Craig Dearden-PhillipsThis guest blog comes from Craig Dearden-Phillips MBE, a social entrepreneur and founder of Speaking Up, a charity that supports and empowers people with learning difficulties, disabilities and mental health problems to have a voice that counts. In this post he gives his views on ‘personalisation’ and what it means for charities.

`Personalisation’—where people are allocated their own personal budget to spend on the public services of their choice—is a hot topic among the UK’s think-tanks at the moment. But what’s driving it? What are its possibilities and pitfalls? And what does it mean for charities?

Personalisation hit the UK in the 2000s , driven almost single-handedly by the philosopher and social entrepreneur Simon Duffy and his pressure-group `In Control’. Duffy persuaded the UK Department of Health to try personal budgets in social care for older people and those with learning and physical disabilities, as an alternative to direct state provision.

Duffy’s argument was simple: The UK spends £20 billion (30 billions US dollars) on people who need help to live independently, 40% of which is tied up in `transaction costs’—bureaucracy in other words. Added to this was the fact that outcomes for these people were, at best, mediocre. So, Duffy argued, why not move to a system which cuts out the middle-man, costs less and results in greater user satisfaction? Sceptical of Duffy’s claims, the UK Department of Health ran pilots in 2006-08 which proved Duffy to be right—now 30,000 UK citizens are in receipt of a personal budget.

Progress by 2010, however, has been slower than anticipated. The local authorities that control funding for individuals have taken a long time to reboot their systems to allow people to get their money out. There have been wide variations in the rate of roll-out, suggesting that in many areas the local authorities don’t actually really buy into the policy—not a huge surprise as evidence shows that once people get their hands on a personal budget they often stop buying services from the state!

But this may soon change. Up till now, growth in UK public spending has meant that life has been able to carry on undisturbed in Britain’s sclerotic public sector. Soon, however, the taps will be turned off—creating a huge driver for cost reduction. As a low-cost alternative to traditionally provided public services, personal budgets suddenly make a lot more sense.

Personalisation is, of course, about more than budgets. It is also about creating a more customized or ‘personalised’ version of public services. At the moment, if you’re unlucky enough to rely heavily on public services in the UK, you will find that they are a bit like the first of Henry Ford’s motor cars: You can have whatever colour you like—as long as it is black! In an age when we have become used to sitting by a mouse and tailoring our experience as a traveler or purchaser, the public services experience feels Neolithic.

The biggest advances towards something resembling a normal customer experience have come from Conservative councils such as Barnet. Also known as `Easy Council’, following its adoption of the model of customer service showcased by the airline easyJet, the basic council service is free—but can be augmented or made quicker by customers who are willing to pay a bit more. This keeps the council’s own service cheap and enables any `extras’ to be funded by the citizen. While criticised in some quarters, ‘Easy Council’ is highly popular with its citizens and other UK councils are adopting the model.

So what does personalisation mean for charities? One clear change is that they will increasingly need to reach out directly to users, rather than upward towards the public bodies commissioning services on users’ behalf. What users say and think will have to be taken seriously lest they do what they haven’t yet had the opportunity to do—vote with their feet.

This can only be healthy. The problem with charities in the UK so far has been that, in the final analysis, they have only needed to impress the people giving them funding —either the public or public sector commissioners. Tugging on the heartstrings has tended to be just as effective as data, even with sophisticated investors. But as personal budgets take hold, we will get a much better idea of the impact of certain types of charities without the need for complicated impact-assessment tools—you will just need to observe the traffic of users between the various charities. For social care charities, this will be no bad thing.

Are there any drawbacks with personalisation? Undoubtedly, yes. One obvious one is that by individualising budgets, it is very easy to reach a position where popular services are quickly rendered financially unviable by the withdrawal of just a small number of clients. This has reportedly happened in a number of locations across the UK. Finding ways to enable users of personal budgets to `club together’ their funding to maintain or create new collective provision have not yet been found.

Another limitation is around economies of scale. Big services, while often low quality, are affordable and keep people safe and occupied, often with their peers in a setting that they are familiar with. Breaking down the budget for that service often means the individual can afford a lot less out there in the marketplace, leaving them without a service for at least part of the time.

A final limiter concerns the practicalities of personal budgets. A person with complex learning and physical disabilities will often command a personal budget in excess of £150,000 a year (250,000 US dollars). Managing this funding and all the risks incumbent in running what is, in effect, a small business, will challenge even the most capable and committed families. When a family has neither the time, ability nor inclination to do this, personal budgets look like a recipe for trouble.

However I am, after 20 years of my life working in charities alongside disabled people, personally very positive about personalisation. While it isn’t a perfect solution—and there isn’t one—it is preferable to both the waste of money and potential of a system in which the state both controls and consumes the funding intended to improve the lives of our citizens.

Read more about the author at craigdeardenphillips.com and follow his blog nakedentrepreneur.blogspot.com

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