Community Budgets

Written submission from the Local Government Association (CBud 02)

The Local Government Association is here to support, promote and improve local government.

Local government is facing the most radical changes, as well as the most significant opportunities, in a decade.

We will fight local government’s corner and support councils through challenging times by focusing on our top two priorities:

· representing and advocating for local government and making the case for greater devolution

· helping councils tackle their challenges and take advantage of new opportunities to deliver better value for money services.

 

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1. Summary

1.2 Councils in the first 16 areas implementing community budgets have been pursuing an ambitious, yet necessary goal. Ambitious because it represents no less than a fundamental transformation of the way public services operate; necessary because the fragmented nature of provision with its myriad funding streams and bureaucracies has failed to deliver better outcomes. The stark financial climate has made the case for change ever more pressing.

1.3 Progress has been made, yet challenges remain. In the last year or so the development of integrated public services in pilot areas has been hindered by vested departmental interests, despite the work of councils to help families with complex needs.

1.4 There are lessons for the other areas joining them and the whole place and neighbourhood pilots. The Local Government Association (LGA) will continue to help share experience and knowledge across the sector.

1.5 Factors for making public service integration and community budgets a success will include:

 

· An accountability mechanism from place to Parliament that allows for the integration of public services;

· A strong local vision of the public service transformation that partners can invest into;

· Strong Cabinet-level political support for pooling (which means that local partners might shift resources from their budget to other local organisations better placed to achieve those outcomes);

· Joint Ministerial/council leader governance to oversee the success of community budgets (underpinned by local/central official level governance);

· Extension of the shared burden of proof in the City Deal prospectus to community budget areas;

· Support arrangements that are demand-led by places;

· Lobbying by Government of the EU to allow European Social Fund (ESF) pooling;

· Technical support for new forms of commissioning (for example an Early Intervention Foundation);

· Mitigation of the risk that new forms of local governance and commissioning structures in the police and health service respectively reinforce silos;

· Continued progress on systems issues, in particular data creation and sharing, including the pace with which information is shared; and

· Greater coherence in commissioning geography. DWP alone has 3 geographies - ESF, Work Programme and Job Centre Plus.

2. A Changing Context

2.1 The summer disorder dramatically altered the context to this initiative. The Prime Minister’s reiteration of his ambition to turn around the lives of 120,000 troubled families formed a central plank of the Government’s response, throwing into sharp focus the work being undertaken locally.

2.2 Further information on the approach of the new cross-governmental Troubled Families Team in CLG has very recently been announced. This will build on the existing approach and good work that is already underway locally. It recognises that it is clear that councils and their local partners have the services and relationships to work with families with multiple problems. Prior to the announcement, local government had not been waiting idly by while the Government developed its plans. Councils recognised the need to address the fragmented nature of services for these families and were taking action before the summer disturbances. They are doing this because it is a priority for them locally.

2.3 Due to these changes, the focus for this programme in Whitehall has moved away from reform of public services through community budgets to meeting the Prime Minister’s commitment. What has been learnt in the first 16 areas will nonetheless be valuable as local areas build on this work and continue to change and improve services for families with complex needs. However, it is the whole place pilots that offer hope for realising the full potential that local government has long argued place-based budgets offer: public services that, freed from the constraints of arbitrary organisational and funding structures, are able to address the needs of a local area more accountably, efficiently and effectively.

3. National arrangements and support

3.1 The national support offer and programme management has not been helped by two departments with differing priorities steering it. CLG’s agenda was to test the community budget concept, whereas Department for Education’s (DfE) interest lay in the direct support to troubled families and less the mechanics of public sector reform. The establishment of the cross-departmental Troubled Families Team in CLG, and the consolidation this represents, presents an opportunity for a more coherent approach across Whitehall.

3.2 There are a variety of different attitudes to the principles of community budgets. The success of the Bichard Group in achieving cross-departmental cooperation of officials appears to have been limited. The Political Leadership Group led by Baroness Hanham provided a forum to address issues at a national level, such as data sharing and simplified assessment, which have seen progress. However, some barriers, including those the whole place pilots may encounter, are likely to need a high level of political influence to challenge the status quo.

3.3 The shared burden of proof between local level and Whitehall set out in the recent City Deals prospectus should also be extended to community budget areas. Whitehall should be expected to devolve power unless it has a legitimate and evidence-based reason not to. Central control should not be the default option.

3.4 The Government has offered an array of support to the first 16 areas, but a demand-led approach would not only be more effective, but a better use of resources. Whilst there have been common challenges, not all areas require the same types or level of support. One size does not fit all.

3.5 DfE provided practical financial support, in the form of an advance of future years’ Early Intervention Grant allocation and funding for Exemplar projects for areas to explore and develop approaches to common issues such as investment agreements. DfE also commissioned consultants with expertise in family intervention to provide advice and support. Whilst some areas have found this useful, others have sufficient experience. The persistence with which the consultants have approached some councils creates the impression of a re-establishment of the wasteful and ineffective field forces rightly abandoned by this Government, rather than a genuine offer of support.

3.6 National support could have been more beneficial, had it been developed to meet the actual needs of local areas.

4. Barriers and progress

4.1 Local areas have encountered various barriers in developing their community budgets, some of which have been overcome or worked around, some are a work in progress and some remain. Not every barrier necessarily needs a central government solution; sometimes what is required is a greater understanding in Whitehall of the constraints that local areas must work within and their associated impact.

4.2 Progress has been made: stronger relationships have been forged across agencies, the evidence base further developed, priorities aligned, governance put in place and multi-agency delivery models are working with families to turn their lives around. But the pace of progress has sometimes been frustratingly slow and limited. Budgets have been aligned and resources combined, but pooled funding - crucial to overcoming split incentives, the perennial obstacle which hinders investment - has in most cases failed to materialise.

4.3 A huge shift is required for people to think "whole public sector": to think about the investment, outcomes and savings across an area, rather than in organisational silos. Investing when another organisation may reap the benefits is counter-intuitive to the traditional protection of organisational or departmental budgets and needs both technical solutions and political will.

4.4 That Whitehall’s local agencies were not given a strong mandate to pool budgets did nothing to help overcome this challenge. The lukewarm message from parent departments gave neither confidence nor drive to make it happen. The Department for Work and Pensions (DWP) has enabled JobCentre Plus managers to make decisions about how flexible funds are spent locally. This is positive, but more is needed; the Government must send a much clearer message about its expectations for meaningful engagement with community budgets and trust its local agencies, devolving decisions about how budgets can be spent.

4.5 Also vital to addressing this barrier is the work being undertaken by the Greater Manchester and Birmingham Exemplar project to develop a joint investment model, supported by the necessary tools and techniques, to enable partners across community budget areas to move towards a position where they can jointly commission and de-commission activity to achieve shared priority outcomes with increased cost-effectiveness. A robust cost-benefit analysis model has been developed in partnership with government departments, including the Treasury, to support agencies in reaching an agreement on how much money each will commit to a specific intervention relative to the forecast level of benefit they will see in future. They have also developed an early draft of an ‘Investment Agreement template' that sets out the kinds of issues and questions areas are likely to need to work through in order to reach the point of being able to sign a legally binding investment agreement.

4. 6 The timing of the pilots in the financial year, when budgets were already committed, was an additional challenge. There are also barriers regarding accountability processes which are discussed in the next section.

4 .7 Organisations involved in providing services to the public have a legal responsibility to ensure that their use of personal data is lawful, properly controlled and that an individual's rights are respected. This balance between the need to share personal data to provide quality service and protection of confidentiality is often a difficult one to achieve. Effectively sharing data across agencies is important for identifying families that need to be worked with, developing an accurate profile of the issues they face and hence the most relevant services. It is a key and recurrent barrier on which some progress has been made. Key data that councils are still struggling to access include mental health services, HMRC household income, hospital admissions and discharge data and data held by GPs. Challenges are both technical and cultural and include, for example, data being held in different formats, absence of secure email servers across all agencies and excessive fear of action by the Information Commissioner’s Office. An Exemplar project has clearly identified the problems and is developing a solution, but this needs cross-government support. It has developed a draft information sharing toolkit, which includes a data sharing protocol template, case specific data sharing agreement, consent form template, privacy impact assessment guidance, skills development tools and capabilities tools.

4.8 Barriers need a combination of technical solutions, cultural and organisational change. Strong political leadership, locally and nationally will be essential to engender the fundamental changes that will underpin progress on a host of issues.

5. Administrative arrangements and governance implications

5.1 There has rightly been little prescription from central government as to the administrative arrangements for establishing community budgets at a local level. This local flexibility has been crucial to ensure an appropriate fit with the varied existing local structures and arrangements as opposed to a prescribed approach. A range of approaches across local areas have therefore flourished. The particular model is less important than ensuring that there is oversight and cooperation at both strategic and operational levels.

5.2 As raised in our evidence to this Committee’s localism inquiry, there must be greater accountability for how public money is spent. Unelected officials should be subject to strong democratic oversight. That is not to say that community budgets are a land grab by councils, but that elected members have a democratic mandate, know their communities and understand local strategic needs. Working closely with local partners, they can provide accountability to local communities about spending.

5.3 Two acid tests for shared accountability will be other partners being willing to pool budgets on the basis that it will achieve not only their outcomes, but those identified across the area, and, the confidence and ability to make decisions about the de-commissioning of mainstream services.

5.4 One of the reasons that Government departments are reluctant to encourage local agencies to pool budgets is one of national accountability to Parliament. Departmental Accounting Officers (Permanent Secretaries) have to provide assurance about the propriety, regularity and value for money of public spending voted to their department by Parliament.  Difficulties in tracking public spending have made some Accounting Officers reluctant to pool and align budgets.  But CLG and Treasury have developed a Memorandum of Understanding that makes Sir Bob Kerslake the single Accounting Officer for all money pooled locally in Community Budgets in 2011/12. This should be extended to future years to give organisations the assurance to combine budgets.

5.5 Parliamentary accountability also creates challenges for the Government's localism agenda.  Work is underway to address the issue of accountability and localism, spearheaded by Greg Clark, the Minister for Decentralisation. This work proposes that Accounting Officers for devolved services are accountable for the overall systems they put in place, that they can track performance, manage failure, and make allocative decisions, rather than the entirety of spending decisions locally.

6. Lessons for whole place pilots

6. 1 There are many lessons to be gleaned from the first 16 areas, both for the continued work with families with complex needs and for the whole place and neighbourhood pilots. It is important that learning continues to be drawn out and shared in a systematic way and the LGA is currently reviewing how to best support this.

6.2 There are significant challenges, but they can be overcome and will lead to more efficient, effective, responsive, targeted, accountable public services.

December 2011