Navigating care funding in the UK can feel complex, especially when trying to understand the difference between NHS Continuing Healthcare and Local Authority social care funding.

Both exist to support people with additional needs, but they are built on very different foundations.
They differ in how eligibility is assessed, who provides the funding, how flexible the support can be, and how care is ultimately delivered.

At HomeCareDirect, we work across all funding types.
Our focus is always the same, regardless of the route. Care should feel consistent, personalised and built around the individual, not shaped by the system funding it.

What is CHC and a Personal Health Budget?

NHS Continuing Healthcare is a fully funded package of care for individuals whose primary need is health-related. It is not means-tested, which means it is free at the point of use regardless of income or assets.

A Personal Health Budget allows that funding to be used in a more flexible and personalised way. Rather than care being arranged entirely by the NHS, individuals and families can have greater choice and control over how support is designed and delivered.

There are three main ways to manage a Personal Health Budget.

A notional budget is where the NHS holds the funding and arranges care on your behalf.

A direct payment allows the individual or their representative to receive the funding and organise their own care.

A third-party budget is where an organisation manages the funding and coordinates care delivery.

In practice, most Personal Health Budgets in England are still managed as notional budgets, with direct payments and third-party arrangements used less frequently.

What is Local Authority Social Care Funding?

Local Authority funding is designed to support people whose needs relate more to daily living than to healthcare.

This type of support is usually referred to as a Personal Budget and is provided following an assessment under the Care Act. Unlike CHC, it is means-tested, so individuals may need to contribute towards the cost of their care depending on their financial situation.

The focus is typically on maintaining independence, supporting wellbeing and enabling people to manage everyday activities such as personal care, mobility and routines.

As with Personal Health Budgets, Local Authority funding can be managed in different ways, including direct payments, council-managed budgets or third-party arrangements.

Key Differences Between CHC and Local Authority Funding

The most important distinction lies in the nature of need.

CHC funding is provided by the NHS and is based on a primary health need. It is not means-tested and is fully funded.

Local Authority funding is provided by councils and is based on care and support needs. It is means-tested and may require a financial contribution.

CHC tends to support individuals with complex clinical needs, while Local Authority funding focuses more on daily living and maintaining independence.

Although the funding sources differ, both systems offer similar options in terms of how budgets can be managed.

In some situations, these funding streams can be brought together into a single, more coordinated package known as an Integrated Personal Budget.

Who is Eligible?

Eligibility for CHC is determined through an assessment process that looks at the nature, intensity, complexity and unpredictability of a person’s health needs.

You may be eligible if your care is primarily required due to ongoing medical conditions or complex health needs. This is assessed using a structured process known as the Decision Support Tool.

There is also a legal right to a Personal Health Budget for certain groups, including adults eligible for CHC, children with continuing care needs and individuals receiving Section 117 aftercare.

Local Authority funding, on the other hand, is based on whether a person requires support with daily activities and whether their needs meet the thresholds set out in the Care Act. A financial assessment is then carried out to determine any contribution.

How to Apply

For CHC, the process usually begins with a referral from a GP, hospital discharge team or community professional. An initial checklist assessment is completed, and if this indicates eligibility, it progresses to a full assessment.

If approved, a care and support plan is developed, and decisions are made about how the budget will be managed.

For Local Authority funding, the first step is to contact your local council’s adult social care team and request an assessment. This is followed by a financial assessment and the development of a care and support plan.

How HomeCareDirect Works Across All Funding Models

At HomeCareDirect, we are set up to work across every funding route, including CHC-funded care, Local Authority support, direct payments, integrated budgets and privately funded arrangements.

What matters most to us is not where the funding comes from, but how it is used to create meaningful, sustainable support.

We do not fit people into pre-existing services. We build services around people.

Our Model: Built Around the Individual

A key part of our approach is personalised recruitment. Rather than assigning staff from a general pool, we recruit Personal Assistants specifically for each individual. This allows for better matching in terms of personality, interests and values, and supports long-term, consistent relationships. Clients and families are involved in the selection process from the start.

Training is equally tailored. Every Personal Assistant is trained to meet the individual’s clinical and behavioural needs, with oversight from experienced nurses. As needs change, training evolves alongside them.

We also place strong emphasis on partnership. We work closely with clients and families to co-design care, with Integrated Care Boards to ensure clinical governance, with Local Authorities to meet Care Act requirements, and with case management companies to deliver complex packages of support. This creates a coordinated approach rather than fragmented care.

Our model is flexible when it comes to managing budgets. Whether funding is held as a notional budget, a direct payment or through a third-party arrangement, we can deliver care, manage budgets, or support individuals in managing their own funding, always with clear transparency around costs and outcomes.

Why This Matters

There has been a clear shift towards more personalised care in recent years. Funding is no longer just about providing a service. It is about enabling choice, giving people control, and improving outcomes and quality of life.

Personal Health Budgets and Local Authority Personal Budgets are simply tools. The real difference lies in how they are used and the approach taken to delivering care.

Conclusion

Understanding the difference between CHC funding and Local Authority support is an important step in navigating the care system.

However, the more meaningful question is how that funding is translated into day-to-day life.

With the right approach, it can become more than a service. It can support a life that feels stable, personalised and genuinely works for the individual.

At HomeCareDirect, that is what we are designed to deliver.

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Understanding CHC Personal Health Budgets and Local Authority Social Care Funding