures a smoother transition and helps councils build the infrastructure needed for larger-scale adoption.

12. What challenges should councils anticipate?

Introducing ISFs comes with its challenges, but these can be addressed with careful planning.

Not all providers will be ready to adopt ISFs, so councils need to identify the right partners. Efficient audit systems, such as online wallets, are crucial for maintaining oversight. A cultural shift may also be required as councils and providers move towards more collaborative, outcome-focused approaches.

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.