WRITTEN EVIDENCE
SUBMITTED BY
ESSEX COUNTY
COUNCIL (LOCO 068)
EXECUTIVE SUMMARY
¾ For
localism to work, Whitehall will need to let go and local areas
need to be empowered. Whilst a degree
of accountability to the centre will remain, Place Based Budgeting
and other localism approaches mean a change for national government
and indeed for local government as decisions are moved to the
lowest practicable level. Whitehall departments will need to radically
review the way budgets are allocated to localities. In much the
same way that County Councils will devolve budgets to local forums,
so must central government.
¾ We
support strengthening the relationship between services and the
citizen. Democratic accountability will
be at the forefront of this change in emphasis and the ability
for the citizen to influence decisions, to deliver the services
themselves and to take ownership of those services they need and
rely on. The citizen will also have more of a vested interest
in those who represent them and to that end a welcome consequence
will be a massive re-invigoration of interest in local matters,
local democracy and local accountability. It will be the citizen
who will best give an oversight of local authority performance
at the ballot box.
¾ Place-based
budgeting provides the opportunity to get 'more for less' out
of public sector resources and services.
By drawing public funds into a single locality-focused budget,
services would be targeted more effectively on local needs. By
targeting specific local needs, rather than delivering centrally
prescribed programmes, local partners will also have greater opportunity
to improve outcomes and reduce spending.
¾ A
locality-focused budget could provide powerful incentives to investment
in preventative interventions, reducing the medium to long-term
cost to the public services. With all
service providers accountable to the same local commissioning
board, 'split incentives' would be removed entirely from the local
public sector. Historic problems associated with fragmented responsibilities
and ambiguity over different agencies' roles would also be removed
if partners were brought together around a single budget, with
a strong focus on outcomes. This model would ensure that interventions
are linked and sensitive to local circumstances, helping contain
costs and deliver improved outcomes.
INTRODUCTION
1. Essex County Council welcomes the opportunity
to contribute evidence to the Communities and Local Government
Committee's inquiry into localism. The difficult economic times
we face focus our efforts to bring about the most cost effective
service delivery to our residents which will mean a radical and
challenging change in attitude from the public sector, the voluntary
and third sector and indeed the private sector. October's Comprehensive
Spending Review will likely offer a once in a generation opportunity
to overhaul the way we go about delivering services. The time
is ripe for responsibilities to be delegated to the most practicable
hyper-local level.
2. For many years Essex County Council (ECC)
has been a committed proponent of localism and has been at the
forefront of devolving power, budgets and responsibilities to
local communities. ECC has constantly strove to ensure that our
residents have the ability to control matters that relate to them
directly at a level that is most relevant.
3. Last year the public sector spent £10
billion in Essex and it is likely that this figure will shrink
significantly in future years. Central decision making on how
to spend this dwindling budget will be forced to become a thing
of the past. We welcome government announcements that roll back
the influence of Whitehall and leave it to local communities and
neighbourhoods to best decide what services they feel are important
to them and who will carry them out. We would argue with the Public
Services Trust that, given imminent reduction in budgets, there
should be a move toward "more for less" - move responsibility
even if this is over less funding.
4. Essex is a large county with a population
of 1.3 million. With twelve district and borough councils and
over 284 parish and town councils, nearly fifty of which have
been accredited with Quality Council status, Essex is well placed
to continue down a place based budgeting route. A degree of democratic
accountability has to be maintained when considering the devolution
of public resources and this needs to be extended to include the
commissioning of health and social care, police and fire service
budgets at the most local level.
The extent to which decentralisation leads to
more effective public service delivery; and what the limits are,
or should be, of localism
5. It is a truism that the man in Whitehall doesn't
know best. Our own Total Place style pilots in Tendring district
demonstrated the value of engaging those citizens who use the
services the public sector provides. A locality-focused budget
offers an opportunity to move from a supply-side to demand-side
approach which views citizens as active agents, not passive recipients
of services. An improved citizen experience is the natural concomitant
of services that residents are better able to shape.
6. For example, by tailoring and linking decisions
on benefits, social housing, health and social services and transport
development, local commissioners may be able to address longstanding
regeneration issues, persistent long-term unemployment, health
inequalities and other ingrained societal challenges. Historic
problems associated with fragmented responsibilities and ambiguity
over different agencies' roles would also be removed if partners
were brought together around a single budget, with a strong focus
on outcomes. This model would ensure that interventions are linked
and sensitive to local circumstances, helping contain costs and
deliver improved outcomes.
7. As far as limits are concerned, subsidiarity
means at the lowest practicable level. Some services, personal
care being the prime one, can easily be administered by the individual.
Decisions on planning, schools, roads, defence are all, by contrast,
less suitable to be devolved to that level.
8. October's CSR is widely expected to herald
in an age of public sector austerity measures as the chancellor
announces plans to tackle the national deficit. It is perhaps
poignant that throughout the sixty years since the war, decisions
on public sector spending have progressively been increasingly
taken at the centre. Devolution to the Scottish Government and
the Welsh Assembly aside, in England, there has been little progress
towards locality budgeting and the top down approach has become
the expected norm.
9. The brief foray into regionalism did little
to bring decision making on budgets to a local level and instead
introduced a layer of unaccountable, unrepresentative bureaucracy.
Since the present government came to power, however, and the abolition
of those bodies announced, it is clear that a shift is occurring
and that through the Big Society agenda, local government has
a unique opportunity to come to the fore.
10. Diktat from the centre, in the form of ring-fenced
funding to suit national priorities along with guidance and directives
have also become the expected norm. We are facing exciting, if
not a little anxious, times as the directives and informatives
from government departments dry up. In this hiatus, there is a
chance both for local authorities and David Cameron's Big Society
to step up to the mark to take the initiative locally. This is
where councils can and should show leadership in the transition
from a nationally driven policy framework to more local solutions.
11. There can be little doubt that local people
know what is best for their localities. ECC has a proven track
record in devolving decision making powers downwards. The Community
Initiatives Fund, or CIF, is one such example. By returning capital
receipts to local communities in grant form has allowed a raft
of community led projects to come to fruition. By keeping bureaucracy
to a minimum, community involvement to a maximum and a broad and
objective view of how money is spent, hundreds of communities
across Essex have benefitted in one way or another from CIF -
from projects costing £500 to capital investments of £50,000.
12. Geographies and communities vary greatly
across the country. Participation in local democracy, willingness
and ability to volunteer time as well as the cohesion of neighbourhoods
is not uniform. However, there is always evidence that where local
interests are challenged or effected by outside influences (or
often in the case of antisocial behaviour and crime, from within),
when enabled, local communities can and do rise to the challenge
of addressing these issues and finding solutions. The lesson to
all in government, at whatever level, is to allow this spirit
to be freed, not contained, and to nurture it, not stifle it in
rigid structure, bureaucracy and regulation.
13. ECC has also had a very positive intervention
with parish and town councils. By providing advice, funding for
IT equipment and other support measures, fifty parishes have been
accredited with Quality Council status. These councils are key
to delivering localism. They have the expertise and wherewithal
to commission services; they can manage budgets competently and
have democratic accountability at the most hyper-local level.
As a county council, we can support the procurement and commissioning
process for services, add value to the community led planning
regime and ensure that no neighbourhood is left behind when it
comes to be being represented and having resources allocated to
it.
14. The Conservative Party's Paper on Open Source
Planning[22]
raises some interesting questions around the level at which planning
decisions need to be taken. There is no reason why planning decisions
(and indeed subsequent planning benefits) should not be made and
benefited from at the most local of community levels, whether
that be parish or town council or neighbourhood level. Devolution
does work. Government needs to recognise the realities of this
and lean upon departments who may be reluctant or nervous about
handing down control or resources. This means matching the locality
rhetoric with reality and this will mean devolving funds to those
organisations or communities that are best able to shape the solutions;
and realising the need for a common integrated approach built
around the citizen.
The lessons for decentralisation from Total Place,
and the potential to build on the work done under that initiative,
particularly through Place Based Budgeting
15. That the public sector does not act as one
is already a cause of frustration for many. In an age of retrenchment,
though, this territorialism is increasingly untenable. A locality-focused
approach would help tackle the departmental mindset that militates
against a "single public sector" approach.
16. A single budget would promote the incentives
public sector agencies have to enlist the help of local partners
and, by emphasising the holistic nature of interventions, would
help prompt partners to volunteer their help. Locality-focused
budgets would help combat the reluctance to invest resources in
a programme whose successful conclusion would not benefit the
funding organisation's own budget or performance metrics. Outcomes
would be more important than organisations.
17. Arguments for the benefits of place-based
budgeting are already well rehearsed. Simply put, a locality-focused
budget should deliver:
¾ Reductions
in service costs at the level of both central and local government;
¾ More
effective use of public funds;
¾ Greater
emphasis on preventative services; and
¾ Enhanced
customer experience.
18. Total place demonstrated the challenge faced
by authorities and the scope to improve services and reduce costs
by devolving services. Whilst Essex was not an official pilot
area for Total Place, the Essex Partnership undertook two "Total
Place" style pilot projects. Geographically and sectorally
diverse, the pilots highlighted a number of issues - conflicting
incentives; confused accountability and a focus on the convenience
of the state of the citizen.
19. Place Based Budgeting would also help reduce
duplication and fragmentation within local services. Essex's own
Total Place style research has shown the panoply of provision
faced by citizens. Clearly no public agency sets out to be deliberately
obstructive. Yet, on a single street in a seaside town in Essex
there are four different public agencies with which young people
might need to interact, and with whom they might share basic personal
details. Bringing partners together around a single budget would
help reduce these 'multiple contacts' (and remember that each
contact incurs a cost), enhance data-sharing between public agencies,
and deliver substantial improvements in the customer experience.
At the very local level the neighbourhood based budgeting
concept would not be expected to deliver substantial savings but
rather work to promote hyper-local decision-making allowing local
communities more control over how anticipated funding reductions
affect their area. The fundamental value of a hyper-local, geographically-focused
budgeting is in the promotion of local democracy: communities
will have a more direct role in influencing the decisions that
affect their lives.
20. With this in mind, Place Based Budgeting
would appear best when it is:
¾ Based
on a defined area containing distinct localities which have resonance
with local people;
¾ Supported
by robust hyper-local governance structures;
¾ Committed
to neighbourhood-based decision making;
¾ Backed
by willing partners with a track record for innovation; and
¾ Delivered
within acceptable levels of risk.
The role of local government in a decentralised
model of local public service delivery, and the extent to which
localism can and should extend to other local agents
21. As a locally democratically accountable body,
we would expect local government to play a key role in providing
accountability to the public for the public money spent locally.
22. The devolution of control and budgets will
require a change in attitude from a range of public service organisations
- including Whitehall departments.
23. ECC firmly believes that localism is applicable
to far more than local authority services. Indeed, it would be
valid to argue that, under the subsidiarity principle, public
spending of all kinds should be devolved as far from the centre
as possible.
24. There is clear scope for greater local control
of all local and national public services. Indeed to suppose that
localism can work without significant areas of spend in health
and welfare benefits is open to debate: particularly given the
entrenched health and welfare issues facing the UK today.
The action which will be necessary on the part
of Whitehall departments to achieve effective decentralised public
service delivery
25. For localism to work, Whitehall will need
to let go. Whilst a degree of accountability to the centre will
remain, Place Based Budgeting and other localism approaches mean
a change for national government. Whitehall departments will need
to radically review the way budgets are allocated to localities.
In much the same way that County Councils will devolve budgets
to local forums, so must central government. This will, of course,
be counter-intuitive to some and will require some brave decisions
by ministers. Whilst there will be exceptions to the general rule
that there are no sacred cows when it comes to retaining funding
at a Whitehall level, these exceptions should be few and far between.[23]
26. The question of devolving performance management
functions and responsibilities is also likely to cause a cultural
shift in Whitehall. Localities will be presented with a finite
pot to spend in each financial year. It is for them to best manage
that and to be judged locally on how it is managed.
27. Medium to long term financial consistency
is essential. A common criticism of central government is that
announcements have been made of money committed to specific schemes
and initiatives that either do not materialise or are much diluted
when they reach the local level. With new place based budgeting,
ministers and their departments will have to accept that the days
of nationally launched initiatives are numbered.
28. The contract that must remain is the year
on year consistency of funding wherever possible. Some organisations
(ie schools) are well practised in keeping a level of reserve
to meet contingency shortfalls in funding. Others, particularly
in the voluntary sector are not so and locality forums will need
to be assured by central government that the locality budget is
going to be consistent, year on year, in the medium to long term.
The impact of decentralisation on the achievements
of savings in the cost of local public services and the effective
targeting of cuts to those services
29. By drawing public funds into a single locality-focused
budget, services would be targeted more effectively on local needs.
Commissioners could bring their knowledge of local communities
to bear in a way that national programmes - whether delivered
through ring-fenced grants or locally active quangos - have failed
to do. By targeting specific local needs, rather than delivering
centrally prescribed programmes, local partners will also have
greater opportunity to improve outcomes and reduce spending.
30. Under a locality-focused place-based budgeting
model, local commissioners will be better placed to link decisions
and take a 'whole public service' approach to intractable social
problems.
31. A locality-focused budget could provide powerful
incentives to investment in preventative interventions, reducing
the medium to long-term cost to the public services. With all
service providers accountable to the same local commissioning
board, 'split incentives' would be removed entirely from the local
public sector. Short-term costs in a policy area controlled by
one department would no longer be a barrier to the long-term benefits
that might be enjoyed in another. The financial and social benefits
of prevention would accrue to the 'whole system' rather than to
disparate service providers. The taxpayer already thinks in terms
of a single public sector - it is time for the public sector to
catch up.
32. As commissioners look to vary the local service
mix in response to changing circumstances, services can be decommissioned
safely without unintended costs and consequences being passed
from one part of the public sector to another. A locality-focused
budget would allow cuts in spending to be viewed in terms of their
wider impacts and costs rather than their impact on a single organisation's
budget or balance sheet.
33. Yet to view locality-focused budgeting as
solely a means by which to bring together the public sector with
a view to improve processes is to miss the point. Whilst process
and service improvements do make a difference to those who use
a service, helping to minimise the structures that exist for the
convenience of the public sector not the taxpayer, the potential
to devolve funding means there is a further opportunity - namely
to see citizens play a greater role in deciding and designing
the services they value.
34. Total Place pilots suggest a range of savings
- from back office and support functions through to redesigning
delivery functions. Whilst these have yet to be realised, moves
to a single coherent approach to local public services appear
to offer scope for intelligent savings.
What, if any, arrangements for the oversight of
local authority performance will be necessary to ensure effective
local public service delivery
35. The taxpayer, or the citizen, is at the heart
of the localism agenda. As already mentioned, the structures that
commission or deliver services will be moulded and determined
by the citizen. Democratic accountability will be at the forefront
of this change in emphasis and the ability for the citizen to
influence decisions, to deliver the services themselves and to
take ownership of those services they need and rely on.
36. The citizen will also have more of a vested
interest in those who represent them and to that end a welcome
consequence will be a massive re-invigoration of interest in local
matters, local democracy and local accountability. It will be
the citizen who will best give an oversight of local authority
performance at the ballot box.
37. Internal executive scrutiny of councils will
continue to operate and an element peer review between councils
will also ensure a consistency of standards.
38. Checks and balances can be introduced locally
to ensure that citizens are getting the services they need and
that the vulnerable do not fall through the net. Councils and
other service providers, at whatever level will be required to
operate within the law and statutory obligations are in place
to deal with this.
How effective and appropriate accountability can
be achieved for expenditure on the delivery of local services
for that voted by Parliament rather than raised locally
39. As already stated, in order for localism
and Place Based Budgeting to be successful, Whitehall, and to
a certain extent, Parliament is going to have to let go and trust
citizens to commission and provide the services they need in their
localities. This will include a virtual cessation of initiatives
and funding commitments from the centre.
40. Where it is absolutely necessary for funding
to be used for a specific purpose identified by Parliament, it
will be for central government to agree a compact with local commissioners
on how best to administer the allocation of funding. In this way,
a double check for spending public money is established whereby
if Parliament require money to be spent on a specific initiative,
local commissioners will be best placed to determine whether their
locality actually needs that funding for that particular purpose.
41. In the event of emergency (human or livestock
pandemic for instance), a more pragmatic approach will need to
be adopted but the negotiation still needs to take place between
commissioners and Whitehall as to how best to spend that money
locally.
CONCLUSIONS
42. Localism is reliant on responsibility and
decision making for funding being situated as close to the point
of delivery as possible. It does not only relate to what local
government is responsible for currently but includes most, if
not all, of public sector spend in a given area.
43. Structures will change and in some cases,
bureaucracies will disappear. Local accountability and peer review
will do away with the need for central audit and regulatory control.
44. Localism is based on and around the wellbeing
and satisfaction of the citizen. It is not there for the convenience
of the state or as a way of passing the buck. In order for it
to work it requires Whitehall to release its grip on budgets,
local government and commissioners need to mould themselves into
a framework that best suits that locality and individual citizens
need to take a more active and discerning interest in their interaction
with the services they need.
October 2010
22 Open Source Planning Green Paper No.14 , 2009 Back
23
Defence spending or the Rural Payments Agency is unlikely to be
ever fully devolved for instance Back
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