Community Budgets

Written submission from Essex County Council (CBud 01)

Partners in Essex have long supported the development of community budget s as a means of improving local outcomes . Throughout 2010, E ssex C ounty C ouncil (ECC) worked with local partners to develop credible community budget proposals and, at in CSR 2010 the county was selected as a pilot area for community budgets focused on families with multiple problems. Since then, local partners have develop ed their community budgets work through the EssexFamily project and by preparing proposals to pilot a whole place community budget . At the time of submission, the Essex bid has been included on a short-list of possible pilot areas.

Based on our experience to date, and our ongoing work to develop the C ommunity B udget concept, the points we wish to raise with the Committee are as follows:

- Community budget s should be focused on s ystem change : they have the potential to bring about wholesale system change in public services : joining-up and co-ordinating services, rationalising assets, streamlining processes and improving citizens’ experience s . As community budgets develop, it will be important to balance the achievement of short-term outcomes against the need to secure the benefits of long-term systemic change.

- Community budgets should place communities at the heart of public services : by involving communities in the design and development of new service models, the Essex Family project will reduce costs and improve outcomes better than any drive to deliver short-term outcomes for a single cohort of families. It is crucial that a citizen-centric approach to system change is embedded in any whole place community budget pilots.

- Community budgets do not necessarily require a pooled budgets : there are risks associated with the creation of a single funding pot that goes against the grain of Open Public Services. Those leading work on community budgets should focus on public services’ pursuit of shared outcomes and on integrated decision-making rather than on the mechanics of pooled budgets .

- Community budgets are a tool to change culture : The long-term value of community budgeting lies in the potential to change the culture across public services. C ommunity budget s can provide a framework through which public services can pursue an integrated set of outcomes and share in the savings that accrue from both improved efficiency and effective prevention , moving beyond an otherwise siloed approach within professional, departmental and organisational boundaries . But to deliver such a change , whole place community budget pilots must receive adequate resources and the full support of Whitehall departments.

Our experience in Essex

At the time of CSR 2010, CLG announced that sixteen pilot areas, including Essex, would be given direct control over ‘various strands of Whitehall funding in a single "local bank account"’ for tackling social problems around families with multiple problems. The idea was that, by working together around a shared set of resources, local partners could integrate their service offering, detect and tackle emerging issues early and improve outcomes whilst making substantial reductions in service costs.

This ‘single bank account’ approach has not materialised in any of the sixteen pilot areas. Partners at all levels of government have proved reluctant to pool budgets, although some have aligned specific funding streams behind local programmes. Within Essex, ECC and NHS North Essex PCT cluster have committed financial resources (ECC £500k from the Early Intervention Grant and the PCT cluster has committed funding to the value of £95k per year until 2011-12). Other partners have committed staff ‘in kind’.

Through the EssexFamily project, Essex partners have pursued an alternative approach to the development of community budgets. Rather than adopting a single, top-down approach to our work with families, partners across five areas are developing innovative, locally-led prototypes; which means working with small groups of families to constantly test and re-design approaches to intervention. These prototypes are designed to deliver those interventions that best meet the specific needs of local families and their communities. The learning from this approach will be used to inform business cases that will embed new practice and improve outcomes at an Essex-wide scale; by tackling the needs of families, and delivering savings of at least £2.5 million per year.

Our experience of the EssexFamily project has informed our wider approach to community budgets. The knowledge we have gathered in Essex, and the experiences from other pilot areas, has highlighted key lessons for the future development of community budgets. These lessons proved valuable in helping Essex partners develop a strong bid to pilot a whole place community budget in 2012.

System Change

Community budgets should focus on sustained systemic change rather than short-term outcomes. By focusing the first wave of community budget s on families with multiple problems, officials at the Department for Education emphasised the need to make savings by reducing the costs these families place on the taxpayer. They therefore focused on short-term outcomes – the number of families supported and the short-term costs avoided ( not always leading to cashable savings ) . Given the pressures facing public finances, and the disproportionate demand these families place on services , this short-term focus is understandable. Y et our experience suggest s that the value of community budgets extends far beyond th is . We must not limit the contribution that community budgets can make to long-term systemic change in the way public services are configured around individual, family and community needs .

Fundamental to the EssexFamily project is the engagement of families and communities in defining problems and seeking solutions and the empowerment of professionals, allowing them to recast local services to better reflect local needs . The insights provided at the grass-roots level drive the develop ment of interventions to reshape and join-up services, streamline processes and improve citizen experiences. As new insights emerge, interventions are reshaped further . By placing communities at the heart of system change, we can be confident that, when taken to scale, the change will prove more effective in reducing cost and improving outcomes than a ny drive t o deliver short-term outcomes for a single cohort of families . It is crucial that this approach is replicated in the design and delivery of whole place community budget pilots. Essex partners have set out proposals for the development of a pilot based squarely on the principles of local autonomy, on reshaping services for the long-term and on working with communities to co - produce solutions and ensure that reshaping reflect local needs and circumstances .

Community Budgets vs Pooled Budgets

The development of a community budget does not necessitate the creation of a ‘single bank account’. It is more important that partners across government agree to pursue common outcomes, plan and coordinate their use of resources and develop integrated decision-making structures. It is important that partners recognise the impact that their resourcing decisions will have on others and that they maintain oversight of overall spending, but the creation of a single funding pot itself is not a prerequisite.

While shared budgets may be appropriate in some areas (e.g. for strategic capital investment), there is little evidence to show that the mechanism itself saves money or contributes to improved ongoing service outcomes. Where service improvements or savings are delivered these tend to be the result of better service coordination, commissioners’/providers’ shared ambitions and the alignment of incentives. Pooled budgets can help support these factors, but they remain one tool among many. There are also risks associated with the pooling of budgets to support ongoing service activity. A single pot means a single accounting mechanism and, ultimately, a single decision-making body accountable for spending decisions. Again, this may be appropriate in some areas (e.g. supporting investment in strategic infrastructure) but it sits in tension with moves, at local and national level, to increase the influence individuals and communities have over day-to-day public services.

As whole place community budgets are developed further, we would encourage those leading local pilots to think beyond pooling mechanics, and to focus instead on aligning ambitions, resources and incentive structures, and on ensuring that decision-making power rests with citizens and a devolved network of local commissioners.

Barriers to the development of community budgets.

Coalition Government Ministers have made a commitment to barrier-busting as a key component of their approach to localism. While this is welcomed, it is important that attention is not focused exclusively on technical barriers (e.g. on reviewing regulations, procedures or protocols). The most significant barriers to the wider development of community budgets are institutional and rather than technical.

Perhaps the most significant barrier stems from the ‘departmentalism’ that characterizes Whitehall activity. The powerful decision-making hierarchies that exist within departments concentrate key decisions at the centre, limiting officials’ ability to adapt local delivery practices or focus on outcomes wider than those directly prescribed in departmental plans. The consequences are that, despite the eager engagement of those staffing local agencies and junior Whitehall officials, programmes such as community budgets are seen by many departments as secondary to their core business.

We are hopeful that the involvement of a wider range of departments in the Whole Place Community Budgets pilots will allow for greater flexibility in local delivery and a wider focus. Senior officials from across central departments have been involved in the process of selecting pilot areas and will be seconding staff to support the delivery of the pilots themselves. We do, however, have some concerns that the starting point for these pilots has already conceded the priority of centrally-driven programmes of reform. The DCLG prospectus inviting partners to express their interest in hosting pilots made clear that existing reforms such as the roll-out of Police and Crime Commissioners, the development of Clinical Commissioning Groups, and the establishment of the Work Programme must be placed at the centre of any proposals. ECC supports these reforms, and is working with partners to ensure their effective delivery in Essex, but the requirement that pilots ‘build on this programme of reform, not substitute it’ risks limiting the potential for system-change from the outset.

It is crucial that barriers to sustained system change be reduced as far as possible in the design and scoping of future community budgets. Mechanisms to remove barriers once pilots have been scoped and developed have enjoyed limited success.

The EssexFamily project has enjoyed the support of a Whitehall Champion – a Director General in the Department of Health. Our Whitehall Champion has given valuable support to the EssexFamily project, but the role of a Champion is necessarily limited in its effectiveness. Champions need to be selected at senior level, but as seniority increases, the capacity to engage with the project, supporting and actively facilitating success, diminishes. The role of Champion can therefore become limited to investigating specific technical barriers or addressing barriers of process. The same is true of barrier-busting activity at Ministerial level. ECC participated in the group led by Baroness Hanham but, despite its focus on barrier-busting, no clear mechanisms were developed for raising, escalating and tackling particular issues. Rather than barrier busting, this group proved most useful in allowing pilot areas to share experiences, address common concerns and develop the learning from pilots across the country.

Despite the challenge that cultural barriers present, there is good reason to be optimistic about the prospects for developing community budgets further and the changes these could deliver in local public services. Although early pilots will, inevitably, be limited by elements of centralism and departmentalism, community budgets themselves provide a powerful mechanism for bringing about changes in this culture. The involvement of a range of Whitehall departments means the proposed pilots have an opportunity to demonstrate the benefits of decentralised services, local flexibility and front-line autonomy to organisations that have, until recent years, pursued top-down approaches to improving social outcomes. Some of the key factors underpinning the success of these pilots will therefore include Whitehall Departments’ ability to resource these pilots, depth of engagement, openness to new approaches and willingness to make changes from prescribed models of delivery to better meet local needs. If the whole place pilots can achieve this in a small number of areas, they could bring about a watershed moment in the shaping of public services.

December 2011