Following the collapse of Southern Cross and the abuse scandal at Winterbourne View, many are calling into question the future use of residential homes for those who need care and support. In the modern care system, where independence and empowerment are the order of the day, the traditional nursing home doesn’t seem an easy fit.

But residential care – by that I mean care settings which include some accommodation component – will always be necessary and, more importantly, in demand. Residential care of the future may not look like the traditional “care home”, and they may not support the same numbers of people as they do now, but residential care settings – be that extra care, small units, shared lives or hybrid care/extra care homes – will always be a vital source of support, particularly for those with complex needs.

If we accept this fact, then a potential difficulty arises. How can this sector be compatible with the government’s personalisation agenda? Personalisation, for the government, is essentially interchangeable with the concept of personal budgets and it has set a target of 100% take-up of personal budgets by 2013.

This means individuals given a personal budget will be tasked with purchasing an individual package of care to meet their needs, bringing together traditional elements of care with other services such as transport, leisure or social activities. The practical difficulties of achieving this in collective care settings are immediately obvious. How can a person living in a residential care environment (of whatever form it might take) purchase individual support from the on-site care team? How can the individual buy in a wider range of services (everything from a chiropodist to alternative therapies) when living in a care home? How can the individual dictate their social and leisure activities based on their purchasing power, when social activities are delivered and arranged collectively on site?

Of course these things are possible, with a lot of effort on the part of the residential care staff and reorganising the services of the entire resident population.

Dee View Court, a Sue Ryder home for patients with neurological conditions in Aberdeen has undergone something of a democratic revolution, with residents making decisions about everything from which staff are recruited to how communal space is used. But it’s clear that when personal budgets were first conceived, they were seen as an individual consumer tool and a path to independence. This is perhaps demonstrated by the fact that direct payments (the cash form of personal budgets) are not yet available in care homes (a legal anomaly that the Law Commission has proposed to close as part of its single care statute).

So the big question for government now is how to square the circle – how to push forward the personalisation agenda, while recognising that some care populations, including those in collective care settings, palliative care and others – may not adapt easily to the primary method of achieving personalisation: the personal budget.

The answer seems self-evident. Personal budgets are life-changing, no doubt, but they are a fundamentally individualistic tool. They work best when an individual is co-ordinating a single package of care without the constraints of group living or sharing of services. Rather than trying to retro-fit personal budgets into collective care settings, therefore, we must embrace alternative paths to personalisation.

Co-design of services, democratic structures, imaginative use of collective spaces to encourage greater independence within care homes are all viable ways of turning care homes from sites of collective disempowerment and passive service use into “micro-communities”, which, very much like housing co-operatives, are run by a powerful residents’ association to ensure services are organised and meet the needs of the collective. Such settings could even be compatible with the pooling of personal budget funds. Of course, individuals may have to give way to the majority now and then – but this natural give and take of human society is a far cry from sacrificing one’s individual preferences due to management diktat and organisational routine.

Until the government shakes its fixation with personal budgets as the only and most effective method of achieving personalisation, however, these alternatives will remain fatally under-developed. And as personal budgets are rolled out, personalisation will increasingly become an exclusive right to be enjoyed by the few, rather than the many.

• Claudia Wood is the author of a new Demos report on personalisation, Tailor Made