Evidence heard in Public

Questions 1 - 77



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Oral Evidence

Taken before the Communities and Local Government Committee

on Monday 16 January 2012

Members present:

Mr Clive Betts (Chair)

Heidi Alexander

Bob Blackman

Simon Danczuk

Bill Esterson

Stephen Gilbert

David Heyes

George Hollingbery

James Morris

Mark Pawsey

Heather Wheeler

Examination of Witnesses

Witnesses: Allan Cadzow, Assistant Director, Integrated Service Delivery, Suffolk County Council, Dan Gascoyne, Assistant Director of Corporate Policy, Strategy and Partnerships, Essex County Council, and Stephen Hughes, Chief Executive, Birmingham City Council, gave evidence.

Examination of Witnesses

Witnesses: Louise Casey CB, Director-General, Troubled Families Team, DCLG, and Baroness Hanham CBE, Parliamentary Under-Secretary of State, DCLG, gave evidence.

Chair: Good afternoon. Welcome to the three of you, and thank you for your written evidence. This is a one-off evidence session on community budgets. For the sake of our records, could you just say who you are, and the organisation that you are representing today?

Allan Cadzow: Allan Cadzow, from Suffolk County Council.

Dan Gascoyne: Dan Gascoyne, Essex County Council.

Stephen Hughes: Steve Hughes, chief executive, Birmingham City Council.

Q1 Chair: Thank you. You are all welcome. If you find that something has been said that you agree with, it is not necessary to repeat it. Just indicate your agreement. That is absolutely fine and we make good progress that way.

Community budgets were flagged up as an aspect of localism and transferring responsibilities down to local level. How far do you think that is now the case, looking at the troubled families initiative? Are they becoming much more of a centrally controlled, centrally driven Government initiative?

Stephen Hughes: You probably have to look at the community budgets initiative as part of a longer time scale, so the issues that we are trying to tackle within community budgets can be tracked back to local area agreements, and what was, under the previous Government, Total Place-as well as what we have got here. The basic proposition is that you have got some groups of people who have maybe as many as 30 different public agents talking to them, in different guises, and there has got to be a better way of doing it; and the community budget initiative is trying to find a solution to that problem. To be honest, I think local government would be trying to find an answer to that question regardless of what the Government’s initiative would be. It is helpful, I think, that the Government recognise that this is an issue as much for them as it is for us, and that we are together trying to find ways of making it work.

Dan Gascoyne: Just to add to that, I do not think we should confuse the families with complex needs community budget pilots with the troubled families unit, and the announcements in that respect. I think the two things are complementary. By way of example, in Essex we have been leading on a programme called Essex family, which is a direct response to the announcement in the spending review about families with complex needs, and is one of 16 pilots. We are doing some really important work, which, as Stephen says, is dealing with some of the system issues around those sorts of families. At the same time, we are very optimistic, and responded positively to the announcement from the troubled families unit about the opportunity for greater resource for the family co-ordinators. I think the issue is balancing the two things. The community budget programme has the opportunity for longer-term systemic change, but you need to take your time to do that properly. The work on the troubled families unit gives us a chance to increase the resource and reaction to those families here and now, and try and turn some of those lives around.

Allan Cadzow: I would agree with what has been said, but I would also say that Suffolk had recognised earlier that the way we worked with a lot of troubled families was inefficient and ineffective, and we had actually taken steps to start doing that differently already; so we welcome the changes that community budgets will bring.

Q2 Chair: With the troubled families issue, though, there is the attempt to give the indication that this is what the Government intend to happen; and you will then develop your community budgets to support it, rather than have the freedom to develop the community budgets in accordance with the particular needs of your area.

Dan Gascoyne: The way I see it, we do have the freedom to design the community budget to exactly deal with the needs of our area, and that is certainly the approach we are taking with the Essex family initiative; but I think that does not prevent us from also responding positively to the announcement on the troubled families unit and the increased investment, to deal with the Prime Minister’s concern to turn around the lives of 120,000 families. Where we are going on community budgets is to say, well, actually, you cannot just add additional resource through troubled families co-ordinators. That is great, but all that does, in a sense, is add a bit extra on to an already complicated system. It is absolutely the case that family intervention programmes are really good for families that they deal with. They turn lives around. They reduce costs. What they do not do is deal with the fundamental complexity of the system at the heart of the problem. That is where we are trying to go with community budgets.

Q3 Stephen Gilbert: Can you describe for us your relationship with central Government, and the support mechanisms and administrative mechanisms that there are for community budgets?

Stephen Hughes: It works at lots of different levels. Obviously there is some specific detailed connection between the project teams that are working in the localities and opposite numbers, particularly within DCLG, and in respect of other Government Departments it tends to be local agents of those Departments. But, there is also contact higher up the organisation, both at political and officer level, with key officers within DCLG, but also within DWP, the Treasury for that matter, and to some extent DFE and DTI. So, all Departments have some kind of connection, but for the practical purposes of the day-to-day operation-what the process is going to be-it is about DCLG putting in lead officers, and their talking to the project teams.

Q4 Stephen Gilbert: Is that reflected across the other two authorities as well?

Dan Gascoyne: Yes.

Allan Cadzow: Yes.

Q5 Stephen Gilbert: Thematically, or by Department, are there examples of good practice within that relationship? You mentioned pretty much the whole alphabet soup of Whitehall Departments. Are some better than others, or are some themes, in terms of delivery on the ground, more effective in that co-operation-arrangement-than others? What are the key characteristics of why one might be successful and others not so successful?

Stephen Hughes: Part of it is to do with the extent to which you have local accountability for the delivery of services so, in general, practical working relations with health professionals, through the PCTs, and the police, are good. Those with DWP and the Home Office-the Ministry of Justice-type services-are much less good because they do not have the same kind of local agents and it is therefore really difficult. DWP is a good example, because it has national programmes to deliver to national standards, but local people have very little flexibility to respond to local circumstances, either by flexing their budgets or operating in a different way from the national programme. We have very good working relations with the Department, but the difficulty is the structure of part of it.

A point I wanted to make, and which I will make now, is that it is not just about the departmental structures; it is also a lot to do with professional barriers. Many of the people who are being looked at, or whose lives we are trying to affect, come into contact with a range of different professional disciplines, and there is a lack of willingness on the part of one set of disciplines to believe what another is telling it, which itself causes some of the duplication-you have multiple assessments of individuals and a lack of willingness to share data. I am not saying that sharing data cannot be overcome within the frameworks we have available, but there is a resistance to do that because of a kind of protectiveness within individual professions. So, I think that the professional barriers are at least as important as the departmental ones.

Q6 Stephen Gilbert: Is that professional myopia something you have experienced? Can you expand?

Allan Cadzow: Yes. It is probably the biggest challenge. It is relatively easy to change structures, and more difficult perhaps to pool budgets, but we find that changing professional culture is the hardest nut to crack. As Dan said earlier, although FIPs have been a fantastic thing to some extent and have worked on the side, what we have done in Suffolk is to integrate a lot of the FIP workers into teams, which has helped to change the practice and professional cultures in those teams. If you don’t do that, family intervention can become a project on the side, and people keep on intervening in a rather unhelpful way. They do lots of stuff to families, but it does not engender any change, so you need to change the professional culture to one in which we expect families to change, and I think there is too little of that.

Dan Gascoyne: I certainly agree with that. We use the term professional sovereignty as much as we do political sovereignty, as an issue in community budgeting, and certainly for our successful application to be a Whole Place community project pilot, one of the things we are really looking for is much closer integration across those sorts of boundaries. We talk about integrated decision making, integrated resource planning and integrated commissioning, and fundamentally about an integrated sense of what the outcomes are that we are all trying to achieve as a set of public sector providers in Essex.

One example of what Stephen mentioned is DWP, and it is interesting how the ESF programme for families with multiple problems has played out. We were really pleased to have the opportunity to contribute in the later stages to some of the way in which that was shaped more recently. It is clear that local authorities have a key role in terms of referrals, but I think what was missed was the opportunity at a much earlier stage to look at the design of that whole programme and how it might fit in with approaches to community budgets that were already well developed in places.

Q7 Stephen Gilbert: Do you get the sense, Stephen, that some Government Departments have embraced the localist agenda, and others, because they are designing national programme for delivery on the ground, are slightly more resistant?

Stephen Hughes: That has been the case, and until more recently DWP was probably the most difficult to deal with, but I recognise some movement from it, particularly in the context of encouraging prime contractors in the Work programme to engage with what’s happening on the ground. There is a move to allow local flex of some of the local budget, so there has been some move there.

It is interesting that there’s been a shift, and the more recent problem areas have moved back to health because of the uncertainties about what the field will look like. At what point will there be a creation of PCT clusters, what is their long-term future, and when will the clinical commissioning groups get authority. There’s a degree of uncertainty about who’s in charge in the health field, which is causing uncertainty for staff, and therefore uncertainty with trying to get things changed.

Q8 Stephen Gilbert: I think it has been implicit in some of what you have already said, but what two or three key improvements would you like to see going forward? We have talked about breaking down professional sovereignty, empowering teams on the ground, and reducing some of the centrally designed systems, but are there others you would like to bring out now?

Stephen Hughes: One of the propositions that the Government usually say to us is demonstrate what the barriers are and why they are getting in the way, and they will do something about getting rid of them. In many instances, you can probably find a structure within the existing powers of authorities to do what is being requested of you. It is just more difficult without some of the changes you would like to have. I would say there are three broad areas that one needs to look at.

One is the idea of whether one can get such a thing as a local accountable officer who is taking responsibility for multiple funding streams in one place back to Parliament, because then there is a possibility of getting authority over the money. Alternatively, can you get local sign-off, whether that is the local authority or the LEP, or some other local body that has some right of signing off what the spending plans of other bodies are in that locality so that there is sufficient influence? Failing either of those things, I think one of the lessons we have learned is that for doing difficult stuff like this-voluntary partnerships are very difficult-if you can find some contractual method of commissioning jointly agreed outcomes with a clear idea of who is taking shared responsibility for paying for those over time, you are more likely to get progress. We have found, for example-it is a good example-that by having robust section 75 agreements on mental health and learning disability, we have been able to improve considerably the outcomes for other clients, and drive down costs as a result of that, but that is predicated on there being a contractual relationship, so that everyone is clear about what their responsibilities are. When we were trying to do it voluntarily between the two of us, it proved very difficult indeed to achieve the same sort of results.

Allan Cadzow: I agree. We have got a section 75 agreement in Suffolk for community health services. That just means that health visitors and school nurses are part of MCYP services, so that is then incredibly beneficial in terms of integrating services and doing things differently, and thinking differently.

Dan Gascoyne: I would just add one thing, which is the level of central Government and ministerial oversight of these programmes in particular. That is an area that could be improved upon, so that, for example, regarding the Whole Place community budget pilots and the network that is around to support those, it is understood across Departments that these pilot programmes have the potential for real whole system change. That is not going to happen if they are seen as just an interesting pilot on the sidelines. They have to be taken seriously at the core of Government.

Q9 James Morris: You talk about trying to promote whole system change. I may be looking at this rather simplistically, but the words "community budget" imply, first, that there is money and, secondly, that somehow that is devolved to a community. From what I am hearing you say, we are still trapped in a kind of bureaucratic exchange between central and local government. Are we really achieving community budget in the sense that there is an involvement in a community that has some needs that it defines and then it is enabled to spend money appropriately to solve that problem? Or are we a long way from that?

Stephen Hughes: This is also about what you do at different levels. Part of this is about to what extent communities can get involved in shaping services that meet their own needs. That is precisely the objective we are trying to achieve with the Shard End budget proposal, which is one of the local community budget proposals. I might say a little bit more about that later. Some things are about the system as a whole. I support what Dan has been saying. You can run a pilot that has brilliant results for the families that are affected, but because you have not changed the basic system, you have not really changed anything around the costs or the delivery of it because the system gets filled up. We are all rationing, so if you take some of those families away, what is left will get filled up with something else. You will not have changed anything.

Unless there is a fundamental approach to changing how these services are delivered across an organisation, you will not achieve the kind of benefits that the pilots sometimes demonstrate you ought to be able to have. That does require an organisational approach and some kind of approach whereby you are creating multi-disciplinary teams facing families. Yes, you then need to talk to the communities themselves about how they want those delivered and what the attractions are, but this is not simply going to be done by local communities.

Q10 James Morris: Just coming back to the point that Clive made, are we not in danger of central Government specifying what they think the problem is and creating a structure by which they think they will solve it? We would then be getting back into the old game of negotiation between local and central government in order to deal with a problem that central Government have defined.

Stephen Hughes: I think we have all agreed that we know what the problem is. What these pilots are designed to do is to find a solution. Partly because we are looking at a number of different approaches in different areas, there may be more than one proposal coming forward. I do not think that this is about central Government telling us in a top-down way, "This is how you’re going to do it." It is actually about them putting in some resource and asking us, "How can we do it? What are the constraints that are getting in the way? How are we going to address them?"

Allan Cadzow: The solutions will inevitably be very different. Birmingham is very different from rural Suffolk, and the solutions will be very different.

Q11 Heidi Alexander: That probably leads quite neatly on to the questions I wanted to ask you about the degree to which there is enough flexibility built into this programme to allow local variations. I note that, Mr Hughes, you said that you might talk about some of the work that you are doing in Shard End. It would be useful to have a very brief description of what you are doing and whether you feel that flexibility is there or not for you.

Stephen Hughes: We are doing lots of different things at different levels. We are working with the Cabinet Office on the potential social impact. We are doing some broad policy work to understand the relationship between public sector interventions and policy outcomes. But, in this context, in terms of community budgets, Shard End is the most interesting case. Some methodology has been developed in the States and has been proven to work there about how you get communities involved. We have been working with Dartington-i about how we can take the elements of that and put them in place in one place. One of the key components is creating a local board which has representatives from key public agencies with authority to influence the spend that is taking place within that locality; it will have community representatives on it.

In our case, we have done quite well. I have got a leading member from each of the three parties agreeing to sit on the board, and we have got both police and health putting someone on, with the organisation prepared to let them take the decisions. We have already built up some infrastructure with the local community. The intention would be to use the board as a way of co-designing some of these services in that locality. We have put some money in already. Each ward within the city has got what is called a community chest, which is £100,000 for the ward members to use as they wish-that has been put in as part of the project-and there is another £400,000 or so of local projects that we have identified. So there is about £0.5 million of money there already for the local community to begin to discuss, but it is also about having conversations about the way in which some of these public interventions are taking place, particularly around support, the families, children’s services and so on.

That is the background. It is meant to be very much a local community approach to how we want these services designed in this particular area. The other two local areas have a slightly different genesis. Both of these forums have a long history of community, having particularly impacts around environmental issues, and that is one of them. Castle Vale, which was based on the old housing trust or HAT as I think they were called, has ambitions to take over a whole range of community assets, and a big community asset transfer process is going on there. So slightly different approaches in different places, but the Shard End one is the one that I am most interested in because it is, in a sense, a new approach to this old kind of problem.

Q12 Heidi Alexander: And in Essex, Mr Gascoyne, could you say something about how the community budget approach has helped you to develop new models of service delivery, in respect of troubled families in particular? What are you doing in Essex?

Dan Gascoyne: The starting point for the Essex family community budgets was not to look across the whole of Essex, for a start, because one of the issues for Essex is that it is a very large, complex county-a two-tier area with 12 districts, two unitaries on our doorstep and five PCT areas-so if you look across the whole county, given its diversity, you do not get too far. We started by saying that we wanted to do this from the bottom up, and we are working with five localities-six actual district council areas-where we already knew there was a higher prevalence of families with multiple problems and where we had some experience of the FIT programmes, so we had some confidence that partners were in the right space as it were to do further work. It has been very much working with families from the start, understanding their needs and then looking at how we can prototype new approaches to working with them that will, we hope, be scalable to achieve a more systemic change across Essex. That is the broad methodology.

Of the work we are doing, for example, some of the ideas that are coming through are around community resilience. We know that a large part of the problem with some of these families that are dependent on services is, for example, that they may have been rehoused away from friends, family and the sort of support networks that are actually the very thing that could help them be less dependent upon public services. So we are trying to see how we can actually look at things like housing policy, and consider whether we are not just building in some of the complexities for these families. We are looking at how we can have a common assessment framework across partners. Some of the work that we did with the Baroness Hanham group was looking at how we can simplify assessment, in terms of how families experience it and in how we join it up, which links up very much with other work that has been going on around data sharing, for example. We have been looking at family budgets, again in line with the personalisation agenda, and at how we could actually structure budgets around families.

Another important issue is the point about the community budget sounding a bit like a misnomer, but that should not be overemphasised as part of a problem. It is up to us to define the community budgeting approach that makes sense locally. The personalisation agenda, greater citizen’s choice and control and patient-led services all fit in with an approach to community budgeting locally.

Q13 Heidi Alexander: All of that sounds great-very impressive. I am struck by the fact that sometimes individuals and families at a particular point in their lives reach a crisis point. I probably had such an individual and such a family at my surgery on Friday. This was a young woman who had been sexually abused. She had been out of school for a year, and there were problems with housing. Someone with significant clout just needed to say, within the local authority and to everyone involved, "This needs to be sorted." To what extent will your pilots result in those individuals being picked up and the right form of support placed around families such as that? How confident are you that the scheme in Essex will address those sorts of problem?

Dan Gascoyne: There are a number of levels to this. One issue that we have been trying to balance through the process of piloting is that we need to deal with those individuals and families who are in the most acute need and we need better systems to help them across agencies-that is about how we work together and integrate our services, information and response to those families-but there is also a really important dimension that is more about system change and trying to avoid the issues for individuals and families who are at a lower level of need escalating so that they are in greater levels of need. I am talking about de-escalation and avoiding people getting into that situation in the first place, and also the much deeper system change issues that I talked about earlier, which are really about early intervention and prevention. It needs to operate on all those scales of intervention.

Q14 Heidi Alexander: The community budget stuff took a long time to get going. The Government announced it in October 2010. Then Eric Pickles picked up the baton in the summer of last year. We have subsequently had the Prime Minister’s announcement on troubled families. Have you seen a difference in terms of the focus that is coming from central Government on community budgets and troubled families?

Allan Cadzow: Yes, I think there has been a focus. I think there has been a central Government realisation that probably ties in with the one for those of us who have worked in local authority services for quite a long time-that what we do in our silos and with some of our professional cultures is not working and that we need to change. That has come from all sorts of people, so there is a joining together in a realisation that what we do has not worked and we need to do something different. In relation to the kind of family you describe, we need to do something different. We need to make sure we deliver services quicker, better, more effectively and in a more joined-up way.

Q15 Heather Wheeler: I apologise if someone has already asked this question, but as most of the MPs on this Select Committee are new MPs and this is a new push on community budgets, have you thought about a protocol whereby you could get the MPs in your areas together and say, "You may have an issue like this at a surgery; you’ll be finding these people almost as much as any of our people or councillors"? Is there something that you can do to ensure that your MPs know who to go to and that it’ll be picked up at a one-stop shop?

Allan Cadzow: I think our local MPs do know who to go to. We certainly have good relationships with our local MPs, and they do come forward with issues, although I have no doubt that could be improved upon.

Stephen Hughes: The objective would be to get to a situation in which it did not require someone going to an MP’s surgery, the MP then writing to the chief executive or someone to say, "Sort this out," and us having to do that, because on that basis, there is not the capacity to solve everyone’s case. This is about, on the one hand, identifying the early risk factors. Let’s consider, for example, the kind of person you have flagged up. For a while, although they have a number of different needs, they are probably below any threshold for anyone to do any intervention. What happens is that things accumulate and they get to a level where they become a crisis. Part of what we have to do within these systems is identify a number of multiple low-level needs that indicate that we have to do some kind of early intervention, because when it gets to a crisis point, it becomes very expensive to fix. At a time of financial pressure, when everyone is looking at the sharp end, there is a real risk that these preventive programmes will be reduced and have less emphasis placed on them, whereas in practice they are the most important programmes. If we could get them to work, we would considerably reduce the sharp-end interventions that we would need to carry out. From a local government perspective, given what our finances are looking like going forwards we have really got to make this work in one way or another, because there is not going to be a way of sustaining our levels of service quality unless we are able to reduce the demand that is being put on our services.

Q16 Simon Danczuk: There is lots of discussion about pooled budgets and I just wondered if the panel thought that there was a need to pool budgets. Is it necessary?

Dan Gascoyne: If you think that pooled budgets are the outcome that you are looking for and they will solve all the problems, that is clearly not the case. We were quite clear in the proposal around the Whole Place community budget that it is not simply about pooling a budget of the £10.8 billion that the public sector spends in Essex every year into a single pot and somehow that will solve everything. What it is about, as I said before, is the integration between agencies and cultures to achieve the right outcomes for people in our care in our communities. You do that by starting from their perspective of what the system is like, where it is failing them and how we can make the necessary changes. If a pooled budget is a helpful enabler to make those changes, that is great, but I don’t think that we would start with the pooled budget per se.

Q17 Simon Danczuk: You don’t think a pooled budget is important then, Dan?

Dan Gascoyne: I think it is important-

Q18 Simon Danczuk: To have a pooled budget or not-yes or no?

Dan Gascoyne: Yes, absolutely. It is important, but I don’t think the be-all and end-all is simply to pool budgets.

Allan Cadzow: I think that a common purpose and pooled resources is perhaps more important. For example, in our family networks team we didn’t pool the budgets but the police gave a full-time police constable as a resource, so that pooled resource and the common purpose of the team actually made the difference. You can put budgets together and make no difference at all, because if you’re not changing the culture or the way people think, and if everyone is not pulling together in the same direction, a pooled budget does not make that much difference.

Stephen Hughes: I would reiterate the point I made earlier that voluntary partnerships work so far but they have their limitations, and when you come down to making really tough decisions about resource allocations they break down. So pooled budgets are one of a number of tools that you can put in place that ensure that you have shared accountability and shared responsibility for those outcomes in a way that forces the different agencies to work together rather than taking their bat and ball home and saying, "We’re not going to play anymore".

It does not have to be pooled budgets but there has to be some kind of glue that is stronger than simply an open willingness to work together, because that always runs the risk of breaking down whenever anything really difficult comes up. And there will be difficult stuff here-there is no doubt about that. So you either need some kind of contractual relationship, a pooled budget, a single accountable body or someone having oversight over other people’s spending and service plans. One or other of those things needs to happen if you are to make this proposal work across the country as a whole. Yes, there will be localities where you can get it to work because the personalities involved really gel together and there is a common drive to put it in place, but it only lasts as long as that relationship is in place. To make it work in a way that would deliver sustainable results over a long period of time, you need some tougher relationship between those local agencies.

Q19 Simon Danczuk: Just finally, Stephen, you have done some work on innovative finance. You have been working with Manchester city council around this sort of thing. Do you want to say a few words, or expand on some of that stuff?

Stephen Hughes: Yes. I have been working not only with Manchester city council and the GLA but with the Cabinet Office around trying to make what I suppose are generically called payment by results-type models work. There are a number of barriers in the way of making them work, but they are a mechanism to get this kind of fixed, joined-up approach. As I said earlier, the basic concept is that most of our money is spent on social cost in one form or another and if we have less social cost to pick up we would all be better off, but we cannot afford to put in anything on prevention at the moment because all our money is going on the sharp end. So the intention would be to commission people to deliver social outcomes that would deliver you cost savings, which you could use to pay for those interventions. The issues in the way are: what is the evidence that particular interventions improve social outcomes? What is the relationship between improved social outcomes and cashable savings? How long is the gestation of that investment? Is there a market there? Are private sector investors willing to put their money up and take those sorts of risks? Is the saving sufficient to repay everything that has been invested?

A whole host of issues have to be worked through. That is why you have got to start on a small scale with some pilots-which is what we are trying to do-in particular, focus on interventions that have a really clear relationship with return; for example, interventions that prevent children being brought into care. We can fairly readily identify the children who are most at risk. We know, broadly, the right interventions to make to prevent that happening, so there is a model there, which is one of the ones we are looking at, which says you commission people to reduce the intake of children into care. That, obviously, has a direct impact on your costs. It is one of the most expensive services that we provide. Therefore, you can make a business model stack up.

If you can get models like that working, you will raise people’s confidence that these payment by results-type models will work and bring in a wider range of investors. This will not work simply by Governments funding particular programmes. We talk about troubled families. It is welcome that that money is there, but, in a sense, it is only going to scrape the surface of the problem. The scale of investment needed in prevention to really solve the problem is much larger than that, so there has to be some kind of private sector investment in this to make it work. They need confidence that it is a model that actually will deliver returns for them. That is why we are doing that work.

Q20 George Hollingbery: There is a real conundrum, a Gordian knot, in all of this, isn’t there? That is where we are. You cannot have total local design of all local services, because there are national themes that need addressing: terrorism for the police, or counter-strategies fit for the health service. At the same time, you cannot have nationally designed localism, because the problems are not going to be the same in all local areas. Is it possible to slice budgets off at central level and recognise that x amount of almost any national budget will be better designed locally, and put that down into one pot, which is then dealt with locally? We have a question later about accountability, which is different, but do we think that that is possible? Will the analysis allow us to get there?

Dan Gascoyne: That is a tricky one to answer. I doubt that it is possible to come up with a generic formula that will work for all places. Part of the solution we have all been describing is the importance of a locally-defined solution and approach to system change. Again, back to this misnomer, if you like, or certainly the fact that a pooled community budget-a chunk of cash that is currently decided on centrally is decided on locally-is the solution. It is a much more complex solution than that, which, for us, depends on partnerships. I agree absolutely with what Stephen was saying about needing to formalise some of those arrangements at the right time, so that we do not just rely on good will, but those partnerships are going to have to operate across that central to local divide, as well as the horizontal integration that we have talked about with local partners. It is a complex piece.

Q21 Bob Blackman: Can we move on to issues of governance and accountability? Stephen, you have mentioned your aim of having a single accountable officer responsible for broad strands of moneys coming into the system. Could you just expand a bit on what that person’s responsibility would be? We have already heard, for example, about a range of different professional responsibilities. Is it just making sure that there is value for money? Is it making sure that the money is spent in a proper way? Or is it actually making decisions about what would be provided by whom?

Stephen Hughes: At a visionary level, the way the system works at the moment is that the Treasury finds 500 different ways of getting money out of our pockets, and then finds another 500 ways of giving it back down to areas to spend. We spend an awful lot of our time trying to knit those together, which is particularly difficult for voluntary organisations. There is a voluntary organisation in Birmingham called St Basils, whose responsibility or aim is to take young unemployed and homeless people and turn them into people who have a stake in society. They showed me once that they have 17 different bidding streams that they have to go through to get all the funding to do that simple task. In a sense, that is the problem. It is like that because Parliament divides the money up and votes it into different places, and then it requires Permanent Secretaries and Ministers to account to you for what that money is being spent on. That forces them, in a way, even when the money has been delivered at a local level, to put in place accountability lines so that they can tell you what the money is being spent on.

My view would be that if you could find someone in a locality-leave open the question who that person might be-to take on that accountable officer role, you would have someone who is effectively responsible for commissioning a range of different services in one place, and with different accountabilities upwards, but at least they would have the ability to commission local delivery agencies to do it in a joined-up way. This does not mean to say, if it was a local authority that was the accountable body, that we would want to take over and deliver things that are better done through the health service, police, the Highways Agency or anybody else. It is about following where the money is. In my experience, if you have control over the money, you have a much greater influence over what is actually being delivered with it.

Q22 Bob Blackman: Say someone reported to you as the chief executive of the city, and, as you say, they have control over the expenditure of the health service, the Highways Agency or whoever, are they then making the decisions about how that money is spent, or are they just the person responsible for accounting for it?

Stephen Hughes: In my mind, they would be responsible for ensuring that all the service plans and the budgets for all those agencies were signed off, and they would use that influence to ensure that there was proper joint service planning across different agencies. I do not see one person, of course, actually allocating money and controlling every penny, but I do see that as a role that would enable force, if you like.

Q23 Bob Blackman: In your model for Birmingham, how many accountable officers would there be? Presumably, there would be a whole series of these people. It would not be just one person looking after all the money.

Stephen Hughes: You could do it with one. You might want to do it with different themes. You might want to have an accountable officer, for example, for economic development, with one particular set of streams together. It does not have to be Birmingham. It could be that the local enterprise partnership would do that. In a context of social intervention, again you can see what the different strands are, but there are overlaps between them. The Work programme has a key part to play in dealing with some of the social problems.

Q24 Bob Blackman: Where does the democratic oversight come into that?

Stephen Hughes: If it was a local authority, then, of course, local politicians have a local democratic mandate, as you well know.

Q25 Bob Blackman: Absolutely. Moving on from you, Stephen, and a unitary authority with a reasonably strong structure, what about two-tier authorities? We have district councils, county councils and parish councils. Who has power?

Dan Gascoyne: We certainly do not have a clear view in Essex about how that might work. Part of the reason for embarking on the Whole Place community budget pilot is to test some of the assumptions and ideas that partners have got across the piece, and to see what comes from that. We have a pretty tight time frame to do that in, so from March until October there will be an awful lot of work going on in Essex with colleagues from Whitehall to try to understand the system better and see what opportunities there are for more local decision making.

Q26 Bob Blackman: Specifically, have you delegated any powers down to a district council? I do not know enough about Essex to know whether there are parish councils or not, but is there power going down to that sort of level?

Dan Gascoyne: We are really interested to test some of the ideas around that, so-

Q27 Bob Blackman: So have you tested it, or were you going to?

Dan Gascoyne: We are in the middle of testing it at the moment. Essentially the idea of devolution is one that is certainly at the heart of where we are going with some of the work we are doing with communities. We have recently been working with our districts to establish locality boards, which is a locally led initiative; but we have come up with a framework, which seems to be proving quite effective in a number of our districts, whereby, essentially, we have got county councillors for that division in a district working very closely on a locality board, which at this point is a pilot but could ultimately be a joint committee-type arrangement. Typically, it is the cabinet members from the district, so you have got both tiers represented around the table, with a really clear understanding about what the priorities are for the area. Clearly, there is a really important link, which we keep going back to, between communities and parish councils, and how they can play into those arrangements; but we are very keen to look at any opportunities there are to see greater local decision making.

Allan Cadzow: Similarly, across Suffolk there is the Our Place initiative, which is involving district and county councils in looking at how they can develop local budgets. I would like to say that what we find is that particularly troubled families tend to live in troubled communities, and those communities tend to have very little resilience; so actually we need to put in a lot of effort so we have got community development officers who are working in all those communities; but we find in the more rural and better-off parts of Suffolk it is relatively easy to get the community to do stuff for themselves, and in the more troubled parts and the more challenged parts it is much more difficult to do that. We need to put a lot more effort into that.

Chair: Thank you very much indeed, all of you, for coming and giving evidence this afternoon. I appreciate it.

Examination of Witnesses

Witnesses: Sir Merrick Cockell, Chairman, Local Government Association, and Nick Sharman, Director, A4e Ltd, gave evidence.

Chair: Welcome to you both. Thank you very much for coming to give evidence. This is a one-off session on community budgets. Thank you for your written evidence so far. Just for the sake of our records, could you say who you are, and the organisation you represent?

Sir Merrick Cockell: I am Merrick Cockell. I am chairman of the Local Government Association.

Nick Sharman: I am Nick Sharman, director of local government at A4e.

Q28 Chair: I should know that about both of you, given that you were both speaking at a conference this morning, which I was chairing; it is a bit like a repeat session, although on a slightly different subject. I am sorry to keep you a little later than the advertised time.

Just to begin, you both highlighted in your evidence the significant differences in the responses of different Government Departments to the issue of community budgets, and the support they are prepared to give to the way that they work. Could you tell us a little bit about that, and how you think it might be improved for future phases?

Sir Merrick Cockell: I think it was clear from earlier questioning that the term community budgets has become attached to various things, and I suppose is the son or daughter of Total Place and now Whole Place and the community budgets attached to the troubled families unit. Being clear exactly what one is talking about is part of the thing that we have got to get right from the very beginning.

Nick Sharman: We have I suppose approached this as a provider of front-line services. We both get the experience of our users directly on a day-to-day basis and also we hear it when we work, often, very closely with groups. There is something that has become evident, whether the issue is unemployment, and the unemployed coming into our centres as part of a Work programme; our work with families with complex needs; or our training centres for young people who have been excluded from school or people who have got substance misuse problems and have then gone on to offend. All those sorts of users come to us with very much the same sort of problem, which is that they face a fragmented service. We heard earlier that up to 30 different agencies might deal with different parts of their lives. They are passed from pillar to post and, fundamentally, are not listened to; they are done to and not supported. I suppose that we come at the budget issue by saying, "Actually, we ought to be constructing budgets around people’s needs and then helping them to release the budgets."

In answer to your question, Chairman, yes, there are very different perceptions from different Departments about their role in that joined-up or "total person" approach, as we call it. Those who have a direct representation at local level, including DCLG, have been easier to persuade of the need for a redesigned service that joins up. As earlier evidence showed, the police and health authorities tend to operate at a more local level. Where there are good people, we have seen some excellent joined-up initiatives.

However, I have to say that if you look back at the previous year, not one pound from other Departments was committed to the budgets, so commitment on a systemic basis is just not there. I guess that that is what we really want to see, accepting the point that was made earlier that budgets are not the whole answer-absolutely not, but they are a sine qua non, in our view, of getting a formal commitment to the need to join up services.

Sir Merrick Cockell: May I respond to the final part of the question? Clearly, different Government Departments have been committing in different ways or are not that committed. I guess that CLG is at the forefront. Nick said that not one penny has come into real pooling of budgets. I think there is a realisation that it is absolutely essential for the money to be on the table for anything to happen.

You will hear from Louise Casey later, and the troubled families unit shows that Government have realised that the idea that different Departments will naturally agree and will put the money on the table has not worked. It is more than symbolism. The reality will be the CLG Secretary of State sharing across Government with other Secretaries of State, and that being mirrored right the way down to the local level, to the post that we will be funded from through the troubled families unit. That will bring together the local equivalents across government. That is the model-it is a lot better.

The final thing I would say on that is, at least it is not another pilot. There may be 120,000, and we can talk about that and whether we believe it is achievable in the time we have been given, but at least it will happen throughout the country. We have our numbers. We may quibble about the right number of troubled families in our areas, but we all have those numbers now. We are beginning to deal with that and are working closely with Louise Casey, so that is a step forward.

Nick Sharman: Can I add one further point on the budget? I absolutely agree with Merrick that the troubled families unit shows that budgets can be pooled around outcomes. The problem is that that might just be an event-a one off. This has got to be turned into a process by which Whitehall budgets systemically come together. I should have thought that-particularly where there are pressures on those budgets-it is very difficult for Departments to pool. I understand that pressure, but unless we can front the next CSR with a different form of pool budgeting, we will be right back with one-off initiatives. We are desperately anxious not to see the troubled families unit as a one off.

Q29 Simon Danczuk: In some of the evidence that your organisation submitted, you talk about the Department for Education allowing local authorities to draw down budgets much earlier, compared with the Department of Health and the Ministry of Justice. Practically, what needs to improve? How can improvements be made in terms of Government Departments?

Nick Sharman: It is a realisation that if you are going to find a set of public services to support the people who face these very fragmented services at the moment, you need to agree what outcomes we can achieve by intervention. That is no easy matter. The Department of Health will want to see well people who are not on drugs. The DWP will want to see people off welfare. You need to have a model, and an agreed model, by which all these Department can see that, by working together, we can actually get all the outcomes for which those Departments are accountable. It is really about sitting down, agreeing the overall model and then, as you heard earlier, realising that each area will have its own way of doing things. We need to have a theory, or a working model, for each locality, to see how we put things into practice. So this is about joining up at national level around general outcomes and joining up locally in commissioning the sort of outcomes that are relevant to an area.

Q30 Simon Danczuk: Following on from that theme, Sir Merrick, how can the Government allow budgets to be best deployed at local level, in your view and the LGA’s view? What needs to change?

Sir Merrick Cockell: Maybe in community budgets, however you define them, there is a 21st-century solution. I would not say doing things together locally and moving from reactive to preventive is the only game, but it must be the way to help us through the very difficult time we are having in local public services. If that is a 21st-century solution, we are trying to respond in a 19th-century governance way. If I can stick with the troubled families unit, an agreement has been reached that Sir Bob Kerslake will be the accounting officer covering the Treasury and CLG for that piece of work. It sounds a sensible way through an historic set of relationships, but the fact that all these budgets are in different Departments, and that they have to be accountable, is an historic solution we have to move away from.

I wonder-this is not a carefully worked-through solution-whether we could have something more like the devolved parts of the nation, where we could have direct budgets that we are accountable to you in Parliament for, and where we would not have to go through these artificial departmental annual budgets. That would be a way of not only getting out of these proverbial silos, but having a new relationship with Government.

I did ask the obvious question about how many of these bodies we could have. You could have one for each council, or whatever tier, but if you look at the number of LEPs, which might not be the perfect model, I guess you would have around 50 accountable bodies that would have a direct relationship of accountability with Parliament. Of course, some would be smaller than Scotland, but some-certainly Birmingham-would be bigger than Wales. That is a solution, which would change not only the handling of finance, but absolutely everybody’s mindset on where the relationships and partnerships have to be at a real level.

Q31 Simon Danczuk: Are you talking about the total budget, or is this just for certain themes?

Sir Merrick Cockell: It’s going back a bit to the beginning and problem families. Let’s face it, this would not apply to some of our environmental responsibilities. One of the things that keeps us awake is adult care. There is no easy solution to adult care, but a way of getting to the right place on adult care is pooled budgets. The model applies not to all parts of local public services, but to the ones that are troubled and difficult-the things that keep us awake at night.

Q32 Mark Pawsey: Both of you have spoken about the need to pool budgets. Sir Merrick, you have just referred to 19th-century governance and silos. If we are really going to attack this, is it naive to think that we can do it with the existing structures? If we are really going to make some progress in this field, we have to be very radical in our structures of government. We have issues of democratic accountability and issues of accountability of officers, so how can we possibly move things forward?

Nick Sharman: You make a very good case. We are confronting the need for a radically new and more joined-up approach at Government level, which obviously demands a different structure. I think you need not to found it on some sort of theoretical model at a national level but to think about, one, the issues and problems that people face, and two, about allowing those people to express their needs and about being able to pick those up in the system. In other words, you have a pyramid and, instead of it being with the apex at the top and things distributed, you work much more with an inverted pyramid, where you hear those demands and allow the system to channel support into it. That demands, I think, a very different approach to running it but, can you do better than we are with the existing system? Yes, I think we can.

Q33 Mark Pawsey: Following on from that, is the present system bound to fail?

Nick Sharman: I think it will always be what the economists call sub-optimal. In other words, you will never produce the outcomes that we really want to see, but I don’t think that should be an excuse not to make some much better ways of joining up what we do at the moment.

Sir Merrick Cockell: There was questioning earlier about accountable officers, about how many you might need. Eventually it did get to the democratic accountability bit, and I was pleased we got there. Clearly, in managerial, money management accountability terms you no doubt need a chief officer who signs things off, but that is not difficult to do; it is what we do in all parts of Government anyhow. So, I think that could be handled. Whether that is a local government officer or someone in the health bit of local public services doesn’t really worry me, but it must be at that community-local public service-level. As far as the control-who is deciding-is concerned, we have models of public services boards, which are the natural successors to, under the previous Government, the partnerships, and it thankfully moved from it being determined how they should be to involving differently in different places. That is a perfectly fine model: you have the right people around the table, providing those local public services.

The major difference would be that currently only some of them are putting some money on the table. They are the obvious ones-a bit of health, a bit of police, local authority-and others are saying, "No, no, no. We’ll lend you it." We heard a bit earlier about lending a policeman. That is in kind. We want everyone around that table to have their budgets, to be given freedom from the centre to be able to deploy those budgets, and to be held accountable for them.

Q34 Mark Pawsey: And is a contribution in kind effective pooling, as far as you’re concerned, or is it just making an effort?

Sir Merrick Cockell: It’s a nod in the direction. Those other public service bodies would like to be able to put money on the table and to use their budgets locally and have some control over them, but they can’t, so they say, "We can’t give you any money, so we’ll give you a bit of backing, a bit of clerking, a bit of in kind." That is no way to run anything, so we have to move away from it and to real partners in real communities, with the players being able to lead their communities and, as I keep saying, being held accountable by those communities and by Parliament for the spending of public money.

Q35 Bob Blackman: Sir Merrick, looking at governance issues, which you have already expanded on a bit in your evidence, clearly there is this issue of transparency over how the money is spent and whether things are good value for money, and there is also the democratic oversight to make sure that the right priorities are being given. But at the same time, there is the need to make sure that it is being done properly and in the right sort of way, professionally, and all those decisions are made. In your model, do you envisage this decision being taken by elected officials, or unelected officials with the elected ones having oversight of what they do? How do you see it working?

Sir Merrick Cockell: The term elected officials is-

Q36 Bob Blackman: We are already getting to the point of elected mayors. An elected mayor does not make every single decision. He or she has a whole series of people who make those spending decisions, and then they go forward to the mayor for sign-off or whatever. What I am looking at is: how do you envisage it working? You have already said that potentially 50-odd bodies across the country will come together to administer this.

Sir Merrick Cockell: No, I am talking about a total of about 50 bodies being accountable to Parliament for the local spending, but in their areas they are, of course, covering a multitude of services, from Jobcentres Plus at a local level right the way through. I am, as I know you are, a believer in local democracy, and in a greater strengthening of local democracy, whether the model is a city mayor-we could no doubt talk about the pluses and minuses of that, with direct experience-or a more conventional council, and how it works between the different tiers.

I believe those things can be sorted out, but real accountability and officials taking a clear, public political lead is essential. Frankly, another group of bureaucrats sorting out these things is part of, I would say, the problems, and part of the reason why democracy is weak at a local level.

Q37 Bob Blackman: One of the clear concerns will also be that we will have elected police commissioners, clinical commissioning groups and probably other sorts of structures as well. Members of the public out there will be interested in, "How do I get a decision to get a service influenced?" How do you see that working, and the glue coming together to make it work?

Sir Merrick Cockell: In an area, I would expect the police commissioner, of course, to be a senior member of that board. If there were a mayor-if it were Birmingham, clearly, the Birmingham mayor would chair that public services board, but the police commissioner would be there and the equivalent in the other public services. You will recall what we tried to create in London voluntarily, which modelled that; and certainly at an official level, that happened to some extent. That is a perfectly reasonable, business-like way of running local public services, but with that democratic accountability and the ability for local people to boot out those people if they fail.

Q38Bob Blackman: Finally, in certain areas where you have your unitary authority, it is quite clear. The levels of accountability are straightforward, but we also have three-tier authorities-counties, districts and parishes. How do you see it working in that particular environment?

Sir Merrick Cockell: I think it has actually moved on. We heard from Essex a bit earlier, and their whole place bid was successful-one of the four. My own authority is, with the tri-boroughs, another of those. They are working out mechanisms of accountability that work, and they haven’t defined it finally. We are going to have to work that out at a three-London-borough level-how do you make that happen, in terms of political accountability? You cannot ask three people the whole time.

I believe that in local government there is a realisation-not everywhere, not uniformly, and not all at the same speed-that everybody simply defining themselves as what level they are in a tier, and holding on and believing that nothing can change, doesn’t make any sense. I quote London again: the boroughs-in the end, it may have taken a bit of a time-were willing to accept that the Mayor of London, whoever was elected, has the right to speak for London. They do not have the right to control everything and the services that are at a borough level. I think that is a reasonable model, and I believe a will is there, because the current system, in many respects, does not work, or certainly does not work for the group of people we have been talking about this afternoon.

Nick Sharman: The users, if you like, need to be brought into this. By the users, I obviously mean those who are directly experiencing these sort of services on the one hand, but also local communities, who have a strong interest in getting all this right. It is they who, if there are drug users on the estate, will suffer. If there is significant unemployment in the area, the whole place will run down. They have a real and direct interest, it seems to me, in us getting this right. Although the democratic accountability must be, as Merrick describes-and the ultimate accountability-in the end back to you, none the less, the users and communities affected should find a voice within that accountability mechanism.

Q39 Heidi Alexander: When the Prime Minister announced the work on troubled families prior to Christmas, he also announced £448 million of funding that would be paid out on a payment-by-results basis. I wonder, in both of your experiences, how workable that payment mechanism is, and whether you see any difficulty in defining what constitutes a satisfactory result.

Nick Sharman: A4e is working with the Cabinet Office on this. Indeed, it has uncovered some really difficult problems-not insurmountable, but difficult. You heard about some of those from Stephen Hughes earlier. First of all, you must agree what your overall outcomes are. In one sense, it is easy to say that we don’t want families to be troubled any more, but what does that actually mean? Does it mean that they don’t have drugs and that they get their kids to school, or does it mean, as we believe, that they are reintegrated into the community in some way? In other words, they are probably either at work or doing some form of social commitment. So there is an issue about the outcome you are looking for.

Then there is the issue about what the things are that you need to do to get a troubled family on the route to that, that you might measure and then be paid against. That demands two things: one is that you know the costs of interventions, which is very difficult in fragmented administrative structures; and the second is that you must know the benefits and be able to measure them in a very clear way, whatever the outcomes you are looking for. Some are fairly straightforward, such as whether kids go into care or not-that is easy to understand. It is much harder to understand whether children are performing at school, because there is a spread of things.

You need to define ends, you need to agree the means by which it is going to be achieved, and you then need, as I think Stephen Hughes has underlined, a contractual relationship, so that you are absolutely clear about what gets paid. You also need to be clear that there is a budget saving at the end of it and that that is cashable, so that we can pay back the people whom we borrowed from. You can see that there is a whole legion of issues that have to be dealt with.

The interesting thing is that the Work programme is such a programme. In other words, we have begun to set something in place. It is relatively easy-that is, the cashable savings are the benefits not paid and you know when someone is in work or not. It is easier, but the difficulty of waiting for two years to be paid fully is a real problem for many of the smaller supply organisations that must be involved at community level. I could go on, but you can see that this is a really interesting and important way, for all the reasons we have talked about, to get real finance into this. But there is still a long way to go to fashion a workable programme.

Sir Merrick Cockell: Nick has given a definitive answer from A4e’s real experience. What you outlined was £400 million, a 40-60 split between local public services and the national Government’s contribution. Of course, I hardly need tell you the level of savings that local government has made-it is 28% over four years. In truth, we have not got money to put on the table to get payback in many years’ time. You will know how difficult it is just to keep many services going. It is essential-we have been talking to Government closely at the LGA about this recently-that that £400 million can’t be payment by results. A good chunk of that has to be up front. Frankly, we should be able to meet our 60% commitment, but that should be on results. Unless there is some money on the table to help make this happen and for us to invest at a local level early on in doing things differently, we are never going to get to that 60%. That is absolutely the key.

Q40 Heidi Alexander: What sort of response are you getting from the Department?

Sir Merrick Cockell: You may well ask Louise Casey, but the responses we have had are a realisation of that. Clearly, the whole £400 million, or whatever it was, is not at this stage on the table, but there is a realisation that some money will have to come early on at a local level. Those discussions are still going on, but they are essential, because I hardly need to repeat that looking for local government to put 60% up front and the £400 million to come several years down the road is doomed to failure.

Q41 Heidi Alexander: This is my last question. Even though the money is not on the table at the moment-you might get some progress on that-I think that you started off, Sir Merrick, by talking about the numbers of people who are deemed to be troubled families. Of course, it is not a static situation. Many would argue that with the Government’s wider agenda, in terms of welfare reform and the state of the economy at the moment, you could actually see more people falling into the category of a troubled family, if they are out of work or find themselves in high levels of debt. If more people find themselves being troubled, how do you use the resources available to best effect? What would you say, in your experience, should happen there?

Nick Sharman: It is a very interesting challenge here. It comes back to the model by which we are seeking to intervene in troubled families. There are 46,000 families with not only a lot of what we would call symptoms of family problem, but in which children are threatened. There are about 117,000 with some of those features. Then there are a whole range of others who are classified as less needy, but who clearly are in exactly the position you describe-in danger of falling into that. Does the model put a lot of money into the very troubled families? Does it seek to have a broader range of interventions that prevent, and which are probably cheaper in addressing those people who might fall into that? The positive message you get from the family intervention programme generally and, indeed, from our Work programme experience, is that a relatively modest investment of support, helping people through that journey, being alongside them enabling them to cope, can make a tremendous difference to their lives. We can get some really good outcomes if we can get this right. But where we put those resources, the model that we choose, is a very important first step and we have to make that decision. So there are some real choices here about how we intervene.

Sir Merrick Cockell: You have hit on a real difficulty. Part of the model of this is that as you deal with those 120,000, you start decommissioning some of those services because you have done the preventive rather than the reactive. If it is just being filled by more people joining that 120,000, then you can see the difficulties. We are going to have to watch that really carefully to make sure that we are not filling a vacuum with an endless supply of families deemed to be troubled.

Chair: Thank you both very much indeed for coming to give evidence.

Examination of Witnesses

Witnesses: Louise Casey CB, Director-General, Troubled Families Team, DCLG, and Baroness Hanham CBE, Parliamentary Under-Secretary of State, DCLG, gave evidence.

Q42 Chair: Thank you both very much indeed for coming to us this afternoon in our one-off evidence session into community budgets. Sorry for the slight delay. Just for the sake of our record, could you give us your name and position?

Baroness Hanham: I am Baroness Hanham and I am the Parliamentary Under-Secretary at the Department for Communities and Local Government.

Louise Casey: I am Louise Casey and I am the civil servant heading up the Government’s strategy to tackle the problem of troubled families.

Q43 Chair: The community budgets were seen as part of the localist agenda, trying to take decisions on a Government-wide basis down at local level with local authorities very much at their heart. To what extent, however, with the troubled families initiative, are they now seen as simply another centrally driven, central Government programme which locally you have to respond to in a certain way?

Baroness Hanham: I am sure that the answer to that is no. I think the whole thing about community budgets is that they have been a dream of most local authorities for a long time. Certainly, when I was leader of a council the opportunity to bring together a whole lot of different bodies, pool budgets and provide that sort of work was something I would have been truly grateful for. The fact that that is now the hope and expectation for community budgets is a very good thing. The fact that troubled families have now become one of the driving forces in community budgets does not mean that we need to stand aside and say, "That’s it. All done now." We are still looking, with the whole place and the neighbourhood budgets as well, at how you manage some of the more difficult elements, which Sir Merrick was talking about, all the time. So I don’t think there’s any question that this is just something that’s going to get left. I think this will develop.

Q44 Chair: Given somebody found £448 million, where has the money been found from? What doesn’t get done because the money has been found?

Baroness Hanham: On community budgets?

Chair: For the troubled families.

Baroness Hanham: Can we do a split here? Louise is definitely troubled families.

Louise Casey: I cause the trouble.

Chair: Where does the money come from and what doesn’t get done instead? Perhaps you could pass the second buck back again.

Louise Casey: Exactly. That may happen. Essentially, I would say that Departments across Whitehall and Ministers recognise the value of spending money now on troubled families over the next few years and what benefit that would have in the longer term. They looked hard at-I think I’ve already said this publicly-money down the back of the settee. Earlier, I said that they turned the tea caddy over and raided it. My sense is that they pulled out all the stops to try to pull together the money that you are talking about.

I don’t personally know where those savings have been made in terms of other programmes. I do know that if you look at the type of savings that can be made if this programme is got right-that will involve local authorities, in particular, working in really close partnership with us-then the figures and the maths speak for themselves. Just basic things like looking at a family intervention project, the average per family is £14,000 to £19,000 a year. That’s research from the early family intervention project set up in 2005-06. If you compare that with putting just one child into care, at an average of £36,000 a year, the figures start to speak for themselves.

In terms of people needing persuasion as to why to do this-they needed it because it is a difficult time to find money-the case was made very coherently to them that, if they put money into this now, we will save money further down the line. Enough is enough. We are spending a huge amount of money on these families nationally, and everyone agrees with that. The issue is how we can spend it differently now, so that we save the untold misery that these families both live in and cause the rest of the community, and we save ourselves-all of us-money that could be ploughed into other public services later on down the line.

Chair: Sir Merrick was indicating to us-you’ve probably just heard-that that’s fine for central Government: you have the ability and flexibility to anticipate future savings in budgets. But local authorities are in such a difficult place at present, with the level of cuts they are making, that it probably isn’t possible for them to do the same for the contributions that they are being expected to make for this programme. Do you have a response to that?

Baroness Hanham: I think that is something that we probably still need to keep looking at to see where they are going to make savings and what the funding arrangements are going to be. It doesn’t seem unreasonable to say that if you do this properly and probably in a shortish term, you should be releasing money by not having so many interventions and so many Departments and public bodies involved in the care of one family. Some families are getting eight people crossing their threshold to try to keep them from being troubled families. If you can get that number down into one or two, by definition and across the piece, you are saving money.

Q45 Chair: I think the difference is that if central Government do not achieve that objective, the deficit goes up a little bit, but if local government doesn’t, its budget doesn’t balance and it has to make some cuts elsewhere.

Baroness Hanham: I think that this will be carefully monitored to see what the outcome is. I think that some local authorities will manage this better than others. That’s something that we need to keep an eye on from the Department. But the expectation at the moment is that 60% will come from local authorities.

Q46 Simon Danczuk: Louise, I have been following your career with interest. You have been dealing over the years with rough sleepers, homeless people, antisocial behaviour, neighbour nuisance and problem families; you have been dealing with some of the most difficult, challenging and, some would say, unsavoury people in British society. To top your career now, you have to deal directly with David Cameron, the Prime Minister. On that, could you tell me how many times has the Prime Minister met you since you took up this position? How many times has the Prime Minister met you to discuss this directly?

Louise Casey: I have met the Prime Minister on several occasions since I have done this job. I only started on 7 November. He met me as part of a social policy review meeting in the first instance, then a meeting to talk about the strategy overall and then we did the launch in December. The really important thing for me, leading on this, is that Eric Pickles, the Secretary of State for Communities and Local Government, is the lead Cabinet member on this. He is fully committed to it, and with him are quite a number of Government Departments, all of whom believe in the value of this project.

Just flipping back to Mr Bett’s question, if I may Mr Danczuk, we are essentially looking for local authorities to lead this, but a very clear message will go out from the DWP-from Iain Duncan Smith and Chris Grayling-that we expect jobcentres to be part of this and that if they have funding locally they will put it into this project. We are not just leaving local authorities to raise the 60% on their own. We will be ensuring that other bits of Whitehall communicate to Health, to DWP, to Jobcentre Plus and others. We are not suggesting that it is easy, and what Baroness Hanham has said is absolutely right: we need to manage and look at it carefully. This is a partnership deal that is reflected locally and, actually, Mr Danczuk, it is also reflected in the governance arrangements for the troubled families programme.

Q47 Simon Danczuk: Just to be clear, how many times have you sat down with the Prime Minister and had a conversation about this, since you have been in post?

Louise Casey: I think it is three.

Q48 Simon Danczuk: Is the troubled families work now separate from community budgets, or is it part of the same wider objective?

Louise Casey: The troubled families work builds on it. It is a fantastic beginning that the community budgets process is there and the local authorities and partners were round the table. The work done by Baroness Hanham and others is a fantastic starting point. The troubled families programme will reach across every local authority in the country. We want to reach people. No matter whether they are living in rural Lincolnshire, where there are a smaller number of families, or whether they are in Lewisham, where there are potentially a higher number of families, we want to ensure that we reach those families and turn them around. It is a national programme, building on the structures that have been created through community budgets.

Baroness Hanham: Can I just go on from that? We need to understand that the work is going on. This is not the end of it. In my opening remarks, I said that there is still Whole Place. We have four projects going on through local authorities to look across the piece at how budgets can be involved and how they can be brought together and what is required. These pilots or projects, together with the neighbourhood projects as well, will feed into what Louise is doing, if it finds that something is really useful. We have to recognise that community budgets are here to stay. We need to work out and identify what the difficulties are, if there are any, with community budgets. I did a work with the political leaders on identifying at least some of those, how we overcome that and how you get the co-operation. It is not an end here. Troubled families will carry on under Louise, and we will carry on identifying and dealing with community budgets.

Q49 Simon Danczuk: On that, is the inter-ministerial group that you have been leading on covering the whole of community budgets-I am just asking for clarity in terms-or is it just leading on troubled families?

Baroness Hanham: The inter-ministerial group is dealing with troubled families at present. That is our focus, but within the Department we are continuing with Whole Place and the neighbourhood budgets and looking at that. The inter-ministerial group will have to be involved, or we end up with a problem backing up saying that this will not work. That is because community budgets, by definition, are across the piece-the whole of Government-and the whole of Government have got to make them work.

Q50 Simon Danczuk: Louise, in terms of the troubled families team, is it there to support local authorities, or is it there to tell them what to do?

Louise Casey: If I am honest, it is a bit of both. Obviously, the sort of way I would like to approach this-and so far we have had a tremendous response from local authorities-is by working in partnership. This is a really, really difficult job. Out of the list that you described, this is probably the toughest one. The solutions do not necessarily lie in my head or, indeed, in that of my team, so, of course, we have to work with local authorities. They understand who these families are; they know who the families are. You do not have to go very far down the tiers because these families make it up the radar, right through to leaders, councillors and all the rest of it.

It is really important that we get the relationship with local authorities right, and it is very important that they see us as a way of getting support where they feel they need it. If they are experiencing problems in terms of delivery that are either to do with the Department for Communities and Local Government or the rest of Whitehall, they should feel that they are able to talk to us about it. We are just starting out in terms of trying to construct those sorts of relationships in as positive a way as possible. Obviously, if people are really struggling and they do not know what the solution is to something, I would see it as part of our job to make sure that we knew what to do to help them.

Q51 Simon Danczuk: Finally, in terms of the troubleshooters that are being proposed, are they accountable to the Department or to the local authorities?

Louise Casey: The troubleshooters are local authority. Essentially, every local authority has a portion of the 120,000 troubled families. The troubleshooter-the co-ordinator or whatever local authorities chose to call them-are essentially within the local authority and are employed by it. Will I want to have a close working relationship with them? Yes, of course I will, because they will be how we work out what is happening with the families, whether we are making the right choices, whether the money is going in the right place and what type of schemes are more successful than others.

On the Work programme territory, you had A4e giving evidence earlier. Let us take Rochdale, where there are 600 to 700 such families. If your local authority wants to know that, through the European social fund Work programme, a portion of its families is getting through that programme and the troubleshooter works out that that is not working, they have to be able to come to my team and say, "Hey Louise, the DWP delivery chain"-or whatever they call it in the jargon-"isn’t working." I want a close relationship with them but, again, it is a partnership; it is not a doing-to. Local authorities have to make up their mind that they want to do this and they have to believe in it, because this is not easy. They have to find some money for it, and we have to go forward together. I see it as quite a positive relationship with the troubleshooters.

Q52 David Heyes: Let me tease a bit more out of that and ask: how will you actually track progress with local authorities in tackling the issues surrounding troubled families?

Louise Casey: We are at really early days on that. The honest answer to that question is that we are talking-I think Sir Merrick mentioned this earlier-to local authorities, to the LGA, to London Councils and to others about how to construct that relationship and what monitoring looks like. One does not want to introduce some incredibly bureaucratic, top-down mechanism that measures every single thing that is happening in every household. I might occasionally want to do that because I am obsessed with these families, nevertheless, it would be wrong and it will not create a positive relationship with local authorities. They have to work that out for themselves. I am happy to come back at a later date and tell you what is being worked through, but we are working all of that through at the moment-getting the balance between tracking numbers, what outcomes look like and how we can best construct that relationship.

Q53 David Heyes: Can you give us a flavour of your thinking on this issue and clearly try to work it through? Can you give us an indication of the kind of criteria-the factors-that would be taken into this? It is incredibly difficult to measure success. How do you do it?

Louise Casey: It is. That is why us making sure that we get this right and that we get the relationship with local authorities right is incredibly important. I listened to what some of your earlier people were saying about their view of what criteria look like. My own view-Ministers are supportive of this-is that we need to keep things quite straightforward. I can go through the sort of criteria that put you into a troubled family bracket, but essentially what we are looking for is that a family gets their kids to school every day-not once every couple of weeks by taxi to a pupil referral unit-that they are in or much closer to work than they currently are, because we are talking about inter-generational unemployed families, and that the police are not called every night, every week or every three weeks in terms of the impact on society of those families. That is the aspiration, and now what we have to do is to work out how that can be measured within local authorities and how we can make sure we get that right in Government as well.

Baroness Hanham: There is an additional aspect to this. Sir Merrick was discussing the accountability issues, and part of the monitoring of the system is going to have to feed in to whatever accountability measures are set up or where the responsibility for money lies. There is a juxtaposition here between the two, which I suppose is going to have to be resolved.

Q54 David Heyes: You said that, in anticipation of possible failure, you would challenge areas that do not show the necessary leadership and progress. What form will that take?

Louise Casey: It is incredibly early days, because we are not talking failure yet. We are way off. At the moment-

Q55 David Heyes: I am sorry, that was a quote from the Department. The Department is clearly anticipating failure, because it has told us what will happen when it comes along.

Baroness Hanham: I do not think that the Department is anticipating failure, and you would not expect it to say anything else, would you? We are anticipating that this will be a great success but, as Louise has said, we are very aware that this is a very difficult area. There are some very sensitive families and some pretty intractable problems, so we are not-

Q56 David Heyes: There is a hint of a stick there. If we are thinking in terms of carrots and sticks, there is a hint of a stick in that statement.

Baroness Hanham: I think there is. There are a lot of carrots but with these families-Louise probably knows more about this than I do-for many the stick is going to be important.

Q57 George Hollingbery: Ms Casey, you were adamant there that this is "touchy feely" measurement to some extent, and you will excuse me for using that language-getting someone to school five days out of 10, rather than two-but Mr Sharman behind you must be blanching, because he needs a metric that pays him, and it seems to me that you have got to measure this a lot more precisely than you are implying is necessary, otherwise payment by results just cannot work.

Louise Casey: Let us be up front about this. We are currently working all of that through, and I am not in a position to say to the Committee exactly how we intend to do the payment by results and on what metrics. My answer to the question was more about how one wants to work with local authorities, what type of relationship you want to have and, at this stage, a very clear, common sense of values around what that looks like. I would actually argue, despite A4e behind me, that we are not beyond the wit of working out metrics that mean we can do an incentivisation, payment-by-results mechanism, and colleagues in DWP and the Cabinet Office and others are helping us to do that, and will be doing it in partnership with local government.

The important thing at this stage is that that needs to be worked through incredibly carefully so that everyone knows what the score is and so that, if people do not deliver, they know why money is or is not released. So there is a hard edge to this: if people do not deliver, that means money. That is what payment by results means: if you do not deliver results, you do not get payments. That is why we want to work through in some detail what that would actually look like. I am simply not in a position at the moment to give this Committee more information than I have been able to work through within Whitehall. I think it is right that we get that right, so that A4e behind me does not blanch at a Committee like this but understands what we are trying to do.

I am not evading the question. I am really happy to be accountable and to come back to you on any of this stuff at any other stage, but it would be wrong of me to lead you up the garden path at the moment, or to say that everything is perfect, when these things are proper and need sorting out properly.

Q58 Heidi Alexander: I understand everything that you have said, and that you want to find an appropriate way of measuring success and results. What consideration are you giving to time frames for that measurement? Is it after a year, 24 months or what? What thought have you given to that point at this stage.

Louise Casey: Again, we are working some of that through. One of things that I have done and am continuing to do is to meet families, as well as the voluntary sector-the people who work with those families-and local authorities. Those are the sorts of things we want to look at, the evaluation. I started work on 7 November. This is a good process to make sure we work it through in some detail, so we will definitely look at those sorts of things, but I am not in a position to go further than that now.

Q59 Chair: When you develop these hard measures, local authorities will have to collect the information provided to you about whether the measures are being achieved, and then targets will presumably be set for them, against which the carrot or stick will be used according to whether they have hit them.

Louise Casey: All that is what we are working through with officials and colleagues in local government at the moment. This is a huge amount of Government money, and we will need to make sure that we are clear why we are giving it to local authorities, and what our expectations of their performance is in relation to that money.

Q60 Chair: It does not sound the most localised approach I have ever heard.

Baroness Hanham: It will be localised because the responsibility for the families by and large-Louise is in a central position-is at the local area. The various public bodies and the voluntary sector at the local area will have to make this programme work. All Louise can do for her purpose is to drive the enthusiasm and to make the concept of the rules of how this will work go and chivvy people into results, and I assure you that she is extremely good at that. It is absolutely and fundamentally the local people who will have to deliver these results.

Q61 Chair: I have heard Ministers say that the problem with setting targets is that the way they are set influences how people behave on the ground to achieve those targets. Is not that one of the criticisms you made of the last Government? I do not want to be too political, but I think I have heard that before.

Baroness Hanham: Louise might tell us, but I do not agree. We have not discussed targets as such. We have expectation of outcomes.

Q62 Bob Blackman: The experience and attitudes of many local authorities and public bodies are very mixed, at best, in terms of the evidence we have received, on pooling of resources and pooling of budgets. One of the concerns is that-we have heard evidence about this today-obviously some public bodies are being asked to put money on the table to make savings in the long run, whereas others are not willing to do so. What will the Government do about changing that attitude to bring everyone together to see the benefits of the approach?

Baroness Hanham: The point about pooling budgets is that actually pooling them has not happened very widely. That may be part of the reluctance, but also part of the culture in various Departments. The pooling is also of resources in terms of staff and people who are involved. We have been looking quite carefully at how to pool or align money to deliver these projects. Most authorities are encouraging about doing this, but they may not be so encouraging about taking their money and doing that with it, but we must work out a bit more fundamentally how you make those budgets pooled, which is something we have not resolved over years. If you can put in the resources, the staff and the back-up, that is at least on the way to pooling.

Q63 Bob Blackman: One of the issues will be how the Government demonstrate that there is true value for money in this approach. There will clearly be money around in these various different areas, so is it being spent in the right way, is it the best value, could it be spent in a different way? How will the Government enable that to be accounted for, and for people to be able to probe and understand whether it is being done in the right way?

Baroness Hanham: It goes back to the localist issue. The fact of the matter is that this will be done at local level, and people will be very aware of what is going on. No one is hiding that under a leaf. The expectation is that what is being done, and how it is being done will be widely known about.

In terms of accountability, I think we are back in the position that there will probably be a statutory officer who is responsible and accountable for the money. At the moment, under legislation, there is the local authority finance officer, and I think the health service also has one. Many local authorities have been working on a lot of pilots, and working with the health service model. There must be ways of ensuring accountability, but I think the openness is going to be important.

Q64 Bob Blackman: Finally, we have various different structures. We have clinical commissioning groups. We have elected police commissioners. We have directly elected mayors and local authorities. There is a vast range of different bodies that are accountable to the public. How is a member of the public going to be able to see whether the money is being spent properly? Do you have an answer for that here?

Baroness Hanham: I think the answer must be that however they come together-a board, a partnership or whatever-the people who are going to be appointed to it will be at a senior level. They are not going to be junior members. The accountability will come to some extent from the seniority of those who are members, and I think the openness will come with how they deal with what they are being asked to do. There is already freedom of information from all sorts of views. There is already an ability for the people living in the local area to find information. We have a great programme of transparency of information that is being pushed forward by the Department. So I think there will be ways, but if at any stage we are thinking that this is not being done openly, we will have to make sure that it is.

Q65 James Morris: You made a distinction between pooling and alignment of funding. What do you understand by the difference between those two?

Baroness Hanham: A pot of money. One authority says that they are prepared to give this, and others might give that. You then have one budgeted pot. This is the difficult one because it has not been cracked very well.

Q66 James Morris: That is what I was going to say. Is it actually true that one could not point to an example where pooling has actually happened? What we have to some degree, if anything, within these community budget pilots is a slight alignment of funding, but we do not actually have anything that is really called pooled funding at all.

Baroness Hanham: One of the aspects of Whole Place in particular is to identify the pooling and how you would do that, but you are absolutely right about the word "alignment". It is has been around all along with community budgets, and people say, "That is the amount of resources that is available," but they do not actually put it into a direct pot, because you then need to be able to have mechanisms to ensure that they cough up their share of it.

Q67 Mark Pawsey: We have heard a lot of evidence today about the difficulties of this project and the difficulties of pooling budgets and all those kinds of things, but my constituents would be horrified to read the stats about £9 billion a year dealing with troubled families and £75,000 per family. Can you just give us a little flavour of what the cost is of not taking action along these lines?

Louise Casey: Yes, I can. Basically, again, to be honest, the figures speak for themselves. I walk around with a particular thing that has the average cost of vehicle theft at £4,800. A hoax fire call to the local authority is £500. What else do I have? I have children in foster care at £36,000 a year. If you put them in residential care, that is £15,000 a month, which is £180,000 a year. I found it so convincing, because obviously I have always wanted to help these families and believed in it for all those-I think one of you said to me-soft reasons. The hard evidence behind why this is the right thing to do in totality is there for the taking. Out of that £9 billion, the evidence shows that a huge proportion-about £8 billion-of it is reactive spend. So instead of the families being registered with a GP and using the GP in the way that perhaps I do, they are turning up at an A and E department for several hours and absorbing resources there. There may be emergency homelessness applications and so on and so forth. The amount of reactive spend that we are doing within these families essentially means that the costing is huge. The amount of proactive spend with them is also quite high. It is £1 billion a year.

So I think the opportunity to change the way that we work with those families so that we get a lasting result for them but also reorganise public finances behind them can only be a good thing. What is interesting is that local authorities of all political persuasions are up for this and want to do something about it, and the Government finding additional resources at this stage essentially gives a huge motivation to local authorities and all their partners to come to the table to do something about these families. So there are lots of good reasons for it.

Heather Wheeler: I am used to pooled budgets. The crime and disorder reduction partnership at South Derbyshire district council had money from the police, health, the district council, the county council and a couple of other pots as well, including the fire brigade. That whole budget was run by the crime and disorder reduction partnership and it used the money how it wanted. There was no issue about that. It wasn’t a case of, "That ten grand’s mine, you can’t have it". Once it was in the pot, it was used. So I think that this is absolutely the way forward and perhaps in a year’s time we can come back and see where we have gone with it, Chairman.

Q68 George Hollingbery: I don’t think that you will find anyone around this table who is not enormously enthusiastic about the potential of this; it has to be the right way forward. We have seen it again in our report on regeneration, we have seen it locally-we have seen it at almost every turn in local government. But someone out there has got to be determined to kick the doors down, because there is absolutely no doubt that it is Whitehall that is standing in the way of this, ultimately. Budget fiefdoms, silos-there is a whole centrist mentality that is unbelievably difficult to get through. We have had reassurance, again and again, from Ministers who have come here and told us that, yes, they are going to do something about it. I asked Greg Clark, for example, if he could write a cheque from a different Department, and the response was, "Well, perhaps not".

Do you guys seriously have the wherewithal and the political backing to kick these silos to pieces and really break the doors down, to make people think properly and creatively about how money is spent locally to get the maximum possible effect? Again and again, we hear that Whitehall is the problem.

Baroness Hanham: The fact that there is now a cross-Whitehall ministerial group that is being led by Eric Pickles is hopefully the effective answer to your question, because my political group was looking at the various barriers that are coming up to stop the sharing of this money. You are right that some of it is just that Departments will not agree to funding in a certain way. But if you have a group that is meeting all the time, with Louise putting in her problems and someone having to resolve things, I don’t think that you can duck that. It also comes with the openness; being able to demonstrate that each Department is supportive of this process.

Q69 George Hollingbery: There is "supportive" and there is "making a real difference". Plainly, we are all supportive, but are we really going to demolish that culture? Ms Casey, let me ask you. Are you finding this in your day-to-day job? Are you finding genuine co-operation, which is the thing that will really make a difference, or is it just at the moment doffing the cap?

Louise Casey: It is very early days but we have a pooled budget in Whitehall, so essentially my budget has come from several different Government Departments. So that’s a sign that everyone is pulling together on this one and we have Secretaries of State across Whitehall signed up to delivering this. I think it’s early days, but certainly the signs are very powerful. And part of the point of having a director general with the team reporting at such senior levels is to make sure that we have that relationship right, and if it is the view that there are things blocking us and they are not in the right place, it is part of my job to bring that to Ministers and essentially not to let up until the drawbridge is down.

Having said that, I think that sometimes people use Whitehall and say, "Oh, it’s all too difficult, they’re in silos", but when you scrape below things you think, "Well, actually it doesn’t stop you putting two budgets together". I can’t see the directive that has come down from Whitehall that says, "You"-I don’t know, a head teacher for example-"can’t put your money in with children’s services, which can’t put their money in with community safety".

Of course, people always say that somebody else is the problem and the thing about this programme is that I hope that there is a common endeavour among everybody who realises-a moment ago, somebody else on the Committee put it better than I can-that from regeneration initiative to regeneration initiative, nobody has got into the families that both have problems and cause problems to the degree that we need to do so. That common sense of purpose-whether that is the Prime Minister, Cabinet members or people in local authorities and charities who work with those families-has got to be what we do here. We must stop blaming each other for not helping these families and try to pull together to do something about the problem. That is a very good aim that I have, but behind it is a quite a lot of mettle-certainly at Cabinet level-to unblock problems if they exist.

Q70 George Hollingbery: The nirvana here-the ultimate objective-surely must be wider than troubled families, incredibly important though they are. We can imagine public health budgets existing in a completely different way from how they exist now, even if we can get this agenda brought in across Whitehall. If we bring you back in five years, assuming you are still there, will you be able to report a big bang and say that the way the Government fund these programmes locally, and the way that money is spent locally, is being done in a much more creative, much less siloed way, that takes account of the way that people live in the modern day-rather than some 30 or 40 years ago?

Baroness Hanham: I think, perhaps, it would be cautious of me to be cautious on this. The whole emphasis and pressure is going to be on making sure that all these silos are broken down, that there is a strong imperative to make sure that we get these troubled families dealt with and that we get the money released from not having every agency involved there.

Whitehall is also going to be involved in the Whole Places, which are the seed bed of how these are going to work. If there are going to be problems, those will show up there as well as with youth. But the intention is to make sure-I can say this strongly: we believe and the intention is-that we should be able to get these budgets and support from Departments across the piece.

Q71 Chair: But we would still like to be absolutely clear about whether 60% of the funding is still likely to come from local councils, or can it come from a local level, including other agencies? We would like to be clear about what the requirement is.

Louise Casey: On the troubled families?

Chair: Yes.

Louise Casey: It can come from partners. So it could be DWP, Health-

Q72 Chair: So as well as funding from central Government to private-40%-part of the 60% could come from Departments at local level?

Louise Casey: Indeed.

Q73 Chair: Right. How sure are you that that will happen?

Baroness Hanham: I think we’ve got a pretty good picture, now, of the commitment there is from local authorities on this and, in the wider area, from Government. For them this is exciting. As Louise says, it is a common-sense way of dealing with things. If it does not all come together it won’t work, but we are determined that it will work.

Q74 Heidi Alexander: Have you got any examples of where the police have already agreed to put money into initiatives as part of the troubled families initiative-the police or the Department for Work and Pensions? Are there any particular ones that you are aware of where that commitment has already been made?

Baroness Hanham: No, I think we are too early for that. I think we will be waiting to make sure that that happens, but we are two months into this programme. It’s rather early days for saying that either there will or will not be something forthcoming from there.

Q75 Heidi Alexander: Talking about joined-up government, there is an issue with budgets and particular policy areas, and providing leadership to tackle the basic problems that affect troubled families. For example, if you take a family where the mother or father has been an offender-they come out of prison and find it difficult to get work-given what is happening in prisons or the support provided in the Probation Service, there is almost a situation in which the troubled families team, headed up by Miss Casey, will be dabbling in some of these policy areas. To what extent do you feel that your colleagues in other Departments may be up for some of those difficult conversations?

Louise Casey: That’s the job. That’s my job, which is anything in and around the 120,000 troubled families. The agreement is that we need to look at what affects those families and how to make them less troubled. If that involves looking at Ministry of Justice, Home Office, gangs and guns, DWP-whatever-that is part of the brief, which is to make sure that the strategy is able to go forward.

I’ve got to say that, so far, obviously, colleagues and civil servants have not found releasing their budget the easiest thing to do. Pooling budgets is really hard, even in Whitehall, but they have done it and they understand. I think the really important thing is that they genuinely understand that troubled or problem families-whatever each Department has historically called them-cause real difficulties to communities and to the policies that Departments wanted to implement. They understand that we need to work together to do something for them. I am quite hopeful at the moment. I am obviously very much an optimistic person, but I am quite hopeful that part of my job is to bring that back at official level, and then, if need be, to Eric Pickles and others at ministerial level.

Q76 Heidi Alexander: You talked about reducing the reactive spending that the state has to make as a result of intervention not taking place earlier. Is not one of the really big difficulties the fact that if you are to reduce the reactive spending, it will not happen immediately? You will have to continue spending reactively, while you invest and spend proactively as well. Your expenditure will go in two different directions. Is that not the fundamental problem in convincing Departments to release the budgets that, ideally, you would like to see released?

Louise Casey: I think that some of it is, frankly, already happening and people already understand the need to change how they have gone about this. Some areas already doing family intervention projects-for example, some of the gang work in Lewisham led by the Mayor there-are changing how they spend their money, with a model that I am quite interested in, in terms of how you reduce both spending and problems.

Some of this is already happening out there and we need to capture that, work with it and understand it, and then get other people around the country to get their heads around it. Yes, there is a little dilemma, which is that at the moment in many cases, we are throwing good money after bad. That is essentially what that £9 billion is-it is money badly spent. Changing that to be money better spent is a reason why we needed to ensure that we got a central budget or new additional money, which meant that we could inject it into local authorities and their partners to do some of that difficult balance that you are talking about.

If you look at an area that is spending £600 million a year in total, of which they think £400 million is going on 5% to 10% of the population, and you happen to be a local taxpayer, you might ask yourself why they have got themselves into that situation already and why you-we, the Government or anybody out there-are spending more money. I think that the pressure is on ensuring that any money that is now spent is spent really well, so that we are not throwing more good money after bad. That is the challenge in this programme.

Q77 Heidi Alexander: My final question is not one that I was scheduled to ask. It is about the scalability of the work that you will do. I am very excited about it and I think that it is completely the right way to go. I see it as being quite a long-term, intensive, resource-heavy process. I think that Lewisham has about 900 families that have been identified as troubled families, but actually you might say that there are quite a few more than that, depending on the definition.

I am interested in how, even at this very early stage, you are thinking about what you learn from the work with troubled families to get to a point where you prevent those people from falling into the definition. It is a big problem and it is not just necessarily the 120,000 families that the Prime Minister identified.

Baroness Hanham: I think that part of your responsibility in those cases is to ensure that while they are dealing with those 900, you are not overlooking and completely missing out on people coming up behind. I think that there would be a responsibility to go both ways: to look very carefully at the ones who you are dealing with immediately, but also to recognise exactly what you say.

You would hope to stem this flow, but in reality you will not and there will be others. I think that the first priority Louise has is to ensure that for the ones that have been identified, there is a mechanism for moving this all forward, which then, hopefully, will be something that will be set in stone subsequently.

Louise Casey: In addition to that, I see it as part of our job to collect the information on what is happening that is different. Some people are pioneering new ways of working with these families. One of the things I have found over the years of doing this sort of job is that you do not have to go over with a stick and say, "It is terrible. I am going to inspect you. What are your numbers?" In fact, they are more interested in knowing what authority A is doing, and which voluntary project has done something that is incredibly powerful and clever, and whether they could learn from it.

If we can get that sense going across the country-the gangs work that your constituency is doing, and Westminster’s Family Recovery Project, which is incredibly powerful-there are ways there of cross-fertilising good ideas. That is the very positive side of working with the trouble-shooters, so that we have people we can bring together to say, "Look what is happening on this; look at what is happening on that." So that we can get a sense of what I believe is called good practice nowadays, but basically people knowing what they are doing and doing it well with these very difficult families.

I don’t think that the solution to tackling these families is at all straightforward. They are families, they are multiple, needy and demanding, and they cause many problems within communities. Lots of people just want to back off them and leave them to it in the hope that we all go away. This programme is saying that we are not going to go away.

Chair: On that point, thank you both for coming to give evidence. We do understand that it is a work in progress. I think we will take up your offer of coming to give further evidence in due course. We look forward to seeing you again.

Prepared 19th January 2012