Local authorities calculate personal budgets in one of three ways:

Ready reckoner: Your social worker identifies the number of hours of care and support that are needed to meet your eligible needs, discusses with you how you would like that support delivered and works out the hourly cost, to calculate your overall personal budget.

Resource allocation system (RAS): This is a system based on statistical information about care costs. This information is used to calculate an amount for your personal budget. Some local authorities use a computer programme to do this.

Initial indictive figure: After your initial assessment, the local authority may allocate an estimated ‘indicative figure’, which is then used as the basis for planning your care and support.

As your care and support plan develops, this estimated figure must be checked against the actual costs of purchasing the care and support needed.

This means the final personal budget amount may differ from the indicative amount.

The care act guidance states:

The allocation of a clear upfront indicative (or ‘ball-park’) allocation at the start of the planning process will help people to develop the plan and make appropriate choices over how their needs are met.

Transparent, timely and sufficient

The local authority must meet the following standards when working out your personal budget:

Transparency: Local authorities should make their calculation processes clear.

This refers to general systems such as RAS.

You should be given enough information to understand how the system works, how your indicative amount was decided, and how your actual personal budget amount was calculated.

Timeliness: An up-front or indicative budget amount should be available to you at the start of the care planning process.

Sufficiency: Your final personal budget amount must be sufficient to meet your assessed eligible needs. It should consider your preferences as to how your eligible needs are met.

The care act guidance states:

Local authorities should not have arbitrary ceilings to personal budgets that result in people being forced to accept to move into care homes against their will.

This means they must be flexible in their approach and realistic about care and support costs.