Money management - Individual Service Funds

Use of Individual Service Funds (ISFs)


Councils have the option to permit and/or pay a provider to administer the purchasing of activity that subsequently meets the person's assessed needs. If it is permitted, the arrangement is a sub-contract. If the administration is paid for, the Council may be found to be using the provider as a purchasing agent, which has public procurement implications.



What are the outcomes we want to achieve?

  • People have improved control and flexibility over what they are supported with, when and how they are supported and who supports them
  • Improved circles of support and greater involvement in the local community
  • Individual service funds are commonly offered by a range of local providers and are built into their core offers
  • A more diverse market is available for people with support needs and their families


What tools and resources do we need to do a good job? What are the steps we have to go through?

  • Flexible contract agreements that enable flexible sub-contracting arrangements to take place
  • Market position statements which clearly indicate to providers that the council supports flexible sub-contracting
  • Council facilitated support for local providers to develop sustainable models of ISFs and to share learning about what works in making the transition to ISF models of support


What are the products we will have at the end of this process?

  • Flexible 'ISF friendly' contracts
  • ISF agreements which enable people to use resources from a provider more flexibly and where possible also allow people to purchase support from other sources
  • Feedback from people using services
  • Diversification of support


When does this process start and end and within what timescales should this process be completed?

  • Begins with support planning
  • Initially the process ends with the letting of contracts which include provision for ISFs and which enable providers to supply flexible arrangements to their customers
  • For individuals the process ends with the sign off of ISF agreements and arrangement of support


Who needs to be involved and what is their role? Who is taking the lead?

  • Person
  • Family or carer
  • Local Providers
  • Care navigators
  • Local commissioning teams
  • Contract compliance team


When a council contracts with a provider and allows sub-contracting, this arrangement is not subject to public procurement rules. The performance of the sub-contracted provider does not have to be monitored at all. It is up to the contracted provider to the council to decide on the terms of the sub-contract. Nevertheless, over recent years the council sector has tried to force providers to make year-on-year savings / make efficiencies. Providers have subsequently adopted this approach with their sub-contractors. Getting providers to do more for less requires performance monitoring, and this performance monitoring, as well as overall reducing budgets, can reduce the time spent supporting customers to achieve outcomes in flexible ways.


Posted on by Les Scaife

When you say Councils have the option, does not the service user also have an option as to who THEY want to manage the account.

Posted on by Old Site User

If the person is a direct payment (DP) holder they have full choice over who they have help them. If the council is responsible for the personal budget then it depends who the council has contracted with (if at all) to deliver ISFs. Under the Care Act the individual can request an ISF with a specific provider and the council must consider this, and have a 'cogent reason' for not offering this option.

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