Here, we look at personal budgets and direct payments that might be available to those who have an Education, Health and Care Plan (EHC plan).  EHC plans (often simply referred to as ‘plans’) could be in place for children and young people from ages 0 – 25 years who are in some form of education or training. Students going to university will not be eligible for a plan.  

An education, health and care needs assessment of your child or young person’s special educational needs (SEN) will take place before a plan can be issued.  A plan describes your child or young person’s needs and the specialist help and provision required to meet them.  If you have requested a personal budget, Section J of the plan should set out detailed information of how it will be used to deliver provision.  

What is a personal budget?

This is an amount of money identified by the local authority (LA) to deliver provision set out in a child or young person’s EHC plan.   Once it’s agreed that a plan will be issued, the LA must send a copy of the draft and give you the opportunity to request a personal budget.  

Information about the availability of personal budgets and organisations that can give advice should be in the LA’s local offer.  

Personal budgets are optional, but the LA should consider any request on its own merits. They should tell you if they are unable to identify a sum of money, this could be for reasons such as funding being used to provide a service that supports a number of children and young people. 

Personal budgets can be used for transport costs.

How Personal Budgets can be made

  • Direct payments – where you receive the money to contract, purchase and manage services yourself.
  • An arrangement – whereby the LA, school or college holds funds and commissions support specified in the plan (also called notional budgets).
  • Third party arrangements – where funds (direct payments) are paid to and managed by an individual or organisation on your behalf.
  • A combination of the above.

Personal budgets can include funding from education, health and social care.


Some of the SEN provision in your child or young person’s plan will be made using the school’s budget.  Personal budgets may be used for more specialist provision, for example to pay for a therapy or intervention.


The personal health budget remains the responsibility of the health commissioning body. These are not appropriate for all of the aspects of NHS care your child may require. Excluded services include GP and emergency services.

Social Care

The Care Act 2014 allows a personal budget as part of the care and support plan for people over 18 with eligible needs, or where the LA decides to meet needs. For children and young people under 18, LA’s have a duty to offer direct payments for services provided under section 17 of the Children Act 1989.

Direct payments 

Direct payments are made in cash directly to you or someone that you nominate to receive them. It is a way of delivering a personal budget, which allows you to arrange provision for your child or young person. Direct payments can’t be used to pay private school fees.   

Payment must be set at the correct level to ensure the provision specified is made. 

Provision paid for by direct payments to be delivered on school premises must be agreed by the head or principal. Usually, your LA will usually consult about this at the same time as they agree with the school that they are to be named on a child or young person’s plan.  Where agreement can’t be reached, your LA can’t go ahead with the direct payment.

If your LA refuses your request for a direct payment, they must set out their reasons in writing and inform you of your right to request a formal review.

Your LA can refuse to make direct payments to anyone who:
  • appears unable to manage the payments, even with assistance
  • lacks capacity within the meaning of the Mental Capacity Act 2005
  • subject to a rehabilitation order, or being treated for drug or alcohol abuse.
If direct payments are agreed, your LA must send a written notice to you, or the person you have nominated. This will specify:
  • the name of the child it relates to
  • the goods or services to be purchased
  • the proposed amount of money
  • any conditions on how the money can be spent
  • the dates for payments to be made into the bank account approved by the LA.
On receipt of the above notice, you or your nominee must write to the LA to say you agree to:
  • receive the direct payments
  • use the money only for the agreed provision
  • comply with any specified conditions
  • notify the LA of any change in circumstances
  • use the bank account approved by the LA
  • ensure that the bank account can only be accessed by you or your nominee (or any other person approved by the LA)
  • record money paid in and out of the account.
If you have nominated someone else to receive the payments on your behalf, you must send written consent to your LA for direct payments to be used by them to make agreed provision. Your nominee should also write to the LA to confirm that they are responsible.

Can the LA reduce or stop direct payments?

Your LA can reduce direct payments with reasonable notice. However, they must reconsider their decision if challenged by you or your nominee.  

They can also ask for repayment of some or all of the direct payments in certain circumstances, such as:
  • The child or young person’s needs have changed
  • The direct payments have not been used in part or full on the agreed provision
  • There has been theft, fraud, or other offence in relation to the payments
  • The child or young person has died.

Their decision to request repayment must be reconsidered if either you or your nominee ask them to.

Your LA can stop making direct payments if you say that you no longer want them. 

Payments can also be stopped by them if you or your nominee are no longer a person that the LA believes payments should be made to. This could be for one or more of  the following reasons: 

  • unable to manage the payments, even with assistance
  • lack capacity with the meaning of the Mental Health Act 2005
  • subject to a rehabilitation order, or being treated for drug or alcohol abuse
  • it becomes apparent that the payments are not being used to secure agreed provision, or the provision can no longer be paid by direct payments
  • if the direct payments are having an adverse effect on service delivery or are no longer an efficient use of resources
  • where the young person is over 16 and they don’t confirm consent to receive payments
  • You have failed to comply with the conditions of use. 

Further help from the NAS

Advice for parents trying to obtain an appropriate education for their child or young person is available from our Education Rights Service

In partnership with the Department of Education, the National Autistic Society have developed a self-assessment tool called This-is-me which can help autistic children and young people to advocate for themselves. 

Online resources

Government information for young people. SEN and disability support changes.

Government statutory guidance. SEN code of practice: 0 to 25 years.

Last reviewed: 8 January 2016.