Blog: The freedom to choose: the advantages of client-directed budgets


Disability is not something individuals have.  What individuals have are impairments.  They may be physical, sensory, neurological, psychiatric, intellectual or other impairments.  Disability is the process which happens when one group of people create barriers by designing a world only for their way of living, taking no account of the impairments other people have.

- New Zealand Disability Strategy (p.7)

First… a confession. Until working on the Productivity Commission’s inquiry into social services I had had limited contact with the disabled community, and didn’t fully appreciate the issues people with impairments face in a world designed for the “able bodied”.

When the inquiry director asked me to write a case study on services for people with disabilities I was delighted. I saw the study as a chance to become better informed and to allay my curiosity around the use of client-directed budgets (CDB) – a model of service delivery first trialled in New Zealand back in 2003.

CDBs operate by assessing a person’s needs and then allocating them a “budget”. The person then uses the budget to select and pay for services that best match their aspirations and individual circumstances. Under CDBs, clients, rather than government officials, make decisions about the services they access and who provides them - often with advice from specialist case managers who help people understand their options. Funding from the government follows the choices made by the client.

To economists, CDBs are an attractive model because (in theory) they result in public money flowing to the services that clients value most. In other words, they can make sure that public money is spent in the way that best meets the specific needs of individuals.

As l researched the use of CDBs in New Zealand I came to realise that, for disabled people, choice is not only about getting the services they need when they need them. It is also about achieving individual autonomy and self-determination – elements of life that so many of us take for granted.

I developed a far better understanding of the issues that disabled people face, and a great respect for the tireless work that carers put in to helping disabled people live fulfilling lives. I heard stories of how programmes such as Enabling Good Lives and Individualised Funding are helping people pursue their dreams and aspirations – be these to live independently, start a micro-business or participate in community activities. Many of these dreams and aspirations were not possible under inflexible “top-down” approaches to service delivery. Examples of stories can be found on the Enabling Good Lives website.

I also learnt that it can be challenging to implement such innovative programmes within existing institutional settings and organisational cultures. Our social services system was simply not designed to put decision making in the hands of clients. And government agencies, like many organisations, tend to have cultures that resist big changes. The system also struggles to pool resources from across government departments, making it harder for programmes like Enabling Good Lives to reach their full potential.

The Commission’s draft report on social services discusses these institutional issues in greater depth, and we have also published an appendix on services for people with disabilities.

Despite the challenges, I am convinced that opportunities exist to give many service users more choice and control over their lives while improving the efficiency of public spending. Client-directed budgets will not be suitable in every situation. But where they are suitable they can significantly improve the lives of New Zealanders receiving social services.

- James Soligo, Principal Advisor

Disclaimer: Blog posts are written by staff members and do not represent the official views of the Productivity Commission.

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