Local authorities face a major challenge to implement personal budgets for social care with some already “lagging behind”, an Audit Commission report has warned.

The Department of Health and local government bodies agreed that personal budgets, which allow recipients of adult social care – or their carers – to control care support plans, should be used by at least 30 per cent of those eligible by next April.

The Audit Commission agreed that personal budgets “bring flexibility, choice and control” but warned that some councils would not meet the implementation deadline.

The commission analysed spending and activity data and interviewed staff – from social workers to directors – at eight councils about the progress of implementing personal budgets.

The report highlighted integrated working with other organisations as a potential barrier to introducing personal budgets, citing mental health patients as the most likely to miss out as a result.

It says: “Existing joint arrangements, such as pooled funds, with the primary care trust or mental health trust, were not flexible enough to adapt to personal budgets.”

The report adds the problem of “disentangling” pooled funds meant that “people with mental healthcare needs are less likely to have personal budgets than other service users”.

Commission managing director of health Andy McKeon said pooled funds accounted for about 10 per cent of funding for mental health.

Mr McKeon said the extension of shared budgets would affect bodies like care trusts, who used local government and NHS funding to provide integrated care.

He said: “If you provide somebody with the actual cash, you have to break up the pooled budget. That does affect planning and it does affect how you think about your in-house provision.”

Mr McKeon said: “The rationale behind personal budgets is not saving money, but empowering service users. Personal budgets mean personal choice. They can improve health, wellbeing and user satisfaction.

“There may be some savings where councils have ended up with high-cost care packages as a result of poor commissioning. But the growth in personal budgets puts block contracts and in-house service provision at risk, as a result of the freedom to choose from different services and providers.”

Unite assistant general secretary for public services Gail Cartmail said personal budgets, combined with other financial pressures on health and social care, constituted “a very toxic cocktail”.

She said: “Faced with drastic spending cuts, how will councils lagging behind with their social care budget programmes build the capacity to catch up?”