The failure to involve the NHS in individual budget pilots was a 'missed opportunity' and deeply regretted by the social services staff who took part.
An evaluation of the first 13 local authorities to pilot individual budgets has found giving social care users money to buy personal care, help with chores and social, leisure and educational activities gave people with mental health problems and adults with physical disability a feeling of control and satisfaction.
The report, commissioned by the Department of Health, said older people were less happy and sometimes viewed the budget and the decisions they had to make about spending it as a burden.
The research, led by the social policy research unit at York University, found individual budgets did not cost more than conventional care and gave comparable or better outcomes. But pilot authorities were disappointed that the NHS was excluded as they had joint working arrangements, pooled budgets and joint commissioning.
The report says: "All sites anticipated from the outset that introducing individual budgets would have both strategic and operational implications for relationships with their NHS partners."
It adds: "Individual budget lead officers were virtually unanimous in expressing disappointment that the individual budget pilots excluded all NHS funding."
Martin Routledge, national director for Putting People First, the government's social care policy, said the DH excluded the NHS because this was national policy at the time. However, since then personalising NHS care has moved up the political agenda. Individual health budgets were announced in the next stage review. Trial sites will be selected in December and pilots will begin in spring 2009.
Mr Routledge said: "The issues that have been raised in this research will be raised in that programme."
NHS West Midlands has been working on individual budgets for some time. It recently held workshops with PCTs to find out their views.
Jon Glasby, director of the health services management centre at Birmingham University, said: "PCTs are very interested, with some excited about the potential, but [they] probably do not understand the background or nature of the policy."
Asked whether it will take off, he said: "The jury is genuinely out. The key will be keeping it simple."