HC 163 - Minutes of EvidenceHC 163

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Oral Evidence

Taken before the Communities and Local Government Committee

on Tuesday 18 June 2013

Members present:

Mr Clive Betts (Chair)

Simon Danczuk

Mrs Mary Glindon

James Morris

Mark Pawsey

Andy Sawford

Heather Wheeler

________________

Examination of Witnesses

Witnesses: Cllr Peter Halliday, Leader, Tendring District Council, Ian Davidson, Chief Executive, Tendring District Council, Richard Puleston, Assistant Chief Executive, Essex County Council, and Cllr Kevin Bentley, Deputy Leader, Essex County Council, gave evidence.

Q99 Chair: We are now starting our third evidence session for the inquiry into community budgets. Welcome to all our witnesses. For the sake of our records, could you just say, moving down the line, who you are and the organisation you come from?

Richard Puleston: Richard Puleston, Assistant Chief Executive at Essex County Council.

Cllr Bentley: Councillor Kevin Bentley, Deputy Leader of Essex County Council and the cabinet member for economic growth.

Ian Davidson: Ian Davidson, Chief Executive of Tendring District Council.

Cllr Halliday: Councillor Peter Halliday, Leader of Tendring District Council and portfolio holder for finance.

Q100 Chair: I always say if you agree with each other, there is no need to repeat the agreement; you can just say you agree. We always like to see counties and districts agreeing with each other on these occasions-and even officers and members agreeing with each other, if that happens as well.

Just to begin with, you are involved now in a pilot-or have been-and we are going to talk to you about your experiences with that. There has been a history, around the whole concept of community budgets and Total Place, of pilots and evaluation and trying to forecast where the benefits are. Do you think we have now got the real deal and we are going to make some progress into real savings, real achievements and real improvements in service?

Cllr Bentley: The short answer is yes, I do believe this is the real deal. That is the headline. Certainly in my political career, which has now spanned some 10 or 11 years, it is the first time that we have seen lots of partners around the table with one common aim. Whether that is just led by where we sit in the financial world at the moment is difficult to say. Certainly it is a driver, but there is real determination. Having an elected police commissioner as well has really brought the crime element into it; we are working together to correct reoffending. We are working in a very integrated way with our colleagues in the health service; that really has worked. Economic growth has brought lots of people together-from the local authority, in terms of further education; principals of colleges; and also, perhaps importantly, the business community-with one common aim: to correct the skills imbalance there has been between qualifications offered and jobs that are available. As I mentioned, in terms of health as well, there are people around the table with one common aim, and that is to reduce the cost of delivery of the work that is required to help people. It is also-and perhaps colleagues from Tendring who have been heavily involved in the Families with Complex Needs work will tell you as well-removing a lot of the bureaucracy around that and getting better outcomes for people. The bottom line of this, having said yes, is better outcomes for the residents we serve and also a more costeffective way of delivery.

Cllr Halliday: I will add to that and say it is probably the start of the real deal. We have started touching on where we could go. Certainly in the Families with Complex Needs projects, we are seeing a district council work with organisations that do not normally touch the district council unless we are picking up a few pieces that they have meddled with and we get the fallout from. Starting to work with them and look at what they do and how we can put some work into saving them money is the start of something really quite special.

Q101 Chair: I will say to the two officers, then: this is working so well and the benefits are there for everyone to see. Why do we need yet more pilots? Would you be telling civil servants to advise ministers: "Get on with it. Roll it out across the country, because everyone can make savings"?

Richard Puleston: In answer to the first question, one of the issues around community budgets is we have got themes like the integration of health and social care, and the demonstration of the success of that is not going to take place over the course of the next few months. That is a programme that is in train for several years. We will not really know the outcomes of some of the delivery around community budgets until 201920, which is when our community budget pilot goes out to in terms of those business cases.

In terms of rollout, I would say this is something where we have done a huge amount of work. We have probably produced 1,000 pages of business cases around our community budget. One of the differences of community budgets compared with other initiatives, like Total Place, is the fact that we have had a very strong focus on business cases and substantiating the benefits of the type of activity that we have been engaged in. That is a fundamental difference that can give us some confidence and ought to give the Government confidence as well. I would certainly say to the Government: "You have got lots of evidence from lots of different types of places across the country. You should use that as the basis for considering rolling this out much wider now across the whole country. We do not need more pilots."

Ian Davidson: One of the first things to say about community budgets-and partly answering the first question-is that it was not about Essex County Council taking a pilot and then leading on it; it was about all the partners coming together. They were not all the normal suspects; it was fire, police, probation and a myriad of other partners, as well as local government at different tiers. One of the key things it has shown is that, if you do it right and if you do it early, the outcome is that you improve public services for less cost. If you have got a methodology that is working, you could complicate it by doing more and more pilots, but what we have done with the pilots is work on what we have already got as a template-as a methodology-in order to start implementation. Otherwise, what will happen in a year or two years’ time is that you will hear, "Oh, there was a pilot before. How did that go? I had forgotten about that one. We are into the next pilot now," and it is "What is the present bright and shiny thing?" rather than saying, "What is the next thing?" It is not about the pages we produce but the people we serve. The people we serve has had some really positive outcomes, and we have got some evidence for you on that.

Q102 Chair: Following on from the point about local partners getting engaged, it is easy to see why organisations involved in delivering services in the same community can come together-it takes a bit of effort, I am sure. But one of the concerns has always been that central Government departments have national policies, national programmes and national procedures, and whether they can come in and relate to a local way of doing things has always been perhaps the biggest challenge. Have the central Government departments addressed that to your satisfaction? You have also had, as I understand it, relatively senior civil servants engaged in this. If we rolled out across the country to all local authorities, there would not be that capacity for the civil servants. Are you convinced the departments have really got it now to work with you in that way?

Richard Puleston: All Governments have understood for some time that there is a fundamental requirement to join up. That can be done through Whitehall machinery, but what is different with community budgets is a recognition that that needs to be done close to the scene of the action. A really good example of that is the Troubled Families work, where what we are trying to do is to integrate services right at the individual or family level to make sure that that happens. In terms of the engagement with Government and the role of senior civil servants, they were helpful in terms of helping us prove the case. As four pilot areas, it was very useful for us to have that level of engagement. They certainly enabled us to get into departments and have the right types of conversations. As I said earlier, having done that and having demonstrated the four or five business cases that we have put together-likewise, the other pilot areas will have done something similar-there is enough of a head of steam now that Government departments understand, broadly speaking, what it is that we are trying to achieve, and to make sure that that can roll forward. It does differ according to different Government departments. I think it would be fair to say that those Government departments that have an interest in joining up, like the Treasury and Cabinet Office, have been very supportive; other Government departments have required more persuading in terms of some of the propositions that we have put forward.

Q103 Chair: Which departments?

Richard Puleston: If you look at community budgets as having two elements, one is reducing demand and the other is promoting growth. It is around the promotion of growth that we have had the most difficulty in putting forward propositions that Government departments could receive and work with, so I would say BIS. They have not been obstructive or difficult to access. There have been no issues around that, but our community budget propositions around skills and economic growth is probably the area where we feel we have made less progress than in some of the other areas.

Cllr Bentley: What I would say in response to the first part of the question, before we get on to which departments, is that we make sure we all leave our badges outside and come together as equal partners. This is not, as you have heard, Essex County Council, Tendring or the NHS; it is about getting the right solution for people, using our skills to do that, and making sure we are not duplicating each other, which has been the natural effect of having so many different organisations and partnerships working to get that common outcome.

In terms of which departments, Richard is absolutely right about BIS. They have not been unhelpful; it is persuading them that our case is strong. Perhaps this is wishful thinking, but we wait for the CSR next week to see what will happen with the single pot. If skills is included in that single pot, that tells me that community budgets has some real traction and we can devolve down to the local area, where we can deliver on the ground, some of that skills work. No one has been unhelpful; they have been extremely helpful. The civil servants who came in to Essex County Hall and worked with colleagues around the county as well were extremely helpful. You cannot duplicate that across the entire country; what you can do is take the evidence from that work and share that with other people. That certainly has been going on as well. The expression we have used is that there is a cook book out there that says: "This is how to do it; this is the methodology." That will be very useful for lots of our local government colleagues around the country when their turn comes to do this.

Q104 James Morris: I have a very quick followup on the departments. You did not mention our friends at the Department for Work and Pensions in your assessment of departments that may or may not be amenable. Have you had any discussions with DWP about the Work Programme or local employment issues at all as part of your deliberations?

Richard Puleston: We were told at the outset of the application around the community budgets that the Work Programme was off limits, as was the principle of the NHS being free at the point of delivery. There were always two areas of activity that we were aware as we went into this programme it would be unlikely we would be able to change. Subsequently, there have been other areas that also have proved difficult to get traction with. In terms of working locally with DWP, they have been quite helpful. We have had secondees in from the Department to help us look at the relationship between benefits and skills, so we have done some work around that.

Ian Davidson: Taking it to the practical end and frontline delivery, as district councils are, we have had a secondment from DWP to support some of our work around job creation and the Families with Complex Needs, and that has been very helpful. They came to the table perhaps slightly later than the beginning of that, but in terms of the delivery, the important thing was that, as a set of partners, we all came together and, as a set of partners, it was about saying, "What are the issues facing families"-which was our particular approach-"and how do we address them?"

Q105 James Morris: Do you perceive this whole community budget thing as being led by CLG or driven by you in consultation with Government? Is it very much a CLGdriven exercise?

Cllr Bentley: Perhaps I can give you the answer from a political dimension, sitting as the local politician. It is a partnership, and it is us working with all colleagues-in my case political colleagues-both at the national and local level to make this work. I do not see this as being instructive or being led in this; it is about working together and us driving some of the agenda as well. It is about challenging each other. That has been very worthwhile. It is something I have not come across before, but to understand the challenge and to challenge each other has certainly been worthwhile. By having no name tags and understanding that the outcome is to serve the people better, we have ended up in a very good place.

Ian Davidson: I have been a part of this from day one-from going to the panel and to the interviews to get the community budget, right the way through to delivery today-and, as Kevin quite rightly says, it has been a partnership and partnerdriven. We have never felt as though somebody has been behind us pushing; it has been, "What can we do to support? What can we do to facilitate?" There has been an important aspect around the delivery. We have been looking at how we join up partners and are seamless, and one of the things is to ensure that Government departments do the same in reflecting that.

Q106 Mrs Glindon: Mr Puleston, you have already mentioned difficulties with BIS. The Committee would like to know whether you have had any further discussions with BIS about Essex’s plans to reshape the skills provision for 16- to 24yearolds that was rejected in the pilot.

Cllr Bentley: Yes. I have met with the Minister and we have had a very good exchange of views. I think it is fair to say he was very sympathetic to what we had to say about the local delivery of that. Clearly, he has his own national plan to deliver as well, which is why I said a moment ago that we wait to see what happens in the CSR and the single pot for LEPs, and whether skills provision is in there. I would like to think it will be, because we have a job to do on the ground, as well as working with colleagues at the national level to make sure we have that skills provision. The bottom line of this is making sure young people have a future, a job and a career to go to, making sure that the skills that they are learning in college are matched up with the local employment needs, and also making sure that we can get greater prosperity not just for our corner of Great Britain but for the whole of the country as well.

Q107 Mrs Glindon: Could I ask everybody: what needs to be done to allow local areas to use community budgets to promote growth?

Richard Puleston: The thing that it would be helpful to do would be to clarify the policy landscape. One of the things that is very difficult for us at the moment is that there is a single growth pot coming through a Local Enterprise Partnership, which is a different geography to our community budget geography; there is a City Deal in our area in Southend, which has privileged access to local growth initiatives; and there is the thing we are trying to negotiate through our community budget. We have, in a way, three separate negotiations or discussions going on about how we can promote growth in the same area. That makes life difficult for us and probably makes life difficult for Government. We have tried to do this. It is not obvious to us who in Whitehall is coordinating those strands and makes sure that those three things fit together, albeit I think a new growth committee has now been announced, which hopefully will do some of that joiningup. Clarifying the policy landscape at the outset would have been helpful for us.

We understand that things change as you go through quite a lengthy process, and we are realistic about that. Things have changed in terms of the negotiation around skills. I am not sure that, as we went into that, there was great clarity about precisely where we might come out from the position of Government. We got into a discussion about what Government I think terms "licensed exceptions". From the perspective of Government departments, they have already negotiated with places like Sheffield and Liverpool licensed exceptions to the national skills approach. At some point in our community budget discussions and negotiations, we were pushed into a position of trying to fit our proposals into licensed exceptions that had already been agreed by Government with other places. The issue for Government there is how much tolerance it can have for bespoke agreements on growth and skills in different parts of the country. I am assuming that is why there is a limit on the number of City Deals there are. I do not know how far Government can go with a process that wants to negotiate with individual places separate deals on things like skills. We have certainly found that difficult and, as I say, the whole dynamic has been to push us towards more generic agreements, away from the national skills system, that have already been negotiated elsewhere.

Cllr Bentley: By the very nature of holding a pilot, you are seeing whether this is going to work. I firmly believe this does work. It has brought people round the table who may not have naturally sat round the table to start with, but they certainly have done that and have done a great deal of work together. Without repeating anything Richard said, it is about learning that, when you are around that table, you cannot hold on to everything all the time; you have to let go and sometimes devolve some of your responsibilities down. I suppose you could call that power. Whatever you wish to call it, it is letting some of that go and realising other people can deliver that.

I think we have demonstrated that extraordinarily well in greater Essex. By that, I mean all the local authorities, including the two unitaries and other partners as well. Perhaps I would say to Government: "We have demonstrated this. You need to demonstrate it too. You have to let go of some of those responsibilities to allow people on the ground to deliver." We have to make sure we have that economic prosperity. It does not come from diktat. We all know that, and the Government certainly knows that. This Government has gone even further than any other on devolving power and I welcome that hugely, but we all have to realise that to enable some of the things to happen, you have to let go. That would be my only plea to the Government.

Cllr Halliday: It is very difficult to demonstrate how it would benefit the growth agenda. What it does demonstrate is how you can do things better within the same financial restraints that we all have. We are doing things differently and other people are saving money. For a district council to put in a resource, which is very difficult to find at the moment, for something like Families with Complex Needs, you need to be able to demonstrate that you are making those savings for other people in their departments and they are then able to spend that money on things that may well entail growth. At this stage, at a pilot level for what we are doing with the Families with Complex Needs, it is very difficult to demonstrate how that benefits the growth agenda. It would not be a bad thing if they were disconnected from each other, because although they are linked, I do not think they are the same thing.

Q108 Mark Pawsey: I would like to ask some questions about payment by results. I know that this is being used in the context of community budgets. Is that something you have started in Essex? Is it something you are looking at? Where are you with payment by results?

Richard Puleston: Payment by results is definitely something that Essex is very interested in.

Q109 Mark Pawsey: Why only "very interested in"? You started nearly 18 months ago. Why is it not in place?

Richard Puleston: It is in place.

Mark Pawsey: It is in place. You are interested in it and it is in place.

Richard Puleston: Yes. There are two elements I would point to there. One is the Troubled Families work that Louise Casey sponsored and is part of our community budget. Tendring colleagues can talk in more detail about that, but there is a payment-by-results element to that activity. Essex is also one of the few local authorities in the country that has negotiated a social impact bond. There is a very heavy dimension of payment by results associated with that social impact bond. That is a privately financed investment vehicle to achieve outcomes for children on the edge of care. If the results are achieved, then the people who provided the finance for that bond get their money back.

Q110 Mark Pawsey: Have you got as far as people identifying those results and benefiting from them, or is it too early for that?

Richard Puleston: It is too early for that. It has taken a long time. It has taken us 18 months to negotiate the SIB, but we have got the finance in place and that is now up and running, so there should be some good results down the line from that. Again, none of these things will happen or be capable of robust evaluation over a matter of months; this is something that will take place over the course of five years.

The only other thing I would say about payment by results, and one of the reasons why we are interested in payment-by-results mechanisms, is that it does, by its very nature, drive a much more forensic approach to policy propositions and outcomes. It requires a more stringent approach to the way in which you identify potential results, because you need to be able to establish cash values to them, and that needs to be done relatively robustly.

Germane to community budgets, payment by results does tend to require you to have a more joinedup approach, simply because the cohorts that you are dealing with often overlap. We have a payment-by-results mechanism in place for families with complex needs, or troubled families, who may be the same cohort, in some instances, as families who are subject to a payment-by-results mechanism through the welfare programme; they may be the same cohort of people who are subject to a payment-by-results mechanism through our social impact bond. We need to be alive to that so that we can understand who has added value and who should get the reward in terms of those payment-by-results approaches.

Q111 Mark Pawsey: You have introduced payment by results in respect of Troubled Families. Are there any aspects of the community budget that has come together where payment by results would be inappropriate, or would not work? Why would it not work?

Ian Davidson: I was hoping you were going to say "appropriate" not "inappropriate". I had just got that ready for you.

Q112 Mark Pawsey: Well, tell me what is appropriate. We are going to reduce it to that. We want to understand where this is going to work and where it will not work.

Ian Davidson: That is a really valid question. As Richard said, we have been leading on the Families with Complex Needs. We took the Troubled Families and extended that and said it is much wider. Troubled families are level 4 families, where a family is in chaos: 90% of what is spent is reactionary once the family is in chaos.

Q113 Mark Pawsey: We have got questions on Troubled Families coming up later on. I would be interested to know where, in principle, this idea of payment by results would not work.

Ian Davidson: The example I was going to give you was about how it does work in terms of families.

Q114 Mark Pawsey: Can it work everywhere?

Ian Davidson: I have not seen a point in which we have been working where payment by results in terms of us working with our partners would not be successful.

Q115 Mark Pawsey: So the principle could be extended to every aspect of community budgets.

Ian Davidson: There is an issue about how you pay for something, because, quite often, the cost of a community budget does not necessarily fall with the organisation that benefits from the community budget.

Q116 Mark Pawsey: That was going to be my next question. How do you deal with that?

Ian Davidson: There are different ideas, but you can have a "payback" fund whereby you say, "This is a scheme that comes out. It is part of the community budget. It is jointpartner. The payback comes from a different partner." That is how you get the payback into it. It is a replenishing fund by which you would take it, create a scheme and then pay back into the fund and it would replenish itself.

Q117 Mark Pawsey: So one body makes the investment but another aspect of operation gets the benefit.

Ian Davidson: Precisely.

Q118 Mark Pawsey: Are you doing an accounting transfer? How are you dealing with that?

Ian Davidson: At the moment, we are.

Q119 Mark Pawsey: How much time does that take?

Ian Davidson: We have done some work around the Essex families, but what we have not done is the transfer back of the money. What we are saying, as a pilot, is: "These are the costs." It is early days-or rather months, in terms of the figures; I have got a set for each of you. They are quite visible. One of the key things is that it is very obvious-for example, with Family A and Family B-that the interventions are often around police and different agencies, but, once it becomes part of the Families with Complex Needs solutions pilot, it then becomes the County Council, the District Council and other agencies that the cost falls to, but that cost significantly reduces. As I say, there is a copy for each of you. There are a couple of families, plus others. The green line is reduced cost, the grey line is what was happening before, and the different agencies are there, but it is how you transfer the cost of that.

Q120 Mark Pawsey: Have you got as far as transferring the cost?

Ian Davidson: No.

Q121 Mark Pawsey: How are you going to do that in the future?

Cllr Halliday: That is the key to community budgets working: to understand how you do that. As a district council leader, I do not understand how that is going to work yet.

Q122 Mark Pawsey: So there is a big question mark over its viability and success as far as you are concerned.

Cllr Halliday: Absolutely, and about payback. I can understand how we would do that with the County Council, because we have close political ties and we have close conversations; we could do that easily. With health partners and the police, for example-that figure demonstrates how the amount of new interaction by the District Council has saved a huge amount of interaction by the police force-how do we take that forward and get the police force to add to our budget to cover the resource that we are putting in?

Q123 Mark Pawsey: Could I sum that up? You are worried that you are investing but not getting any reward for your investment.

Cllr Halliday: Absolutely right.

Q124 Mark Pawsey: Is that causing you to say that these things might not be a good idea?

Cllr Halliday: No. What it is causing me to say is that the budget we have got and the resource we are putting in is done-"moral" is a strong word-on a moral thought: that it is the right thing to do. As a district council, we have said, "Actually, this is right. We can see where the savings are for our community and for everybody that is in it," but there will come a point in time-no doubt very shortly after the Spending Review-where I, as the Leader of the Council, have got to decide where I am going to put my senior officers’ resources. At the moment, I am happy to put them into this, because I can see the benefits for the community and the longterm savings that will be made by the whole community budget. But-and it is a big but-at the end of that process, when we have done that and we have done all the work we have done and demonstrated all those savings, it will be a body above us that puts in legislation, I imagine, that says those powers need to be transferred to a district level.

Q125 Mark Pawsey: Would it be the case that, in the absence of those costs being transferred back, you would be putting money into the community budgets that might prevent you doing other core functions of your council?

Cllr Halliday: The danger of that is that we will not put resource into the whole community budget because we simply cannot afford to, because the statutory things we have to do still need to be done.

Q126 Mark Pawsey: Would you say it is a bit of a work in progress, then?

Cllr Halliday: It is definitely a work in progress. Hopefully it is work towards a new norm. A lot of the pilot work that we have done on the families is becoming the norm at county level, which is brilliant. We do not really want to let go of it because we see the benefits to our community, but we still have a statutory duty.

Cllr Bentley: Having listened to that exchange, I think the answer to this is measuring the outcome of all of this. If a council at any level, or any organisation at any level, stops doing a piece of work that it is currently doing because of the outcome that it has gained from the piece of work, it frees up the resource to go elsewhere. That is very important. The outcomes of this are what you must measure it by. That is where I start: "What is the outcome of what we are trying to achieve?" Then you can work backwards.

Q127 Mark Pawsey: Are there some aspects of the operation of the community budget where the outcome is rather more difficult to measure? If you are enthusiastic about it and say it is a great idea, how are you going to deal with it in an instance where the outcome is difficult to quantify?

Cllr Bentley: The answer is it is difficult but not impossible.

Q128 Mark Pawsey: So you have got to find a way?

Cllr Bentley: Absolutely. Colleagues here will have done more work than I have on Troubled Families, and that is one of the big areas where there is a lot of benefit in what we are trying to do here. We can either say we will let the status quo carry on, in which case it is going to cost an awful lot of money with an awful lot of organisations, or ask, "Is the outcome right for the people we are trying to serve?" That is the underlying message for me: the outcome for the people we are trying to serve. On the basis of that, I think we will find that resources will not need to be directed towards a family, because there will be fewer people trying to achieve the outcome and we will get a better outcome because there are fewer people doing it; therefore, those resources can go elsewhere.

Q129 Mark Pawsey: Picking up Councillor Halliday’s concerns, is this because you are a twotier authority? Would the problem not exist if you were not?

Cllr Bentley: No. I will say categorically, as I said a moment ago, we leave our badges outside. We sit down round the table as one organisation trying to achieve the outcomes for people.

Ian Davidson: Some of that is around: "It’s police; it’s probation; it’s fire."

Q130 Mark Pawsey: So it goes beyond local government.

Ian Davidson: It is knowing and understanding that it is a myriad.

Cllr Bentley: Absolutely.

Q131 James Morris: Picking up on the Troubled Families piece, to what extent are the outcomes being defined for you by the centre?

Richard Puleston: As far as the community budget is concerned, we are calling our approach to that "Family Solutions", which is broader than just Troubled Families. In terms of the Louise Casey work and Troubled Families, those outcomes are defined by the boundaries of that Troubled Families programme. Whatever the inputs were into the fund that enables that payment-by-results mechanism to work, those outcomes have been defined.

Q132 James Morris: I know we have got some other questions on this, but could you just give me one example of a result on the family intervention programme?

Richard Puleston: On the Troubled Families?

James Morris: Yes. What is a definition of a result that will then get a payment?

Richard Puleston: Reduced worklessness.

Ian Davidson: There are a number of families we have been working with. What happens is that we identify a person to work with the family. What has happened before is that if you had an individual who went to probation, were on a charge, perhaps had mental health issues, each member of that family had an assessment done and was assessed by a different agency. That took time, cost money, and was a dislocation of the service. What we now do is have a family assessment.

Q133 James Morris: That family assessment is a point that triggers a payment, is it?

Ian Davidson: No. The family assessment triggers whatever intervention or support that family needs. As a result, we can demonstrate a reduction in terms of police interaction with the family; improved interaction with education; children staying in school-there are a myriad of positive outcomes for the families that have gone through Families with Complex Needs that reduce the cost to the taxpayer.

Q134 Simon Danczuk: How is financial accountability being maintained across the Essex Whole Place pilot?

Richard Puleston: The issue of financial accountability is complex in one way and very simple in another. We do not have pooled budgets as part of our community budget approach. To that extent, there is no financial accountability across partners. What we are working towards is a series of business cases, so the accountability in terms of the flows of costs and benefits will work through those business cases, which will need to be signed off by all of those key parties.

Cllr Bentley: In the skills area-it will be true in the other areas too-there are sponsoring boards, which will be made up of the local authority and, in the case of skills, business people, who will see that financial control as well. There are people who are monitoring it both from local government and from business as well.

Ian Davidson: For example, in a family with complex needs, each of the interventions are costed, so you can see where the range of costings have come from preintervention and postintervention. You can identify the costs and where they are coming from. What we have not yet done, as you heard from a previous answer, is identify how you repay where the payment has come from rather than where the saving has gone to.

Q135 Simon Danczuk: Will that prove a problem, if you have not worked that out yet?

Ian Davidson: We have got that; it is how we do the mechanisms. That is the next stage for Families with Complex Needs, as Councillor Halliday said, around the importance of being able to take community budgets to the next stage so it is a holistic approach to public services, and the cost and the savings are holistic in terms of both the cost and the benefit.

Q136 Simon Danczuk: Why haven’t you pooled budgets?

Richard Puleston: Just because we did not think that was a sensible place to start. That talks to structural solutions, and what we wanted to do was start with the experience of individuals and families and work from there. Pooled budgets may be something that makes sense, and certainly there are some elements of our activity where we might look to that, but it is not an end in itself. What we are trying to do is improve outcomes for individuals, families and communities, and if a pooled budget is an appropriate mechanism to achieve that, then we would explore that, but, as I say, it would not be our starting point in terms of the activity.

Q137 Simon Danczuk: Is there any opposition amongst elected members to pooling budgets?

Cllr Halliday: I do not think pooling budgets is necessary. If the ethos across budgets is that it is a whole community budget, it does not matter where it sits as long as whoever is doing the work is paid for doing the work. For those who get the outcomes and do well out of it, that is fine, but if others are doing work that crosses over with other organisations, there should be openmindedness. It is difficult to talk to you as you have not seen the paperwork. It will become clear when you see the timeline of the two families that we have demonstrated. When the police symbol completely drops off, the Tendring District Council symbol comes on; their intervention has completely eradicated police intervention with a certain family. They need to look at their budget and say, "We look at our budget differently and we will make sure that some of your resource is covered." It is an ethical thing rather than a pooling of physical moneys.

Q138 Simon Danczuk: But is that happening, Peter? If the police are making a saving, is there some sort of money going back to the District Council because of the intervention?

Cllr Halliday: Currently there is not, no. That is the whole point of it. As a local politician, I do not deal with policing in terms of budget, but I deal with it on the doorstep at election time-that is one of the issues that you find yourself trying to deal with. If you could demonstrate to the police that the work of the District Council is so important to help them save money and put more police on the beat, I would have thought they would play along with that. The new Police and Crime Commissioner has agreed to take part in the community budget; he understands the ethos of it. I do not think it is just about pooling pots of money; it is understanding that it is all public money and you are all doing things to provide a service for everybody else, and taking that mindset about your budgets.

Cllr Bentley: To answer your previous point, certainly from the Essex County Council point of view, there has been no opposition to this at all-quite the reverse. Up until this moment-and hopefully beyond as well-it has been welcomed crossparty, because it is about the outcome. It is what we are trying to achieve for people.

Richard Puleston: Many of our partners have invested in achieving these outcomes. For example, schools, through the Schools Forum, have put £1.5 million into supporting the Family Solutions programme, and other partners have also contributed in that way.

Q139 Simon Danczuk: As a final example, are you guys, as elected members, not bothered that the new police commissioner gets a load of credit for reducing his budget and putting more police on the streets while you councillors do not get any of the credit? Are you happy with that?

Cllr Bentley: Do I mind? I suppose we only mind at election times, don’t we? We have worked very closely with our police commissioner. He is fully on board with this, as you heard Councillor Halliday say. He understands what we are trying to achieve and he is part of that achievement. Again, it is what the outcome is for the public. If the outcome is right for the public, then we can all take a share of that.

Q140 Heather Wheeler: I am going to jump in about this business of the twotier arrangement. You have been telling us fantastic stories about how you all work together. How do you get your staff to work together? It sounds like you have got this very good board that understands what is what, but do you have people sitting in each other’s offices? Where are you all based? How does that work?

Cllr Bentley: We are based in "Team Essex", right across the county. While it is a very large county-the secondlargest county in Britain, I believe-it is about what we are trying to achieve for people. It is not a question of getting staff to do this, although I understand what you are saying; they are very eager to do this, certainly from our point of view-we will hear what Peter says, but I am pretty certain he will say the same thing. We all came into this business-whether you at the national level or us at the local level-to improve the lives of people. This is a piece of work that really does improve the lives of people. It is about sharing information. With modern technology, you do not need to physically sit in each other’s offices; you can do that quite happily and quite speedily across the electronic ether. Information is shared to get this work done, and colleagues at whatever council or organisation-including the police and the health service-are working very closely to get these outcomes and working very clearly on the business cases that we have presented. We have had no effort at all in making this happen, neither at the political level nor at the officer level.

Q141 Heather Wheeler: So the management structure is from the District Council up to the County, including the police and the probation service. Can you datashare? Have you not had issues on that?

Cllr Bentley: We will come on to datasharing. One other thing I want to say is: it is not "up to the County Council"; we are all in this together.

Heather Wheeler: Sorry, yes.

Cllr Bentley: Datasharing is an issue. Peter may want to comment, by the way, on your first point, but datasharing can be an issue. I will let officer colleagues here explain how datasharing can be a problem, and we do need national politicians to help us out on this.

Cllr Halliday: In terms of officers working together, again, it is a mindset, isn’t it? It is about whether or not the politicians leading the councils want their officers to engage with other authorities and make sure they are doing what they think is the best thing to do. We do not have any problem with that. We engage very well at the county level. We have got the health and wellbeing boards, where we engage with the health partners as well. We are leading on that, which is a good thing. It is about breaking out of those silos and, in doing so, not creating different silos to work in. We have achieved that quite well over the last few years.

Cllr Bentley: Very much so.

Cllr Halliday: As far as datasharing is going, the first three months of the work on Families with Complex Needs was spent with people sitting around the table saying, "We cannot tell you this. You need to know it, but we cannot tell you." One of the interesting things in dealing with the families is that officers have fed back to us that one of the families said, "Do not worry about datasharing. If you want to know about our family and our lives and what is going on, have a look on Facebook, because it is all on there anyway." After three months of hard work, there was quite a bit of agreement between the families that sharing their information was the right thing to do, so it is done on a voluntary basis. Moving forward, where we are trying to engage with families at level 4 need of intervention, where it is harder to get that voluntary take, legislation will be needed to ensure that people who have got the data can share it. You need that evidence to demonstrate that it is well worth sharing that data, because if you do not do it, you are starting at a brick wall.

Richard Puleston: Can I comment on the joinedup nature of the approach? One of the strengths of the community budget and one of the reasons why it is different from previous initiatives is precisely that there has been a very intensive programme of joinup and engagement horizontally and vertically-across all public service partners in greater Essex and also with Whitehall-which has been a considerable strength. In terms of the way in which the programme has worked, all parts of the public service have been developing the ideas and contributing to how we articulate those outcomes and how we bring together those business cases. At a programme level, that has worked well. Most of the solutions that we are putting in place require us to work in new ways that require us to bring together partners. This is not predominantly a twotier issue; this is about all public service partners in new structures. A lot of that will be around things like the Family Solutions teams, which will not just be children’s social services but will also draw on housing, drug and alcohol type activity, health services in terms of mental health, or whatever it might be; all of that is brought together in one place. It is the same with things like domestic violence, where we are trying to bring together groups of people who previously may have worked in silos. They are now working in more joinedup ways in more joinedup teams. That has been a significant strength of community budgets.

Ian Davidson: I think you are looking at the practical side of it on the floor as well. One of the things we started with was a board right across, with the partners, to make the families with complex needs address and engage with practitioners. We had had the political steer and the senior "Yes, go", but then we needed to get into dealing with families, getting into the interventions and getting into the families. That was a team of people brought together to work together to look at families’ issues. As a result of that, what Essex has done is said, "Yes, this is a way of working. This is what we need to do," and they are now establishing initially four-there will be eight-Family Solutions teams across the whole of Essex, which are multiagency and multipartner, to come together to look at and deal with families across Essex. Where it has gone from a pilot for Tendring-and other areas have done different types of pilots-we have said yes to a multiagency team, but they do need to come together. Some of the staff within there will be parttime, some will be there for particular issues, and some will be fulltime, from all the agencies-it is not just Essex County Council; it is right the way across. They are sponsored and brought together by the different agencies to look at families from that point of view, rather than it being, "Who do I ring up? We are not part of one team." From a pilot where they are working as an individual, it has gone through to them altogether. The informationsharing point is a real issue. There is no doubt it is an issue. I do not think we should hide from that.

Q142 Heather Wheeler: I will finish off now, if I may, because we are a bit short of time. You have a multiagency team, but you are still not pooling budgets. My question was going to be, "In the next Spending Review, what do you think would be the best outcome for district councils?" but you are not pooling budgets.

Ian Davidson: We only had a very short window for community budgets. We could have spent a lot of the time working out the governance and the legality of pooling the budgets on it. It was easier to work on the pilot and align the budgets. The next stage for Family Solutions is how we then pool them, but we would have spent not just three months but nine months looking at pooling budgets and the issues there with accountable bodies and all that sort of thing rather than getting in and talking with families, dealing with families and having outcomes for families.

Heather Wheeler: That is a very fair answer.

Q143 James Morris: If we believe the analysis of the Barnet "graph of doom", as it is called, the rising cost of social care is going to be a major financial pressure for local authorities over the next 5, 10, 15 and 20 years. To what extent do you think community budgets can be developed to help with the integration of health and social care that everybody seems to want?

Ian Davidson: One of the key things-and one of the early ones-is about looking at how you use community budgets to reduce demand. The only way you are going to reduce budgets and reduce the impact on public services and the cost to the taxpayer and have a more positive outcome for communities is by reducing demand. Demand can be reduced by doing things like strengthening communities. As part of the community budgets, we had four work streams going, and we identified halfway through that what we fundamentally needed to do to reduce that demand was to strengthen the communities around them, so we created a fifth work stream for supporting and developing work to strengthen the communities.

In terms of social care, we have done some work around, for example, having joint social care and health work and shared working there. That has been around pooling and bringing together contracts, and bringing together working. Richard can tell you a bit more about that. That is about how we reduce cost and demand, but also how we deal with demand for services. They will be the two fundamental ways, in direct answer to your question. If we reduce demand, we will reduce cost and have a better outcome.

Richard Puleston: Can I make one comment on that? A fairly fundamental principle of joining things up at the local level that is particularly relevant to the health and social care interface is the issue about costshunting. It is easy for social care to shift costs on to the health service and vice versa, and that holds good in other areas of public service at the local level. One of the points about community budgets is that we all sit round the table, we have all got visibility, we are all having those conversations and we are all trying to find a more intelligent way of working collaboratively to ensure that does not happen, because that is not reducing demand; it is just pushing it off into another part of our public service.

Q144 James Morris: It is more than just sitting around in a room and behaving collaboratively, isn’t it? It is about the money sitting on the table. This whole area is a bit of a nobrainer, isn’t it? Yes, health and social care need to be integrated, but we have not really got a successful model-unless you have in Essex; you might tell me-for how we go beyond collaborative working to having an integrated service.

Richard Puleston: You will not be surprised to know we are not sitting on a blueprint in Essex for how that works. Today and tomorrow, we have got all of our health and social care partners at an accelerated design event to support looking at that in more detail. That sounds like fun for everyone. We have got five integrated commissioning plans now, which have been signed off through our health and wellbeing board; we have a sixth integrated commissioning plan that picks up all of the services that the County Council does and enables health partners to play into those. As far as the County Council is concerned, we have a transformation programme that has now established five posts-one per CCG-for integrated health and social care commissioners. We are edging towards this. I think people recognise that it is primarily where all the money is. It is massive amounts of spend at a local level-about £5 billion across the health and social care system in Essex. It is also a mammoth task. Even though we have done 18 months of work, we are only just edging into some of the detail that will need to be unpacked in order to make that a reality.

Q145 James Morris: I do not know whether this is one for Councillor Bentley, but what are some of the barriers to achieving this integration, do you think?

Cllr Bentley: I mentioned a little while ago making sure that we know when to let go of some of the responsibilities, or some of the power, that has revolved around what we happen to do. It is understanding that. If you are willing to really devolve down to people who can deliver it, you then have to let go. It is quite important that we do that. That work has been done and is going on at the moment, understanding that people on the ground can get better outcomes for those people than we can sitting around a table, as you mentioned a moment ago, but someone has got to hold the strategy, which is what we do. It is having that faith and having that ability in people to get that done, devolving that responsibility down to them, and making sure that the work is carried out and that the outcome comes. That is the barrier that I see. My challenge back to Government is to make sure that they also release some of that responsibility down to us at the local level-when I say "us at the local level", I am not talking about county or district; I am talking about, in our case, greater Essex-to enable us to do that. I am hoping with the Spending Review we will see a bit more of that through the single pot.

That is a barrier that we understood very early on. We realised that unless we are prepared to make sure that we are devolving those powers down to people to get those outcomes, we are not going to succeed. We have done that, by and large. It will carry on. That is a big ask of health colleagues. They have played a fantastic game in our part of the world to make sure that we are able to deliver a lot of that, and some of those barriers are now coming down. The barriers that existed now do not. Yes, there is some work to be done. I think we will achieve a significant success for the people we serve in our county.

Q146 Chair: One of the issues about this joinup between health and local government is that the only accountable elected people are local councillors. When the ward closures and hospital closures start as part of this move to caring for people in the community, will local councils take responsibility for that and take the lead in promoting it?

Cllr Bentley: The answer is how you communicate the story. My background is in communications. I was a journalist who became a politician, which is something of a disaster, I suppose.

Chair: It is an improvement, I think you might say.

Cllr Bentley: Some might say that, Chair. It is about how you communicate that story, isn’t it? If you just announce, let us say, a closure of something, that is going to infuriate people. If you have started a conversation way in advance of that about why that is happening or what the outcome is going to be and how people will benefit from that, clearly there will be people who are upset-motivated in some cases by party politics and in some cases out of a sense of fondness for whatever you are trying to reverse. However, it is how you communicate the story. A large part of what I have been involved and engaged in for community budgets is the explanation to the public of what we are trying to achieve, why we are doing this, and what the benefits for them on the doorstep will be. Do the councils take responsibility? Ultimately we are elected, and therefore ultimately we have to explain that story, take the decisions and explain why. Any politician, at whatever level, who does not explain what they are trying to achieve very successfully will soon find themselves unelected, I suspect.

Chair: Councillor Halliday, you agree with that, no doubt.

Cllr Halliday: Yes. I was just going to say we do not have the responsibility, but we certainly get the flak. That is the biggest problem. One of the things that needs to change is that, at the moment, we can demonstrate very clearly financially that, in the reactive world we live in, where people react to a problem instead of doing something about it and not allowing the problem to start, we could save enough money within the Families with Complex Needs project to keep the hospital open. Give it to the district councils and let us deal with it. Give district councils the ambulance service to look after and I bet we would not have the same issues we are having today. I bet we would do it much better.

Heather Wheeler: At least you would know where the roads were.

Cllr Halliday: We understand our local need. We understand what we need to do to make sure that is delivered. Sometimes it seems that up on high that is not necessarily the case. We take responsibility at election time, like everybody else does, so let us have some of the responsibility. If you were to change the proactive nature that we have and put that into some of the other organisations that we have to deal with and take responsibility for politically, I think you would see a vast amount of savings. We have not got a bigger pot of money; we have got the same pot of money that has been split up slightly differently. In some cases, our money is not being protected-it is being reduced-but we are being asked to do more for those departments whose money is being protected, which is quite interesting.

Q147 Mark Pawsey: I want to go back to Troubled Families. We have spoken a bit about that as a good example of how community budgets can work, and I do want to ask you about how lessons and good practice may be learnt. But the idea of Troubled Families is it is a finite policy; it is an objective of the Government to deal with problems by 2015. I understand from the recent Troubled Families report there are 2,220 families to be dealt with in Essex, of which 293 have been worked with so far, which is 10%, yet the number of turnedaround families by March 2013 was zero. Could you explain that?

Ian Davidson: What we have done is broadened Troubled Families to Families with Complex Needs. There is always a debate around the numbers of troubled families, and I will not go into that. One of the things we felt was that if you stop the families going into chaos, rather than being in chaos, then the troubled families-the ones that are causing the most cost to public services and the most impact to other citizens-are the ones that will have the best outcomes. In Tendring, we identified that there were 320 families costing around £47 million, which were those ones that were families with complex needs. That is wider than the Troubled Families cohort. As a result of that, that is the one that we have been working with. We have now transferred that to Family Solutions but carried on, as a district council, working with the Family Solutions team to work with both the troubled families and those families who we can stop going into level 4-or stage 2-to stop the outcome on that.

Q148 Mark Pawsey: So it is not a finite policy, then; it is an ongoing policy, as you see things.

Ian Davidson: Yes.

Q149 Mark Pawsey: In terms of the way you have gone about that work, what lessons are there that you can apply to other disciplines between both councils?

Ian Davidson: I know this sounds a bit trite, but there is no doubt that all agencies are working closely together to say: "What do we need for this family? What are the triggers?" I will give you one example. A family had multiple issues with young people but one of the children needed severe respite care and support. It was costing a lot of money for weekend support for the parents. Another child had behavioural issues, etc. As a result of that, we talked to the family. What was it they wanted? A £200 tent so they could get away together. The cost saving to the taxpayer is phenomenal.

I know that may seem a very simple example, but it is about working through with the family and understanding what the needs of the family are. If we can do that, it reduces the impact-it reduces the cost to the taxpayer. That is a small example, but there are multiple examples of where working with families in different ways-educational needs; abuse within the family-is about how we understand the workings of the family and how we understand what are the triggers that move them to troubled families.

Q150 Heather Wheeler: To finish off, if you were looking in your crystal ball, if this is not rolled out across the whole of the nation, in five to 10 years what do you think will be happening with councils and these sorts of families?

Ian Davidson: One of the key things is that the cost is going to escalate, because you are not dealing with the core of what the family issues are. Most issues around individual people within the family are wholefamily issues. The cost will escalate. We may play around the edges-we may have different schemes and they will be forgotten and we will move on to the next pilot and people will ask, "What was the last shiny thing?"-but the cost will escalate as a core. In the long term, dealing with the families is about how we reduce the cost and reduce the number of families that are in need and the impact they have on society. The impact on society is not just for the family; it is in the society around them as well.

Cllr Bentley: Why would you not want to do this? We have proved this can be successful. We have still got some way to go, as you have heard my colleagues say, and there is no such thing as getting to an endgame; you can always improve what you are doing. It is the outcome that is the most important thing. Why would you not want to do this? If you want to sit in a silo and say, "That is what I do. That is my flag in the ground; I am not budging," that is a very sorry state for the people that we serve.

Cllr Halliday: If you do not do the community budget, in five to 10 years’ time you will have made a load of unnecessary cuts and reductions in services that I do not believe are necessary. If you think differently about what you are doing with the money you have already got, you can provide far better outcomes for much less money. I think that is where you would find yourself in five to 10 years’ time: that we have made a load of cuts and society is, unnecessarily, a lot worse than it is now.

Richard Puleston: To complete the quartet, if we do not manage to shift the spending from that acute end of intervention to prevention-Mr Morris has already mentioned the Barnet "graph of doom" and the LGA have produced well rehearsed and evidenced extrapolations of what might happen to public spending affecting local authorities. As Kevin has said, I do not think there is a plan B; this is a way of working that we see as absolutely vital in terms of the future sustainability of services and making sure that the people of Essex have decent lives.

Chair: Thank you all very much for coming and giving evidence this afternoon.

Examination of Witnesses

Witnesses: Steve Atkinson, Secretary, District Councils Chief Executives Network, and Chief Executive, Hinckley and Bosworth Borough Council, Chief Inspector Nicola Faulconbridge, Tunbridge Wells District Commander, Nazeya Hussain, Head of Policy and Partnerships, Tunbridge Wells Borough Council, and Paul Warren, Chief Executive, Rochford District Council, gave evidence.

Chair: Good afternoon and welcome to our new witnesses. Thank you very much indeed for coming. For the sake of our records, just going down the line, could you say who you are and the organisation you represent, please?

Nicola Faulconbridge: Good afternoon. Chief Inspector Nicola Faulconbridge. I am District Commander for Tunbridge Wells.

Nazeya Hussain: Good afternoon. My name is Nazeya Hussain, Tunbridge Wells Borough Council.

Steve Atkinson: Good afternoon, Chair. Steve Atkinson. I am Chief Executive of Hinckley and Bosworth Borough Council in Leicestershire, but here representing the district council chief executives.

Paul Warren: Paul Warren, Chief Executive of Rochford. I am also from the Essex contingent. I am supporting Steve in the District Councils’ Network.

Q151 Chair: Thank you. You are all most welcome. Starting off with what is happening in Tunbridge Wells, I think you are the only district that is leading on the neighbourhood budget approach. Where are you up to now with DCLG? Have they agreed your operating plan and your way forward, or are you still trying to get some further agreement from them?

Nazeya Hussain: I am delighted to say we have now had signoff on the statement of intent. We put in our submission with all the partners signed up in March, and two weeks ago we were told by DCLG that they have also signed up. We are delighted. We are making progress.

Q152 Chair: So all the partners are all agreed to this as well.

Nazeya Hussain: Yes-locally, and now with DCLG on behalf of Whitehall. We hope that now we have got that in place, we can move forward with implementation.

Q153 Chair: Do you think the process took too long to get this far?

Nazeya Hussain: We were surprised it took that amount of time. CLG are leading on behalf of Whitehall on this, but when it came to the crux, there was a piece of paper that needed to be signed-incidentally, we based our statement of intent on the one that Essex had produced-that required them to really think about what commitments they could make in the long term. For example, we were saying we would like them to continue to support us in terms of developing a robust case for a costbenefit analysis and a longterm evaluation, and, most importantly for us locally, to begin a dialogue with Whitehall around reinvestment over the long term. That may well have required some wider discussions within CLG and other Departments, because that is what they were signing up to.

Q154 Chair: In terms of the world outside Tunbridge Wells, important though that is to us this afternoon, are there any other district councils looking at going down a similar route? There are not any currently signed up as pilots, but have any started to move on their own initiative to try to take forward this approach of community budgets at neighbourhood level, or indeed a wider level?

Steve Atkinson: There are not any formally signed up at this point, but a number are looking at how we might have a districtsized pilot-preferably not a pilot, but moving into something more practical. Like the previous witnesses, most districts are now looking at having no more pilots and getting on and doing some of the work. There are some looking at having, for example, Families with Complex Needs and Troubled Families on a district basis, perhaps with a countywide overview-that is happening in Leicestershire, where I am from-so that we can join things up at a district level rather than just at a neighbourhood level.

Q155 Chair: Aside from Troubled Families, is the message out there that you do not have to wait for the Secretary of State to push a button to get this moving; you can look at what is happening in other pilots around the country and say, "Okay, we can do it as well"?

Steve Atkinson: Precisely. I think that is the way that a lot of district councils are now looking at it. We need to move, rather than wait for the goahead from above.

Q156 Chair: In Tunbridge Wells, some of the information you gave to us was that you did have this problem with some Government Departments, who did not seem to understand that working at a neighbourhood level might mean different outcomes and slightly different approaches from those that they would normally be accustomed to on a national basis, raising the spectre of postcode lotteries and, "We cannot go down that road. We cannot have differences in different neighbourhoods." Have you managed to cure them of that misconception?

Nazeya Hussain: The Committee has been hearing a lot about Whole Place budgets, but the neighbourhoodlevel budgets are very different in terms of what they are trying to achieve. It is about reducing the cost to the public purse, but it is also about having a conversation with our communities about what outcomes they want. That has been our starting point, whereas, if I am correct, the Whole Place budgets have been very much about the conversation with Whitehall. We have not had the same level of resource in terms of civil servants. It is fair to say that we have gone from theoretically talking about what we want to change to taking that leap and starting to deliver something on the ground.

What that has led to is some challenges that we want to put forward in terms of some of the practical things that are holding us back on the ground. For example, probation want to work with us on the preventive agenda; however, their remit is not to work with any offender that has been in prison for less than a year. They are just not funded to do that. That is a real challenge. One of the other big challenges for us-and you talked about this earlier-is the Work Programme. The DWP Work Programme in Kent has two preferred suppliers, so if you walk into a Jobcentre Plus as a couple requiring support, you cannot go to one provider; you have to go to one each, which may then lead you to go on a training programme that is 10 or 15 miles away from your partner. That simply does not work at the local level. They are some of the challenges that we are finding.

You have alluded to another issue, which is that there are a plethora of initiatives. I remind colleagues and Whitehall quite regularly that neighbourhoodlevel community budgets came before Troubled Families, and that has been a challenge for us. We are working to bring them together at the local level, but Troubled Families is payment by results topdown, with three targets, and neighbourhoodlevel community budgets is working with your communities before they become troubled and looking at what solutions you want to develop locally that are for that neighbourhood. I think it is fair to say that there is an expectation from central Government about the scalability and consistency of what we are doing, but for us, it is about a local solution: what works in that neighbourhood. There will always be that challenge about how you take what we are doing very locally for our residents and apply the principles to other areas, which will be very different because the communities are very different. I do not think we have got the answers to all of it, but they are some of the tangible challenges that we are facing in a very small area.

Q157 Mark Pawsey: I wondered if you could give us some examples of services that are being supplied through neighbourhoodlevel community budgets. How do they work at a very local service level?

Nazeya Hussain: It is a small neighbourhood; we are a district within the largest twotier county in the country. We decided very early on that we wanted to start small; we did not want to go with a big bang theory, because, as my colleague has said, there have been so many pilots and initiatives, and this community that we are trying to work with is fatigued in terms of consultation and people saying, "Here is something we are going to do to you again." Our approach was very quiet and simple, and the thing that we wanted to focus on was families that were yet to be troubled. It is about helping those families.

Q158 Mark Pawsey: We have gone back to Troubled Families again, but much of the responsibility for dealing with issues that affect trouble families is at a county level. My impression was that your neighbourhood level would be looking downwards to smaller bodies, such as residents’ associations and parish councils. I am interested in looking at that direction. What services do go in that direction?

Nazeya Hussain: Sherwood does not have parishes, so we do not have a parish council in that area. It is north of the town centre. What we have done is worked with local partners.

Q159 Mark Pawsey: What sorts of partners specifically?

Nazeya Hussain: There is a children’s centre there; the local GPs have a strong role to play in this; we have worked with the housing association, which is currently redeveloping the area; we have worked with our police colleagues very operationally as well as at a strategic level; and we have worked with health, in terms of health visitors; and with libraries. We have worked with lots of very local, frontline delivery people, because they know what works and also what the barriers are.

Q160 Mark Pawsey: Those guys do not have budgets, so how is this all coming together? A good council would be consulting with all of those organisations you have just listed anyway. What is new and special about what you are doing?

Nazeya Hussain: What is different about this is that this is not something that we decided to go with just because Government was looking for pilot areas. We have been working in this area for at least five years. We identified this area as a priority area among all of our partners and we have a very strong and established public services board, which has all these partners around it.

Q161 Mark Pawsey: But an effective district council should be doing that anyway.

Nazeya Hussain: One of the reasons we decided locally to go for it was to accelerate what we were already doing. We were very clear from the outset that these problems are very complex and difficult. What we wanted to do by being a pilot was to really push forward in the current climate to try to do stuff much quicker and to act as a catalyst for real change.

Q162 Mark Pawsey: I wonder if I might ask, Chief Inspector Faulconbridge, if you could tell us how the police got involved in this neighbourhood pilot.

Nicola Faulconbridge: We are involved at every level. I am a member of the public services board; therefore, I am involved at a strategic level in terms of how we are delivering and working with the pilot. My inspector is part of the operational board, and then my tactical offers and my local PCSOs are delivering on the ground. Through the pilot, we have strategic, operational and tactical resources within every single agency that is involved. You asked a question of my colleague around budgets. What we put in and what every organisation has committed is resources. I have not physically put money on the table; I have put my resources where they matter most-where I can deliver real change.

Q163 Mark Pawsey: Why do you need a neighbourhood pilot project to do that? Why would you not be doing that anyway?

Nicola Faulconbridge: Because before-as we found when we all came together-we had different objectives. Every organisation had its own set of objectives, and we all have various targets that we need to achieve. As part of the Sherwood pilot, we all came together, both at a very tactical level-we spoke to our practitioners on the ground before we started this-and at a strategic level through the public services board, and we decided what the common factors were that we could all deliver on that would make a difference.

Q164 Mark Pawsey: So you have got common objectives and common targets.

Nicola Faulconbridge: Absolutely.

Q165 Mark Pawsey: Could you give us some examples of those common objectives and common targets?

Nazeya Hussain: Absolutely. We have come up with six bigticket items. We have got a whole framework. There is a whole industry behind trying to pull this together, but we have picked six bigticket items, and they are big tickets because they are high-volume and high-cost: antisocial behaviour, the number of hospital admissions for drugs and alcohol, working to stop people being evicted-there are six of them; I should remember them all.

Mark Pawsey: Don’t worry, that’s fine.

Nazeya Hussain: There are six of them. We have decided that collectively those are the things we are going to focus on. Nicola does the daytoday work around policing; we, as the Borough Council, pick up the bins-there is a whole range of things. Another one is around getting people on Employment and Support Allowance back into employment. It is about saying, "What are the big six things we can collectively grapple with and try to improve that will genuinely change those families?"

Q166 Mark Pawsey: How about the budget problem? Many of the things that you are investing in are going to give savings for bodies that are not involved with you. Is that frustrating? Is there a way you can get some resource from their savings?

Nazeya Hussain: So far, what we have been trying to focus on is getting this off the ground. As I said earlier, that is around having that conversation with Whitehall around the investment. We know that by reducing antisocial behaviour and hospital admissions, the savings will go to central Government Departments. We might be naïve, but we want to start that conversation and say, "If these are the projected savings that we will make over a 10year period, what reinvestment can that bring back?"

Q167 Mark Pawsey: Are you speculating on that, or is there a definitive route of benefit for you to achieve something?

Nazeya Hussain: We are developing a costbenefit analysis very much along the lines of the Whole Place areas. We are developing a robust case around these six indicators, which will set out what we think the benefits and the savings will be over a period of time. We will use that as our evidence base, as Whole Place budgets have, to try to have that conversation.

Q168 Mark Pawsey: Are there other districts doing the same things as you?

Nazeya Hussain: We are a pilot, but I am aware that there are other districts in the other 11 areas.

Q169 Mark Pawsey: Are you talking to those other districts?

Nazeya Hussain: We are. There is a network, facilitated by the LGA and DCLG, where we share best practice, and we have all talked about common things around evaluation, costbenefit analysis and community engagement. We have developed some "how to" guides, so if Ministers were minded to roll this out, they can learn from the experience we have had so far.

Steve Atkinson: Can I just add to that, Mr Pawsey? You said that good district councils should be doing this. The evidence is that a lot of good district councils are already doing that in different ways and it has not been badged as community budgeting. It is a relatively new concept, but it is not necessarily something new on the ground. The evidence that you have just been given is that it is not just talking to very local agencies, families and communities, which you are doing; it is also bringing in people who would otherwise operate countywide under an umbrella structure rather than dealing with things locally. What is being done extremely well in Tunbridge Wells but also elsewhere is bringing people together from different levels and tiers, not just in the local government world but in the wider public service world, to be more family and community centred than they have been in the past.

Q170 James Morris: A neighbourhood budget implies to me that the neighbourhood own it-it belongs to a neighbourhood. To what extent can that idea be made a priority, do you think, within this concept of neighbourhood budgeting? Often it gets bogged down in very technical discussions among agencies, and even local people still feel a little bit alienated from that. How can we go about making sure the neighbourhoods own it?

Nazeya Hussain: In Tunbridge Wells, we started this pilot by doing some ethnographic research, which hopefully you will have seen in the papers. That said, "We have invested a significant amount of money, and continue to do so, in our organisations and collectively in this area. Why is it not having the impact that it should?" That was us putting our hands up and saying, "We need to learn by going and understanding these communities." Some very clear messages came back to us. One was that there is no such thing as one community. There are lots of different groups of people and they have very different priorities and means of gaining what they want. The other thing was that there are some perverse incentives in the system. The ethnographers went and spent some time. One of the examples that always comes to mind is that there were some families where they walked in and there was mould on the walls. They were asked, "Why is that there?" They said that if they left it there, they perceived that they would get more housing points. That is not the reality. There was that idea that, if you do not look after your house, you are going to get a better house. Why is it that residents feel like that? More worryingly and more crucially in terms of expenditure, if there was then to be a child that had breathing problems, they would make sure that that child was diagnosed through the GP-which is why the GP is crucial-to make sure that that also got them more points. We also had a plethora of partners trying to get people back into work. Everybody is in on it. Everybody wants to get people back into work.

Q171 James Morris: How do we overcome these difficulties that you have identified?

Nazeya Hussain: Part of that is about us as the public sector recognising the cultural challenges that this presents to us. We need to change the way we work. We are in our professional silos and we need to become more generalist. We need to start by understanding what it is that these families need to do. It is about letting go. It is about going back to those communities and giving those communities a stake in the improvements you want to make.

Q172 James Morris: On the point about giving them a stake, I hear what you are saying about the dysfunction, but how do we give communities a stake in a neighbourhood budget?

Nazeya Hussain: The way that we have approached it locally in Tunbridge Wells is by setting up a governance arrangement that has community residents on it. Again, the insight told us that there are some very vocal people in the community who are probably attracting resources and energy from our public sector, but we need to engage the wider community. We are setting up a governance arrangement where we are going to get new community representatives on that board. We have also, as partners, pooled together £100,000. I know it is nothing-it is a small amount of money-but it is the intention to have a budget that can be influenced by local residents in terms of shaping what the priorities are for that area. Our plan is over time for that board to become a commissioning board, with our elected members on it, and for the community to really try to drive what happens in that neighbourhood in the medium term.

Q173 James Morris: Steve, have you got anything to say?

Steve Atkinson: Thank you. There are two concepts here, or two messages. One is to give the message to the community that the public services-I have to keep saying that, because otherwise people think it is just local authorities-take their needs seriously. As you said, £100,000 may not be a lot of money, but it will be for that community. That is the important message. The second one-the culture change-is about public services taking a bit of a risk and letting go, as previous people have said, to be able to respond to what communities want in a nontraditional way, and not always playing it safe within what the accountants say we should do. To many people in public service-individuals, authorities and agencies-that is a risk. It is something we have not necessarily done before, but increasingly, authorities are taking that risk and beginning to have some small benefits. They need to be publicised locally and nationally so that people can see that that change is in hand. We should not underestimate two things: the cultural change that needs to take place within many organisations; and the time frame over which this will have an effect. I think Mrs Wheeler said 2015, but actually very little will be seen by 2015 that has any substance; we will be on the journey, but a lot of this is not going to show great benefits probably until well into the next Parliament. We are realistic enough to know that, and I would hope that Government Departments accept that as well.

Paul Warren: You have heard quite a lot about Essex, so I will try to add things that the others have not talked about. Picking up on Steve’s point, when we were doing the business plans, we were looking over a three to six-year period. In many of the business plans, we were looking at breakeven around year three and four, and it was only in the latter part that you started to see real dividends around some of the work we were doing.

I would also at this point like to emphasise that this is not just about local government. The key thing for me in my engagement in community budgets has been around seeing some of the other agencies come to the table and us unpicking the way we deliver to individuals and families in a range of areas by openly challenging: "Can we do better?" I would hate for community budgets to be seen simply as a local government thing. It needs to be seen as a new way of delivering public services.

Q174 Simon Danczuk: If we are honest about it, it is all about the money really, isn’t it? That is the reality of it, is it not?

Nicola Faulconbridge: Absolutely not. It is public services working together to deliver better life outcomes for our families. We have taken the approach in Tunbridge Wells that we may not see the changes we want in this generation, but we hope we will definitely deliver better life outcomes for the next generation. This is a journey that we have to be on, and we will be on, across the public services for many years. The fact is if we do what we have done locally, which is to get the shared and agreed objectives, and deliver on those, we will change that. For us, it is not just about the money. Equally, we cannot be naïve. None of us can deliver what we need to without resources. In the short term, if we can, we will deliver better outcomes for people, which reduces service demand and will deliver the savings in the longer term. It is a journey; it is not a destination.

Steve Atkinson: It is unfortunate that in many people’s minds, some of them in some authority-with a capital A-it is all about the money. Whilst you rightly say we should not be naïve and say that money is not an issue, it is primarily about changing attitudes to how we provide public services across the country, hence no more pilots. By doing that and by early intervention, which has been mentioned before-intervening in people’s lives much earlier-we will change their lives much earlier and not have the legacy of responding year on year to difficulties that families and communities have. That will save money in the longer term. Primarily it will give better outcomes. If we concentrate on that and also concentrate on the growth of the country, which has not been picked up a great deal this afternoon, that in itself will enable people to lead better lives by having better education, better jobs and better health outcomes. That also will reduce the pressure on public services and public services budgets in the future. Again, there are two strands to it.

Q175 Simon Danczuk: Although, Steve, you said in your submission that the public sector should be incentivised to commit to community budgets, didn’t you?

Steve Atkinson: Yes.

Q176 Simon Danczuk: How should that be?

Steve Atkinson: That is, again, in two ways. It could be by allowing money up front. We also said in the submission that we were not asking to have more new money thrown at us, but the reallocation of money up front enables us to do things like has happened in the neighbourhood pilot-to do better research and understand our communities better. The expression "postcode lottery" came up earlier on. It is a postcode reality, I am afraid, that communities are different across the country. In many respects, it could be a postcode opportunity as well. We need to do that research. That is the incentive.

Q177 Simon Danczuk: Just to be clear, when you say reallocation of money up front, is that more resources at the beginning? Is that what you are saying?

Steve Atkinson: Yes, so that we can put the investment in and enable earlier intervention than we do now. What a lot of public sector agencies are doing now is responding to problems that have built up over many years-sometimes generations-not just in terms of families with complex needs. If we can hit those earlier, we stand a better chance, and families and communities stand a better chance, of not having these interventions in the longer period. That is the incentive. It is not that nobody believes it is a good idea. Hopefully we made clear in the submission that district councils are right behind the community budget concept because we believe that is the one way forward in terms of improving communities and therefore saving money in the longer term.

Paul Warren: Can I reemphasise a point that Ian and Peter from Tendring made? Whoever has made the investment up front may not be the agency that benefits from the greatest savings. How we look at that and how we think about how we tackle that is a challenge across the public sector. It could be that a small investment up front delivers quite significant savings in the longer term, and I would hate for some of the things that we are looking at to be thrown out simply because a small investment here is not possible when you look at it over the longer term.

Nicola Faulconbridge: A very practical example of that is our "just coping" families. We have got the troubled families-the ones with the very complex needs-but we looked at our "just coping" families, who are right on the edge. As an example, I have a father who is working five jobs to bring up his two children alone. His children spend time with their disabled grandmother, who struggles to look after them and manage, because the boy has behavioural needs and difficulties. By our group approach to him, particularly having the GP now very much bought into the Sherwood pilot-and we are looking, in the long term, with our regeneration project there, to colocate the GP within that whole community hub-we are able to pick up those very early warning signals, be it from schools, from the GP, from the social worker or from the youth worker. All those people talk on a daily basis; we pick up the early signs and we are able to get the support in early. Rather than wait for the family to fall off the cliff and then pick them up once they are in crisis and they have reached some of what are the currently very high public service thresholds, we are able to pick them up early. That prevents them descending, and that will prevent, in the long term, the cost, which is the problem at the moment.

Q178 Andy Sawford: I have got some questions about data collection, which has been a big focus of all the Whole Place pilots. Is there a danger that concentrating particularly the initial efforts in the pilots on collecting large amounts of data on baseline spending will delay implementation of community budgets?

Nazeya Hussain: Yes, I think it will. We have been there with Total Place, and we know where that ended. Our pragmatic approach in Tunbridge Wells-

Andy Sawford: This is the Sherwood pilot.

Nazeya Hussain: Yes, the Sherwood pilot. When it comes down to pennies, you think something is wrong, because how can you get it down to that minutiae of cost? We spoke to partners and asked, "What are the baseline costs?" and we came to a figure that we felt was probably about right, but we did not spent a huge amount of time.

What is really important, having said that, is that Whitehall needs to be convinced. They want our business case to be as robust as the ones in the Whole Place budgets. That is absolutely right, but what you have got to recognise is that for small districts, this is a huge capacity issue. We are being asked to develop something that is of the same robustness as the Whole Place budgets produced. Yes, we have done that work. It has been challenging and resourceintensive, but we have not spent a significant amount of time on that, because that can stop you. We were very clear that getting the community engagement right was crucial. We then looked at what different looked like, how we put that together and, most crucially, when we could get on the ground and start working with these families. We are doing it in parallel. We know that we have not got all the answers and we are asking for CLG to help us refine that, because you do need to make the case to local politicians as well as national ones about this approach, but you have to balance that with trying to do something on the ground. I do agree that you could spend a lot of time trying to get down to the minutiae of pennies and that will not get you anywhere quickly.

Steve Atkinson: No, and I am sorry to repeat what people have said previously, but if we concentrate on the outcomes and do not assume that everything has cost, which some people would like us to do, the money and how that is organised and allocated will, to some extent, follow. That is where you have concentrated and that is where a lot of other people are concentrating, very sensibly.

Paul Warren: If I look at the experience around the Essex pilot, there are some areas of data around spending that we were quite clear about, but there were other areas that were very grey. Rather than try to have a perfect picture, in some of those areas the approach has been: "Let us pilot this. Let us pilot that. Let us try to get the data better and we will learn as we go along." It may take a period to do that, but as we implement some of our projects, the data is getting better, we know what we are looking for and we know how we can evaluate it. Some things will work; some things will not work, but we can pick them up in an area as big as Essex in a pilot in a locality and then, if they work, roll them out, and if they do not work, look at some of the other things that are happening.

Q179 Andy Sawford: Have you refined any of your calculations as you have gone along?

Paul Warren: To some extent.

Q180 Andy Sawford: For example, in the Sherwood pilot-I know it was not your submission, but it is illustrative-you gave us some big global numbers, like £175,000 per annum for children in residential care. Did you find that some of these big numbers were more and some were less?

Paul Warren: The two areas I was particularly involved in in Essex-and still am, in a way-were domestic abuse and reoffending. With some of the financial modelling, the MOJ were very good with us in terms of working up some of these numbers, but again, when you look at some of the numbers, they work at one level but then you try to unpick them and think about how they relate to things on the ground. There are some numbers that you can assume, and we are doing some stuff now within Essex to try to get a better feel of, "Does this figure look about right or not?" If you look at domestic abuse, we are trialling in Braintree and Basildon some approaches to see what the costs are around that. We have got some big numbers around domestic abuse and we can scale that into an Essex context. We have got some volume numbers, but we have not got all the costs covered, so we are saying, "Let us try this here; let us try that there" to try to get a better feel on the context within Essex.

Q181 Andy Sawford: How have you found your partners responding to that view that you have just got to arrive at a figure?

Paul Warren: I want to reinforce this harmonious approach we have in Essex: we are all in this together.

Andy Sawford: I do not believe it.

Paul Warren: I would say we are quite pragmatic around that. We know what we know and there are bits we do not know. You take a decision on how critical they are and what proportion of risk they equate to in terms of that particular project. The beauty of going from the whole of Essex to looking at individual elements within it is that you can try things and the risk in a smaller area is contained within that area and you can work it across that.

Nazeya Hussain: There is such structural change happening around us that since we put our figures together, you have had the CCGs coming on board and they are saying, "That is probably an underestimate in terms of health costs". There is never a fixed picture, but we took a similar approach: "This feels about right. This is what it is based on. Now let us move forward with that." As my colleague has just said, it is about refining that over time and not being wedded to it to the point that what you are focused on is the cost. It is about the outcomes. It is about saying, "What does good look like? What does better look like?" and then tracking that. We are hopefully going to be tracking some families over a couple of years in terms of evaluation to say, "What really happened? Was it our intervention?" and then trying to do that qualitative as well as the quantitative to check to make sure what we are doing is reflective.

Q182 Andy Sawford: That leads me to my final question-the Chair wants to move on to another meeting at 10 minutes to 6, so if you could do a minute each, that would be very helpful. Is it clear how the success of neighbourhood budgets will be assessed centrally, both in terms of improved outcomes and the savings achieved? I know it is a big question, but are you clear about that? You were talking about outcomes over time. Are you clear now how central Government will assess the effectiveness?

Nazeya Hussain: Of community budgets?

Andy Sawford: Yes.

Nazeya Hussain: I do not think they know completely. I think they really want them to work and they are working very closely with us, but this is as much of a challenge for Whitehall as it is for us in local districts. I do not think any of us know completely what successful looks like, but we have some key indicators about what better looks like. There is a long way to go for all of us. For us, the proof will be in the pudding when we sit down and say, "What is the contract you are going to have with us locally in terms of reinvestment?" and then begin to have a look at some of that detail. I do not think we are completely there yet, because this is all new territory for all of us.

Q183 Andy Sawford: What do you think the Home Secretary is looking for?

Nicola Faulconbridge: That is a really challenging question. The reality for us is it has to be reduced call for service. We are reducing those calls for service all the time right across the public sector. That is in every public service agency, not just my own. The reality is that, for me, is success. Whether that is what the Government is looking for or whether they are looking for something different on top of that is a different question, and we need to rely on them to come back to us and tell us whether that is what they are looking for. Certainly for us it is reducing service demand over time that will be the key to success.

Q184 Andy Sawford: Would it be fair to infer, then, Steve and Paul, that you are not clear what the Government is looking for in terms of the outcomes and it is not clear how central Government will assess the effectiveness?

Steve Atkinson: From my point of view, whether central Government is clear or not, what is important is that local communities are clear about what they want out of it. Local communities, in terms of the District Councils’ Network, are looking at reducing demand. They do not want to have to use public services if they do not need to. If we can put them in a position where they do not because crime and disorder is down, there are better educational outcomes and people are living in better housing, because public service agencies are working better together locally, that is the best outcome, because that ultimately will reduce the amount of spend. Whether that is what the Government wants or not to some extent-this is probably heretical-is not really relevant to me. What I am bothered about is whether our local communities are better as a result of these initiatives and working together.

Q185 Andy Sawford: And in that nirvana that is Essex?

Paul Warren: We bask in the sunlight, I suppose, in Essex. I would say the work we have done to date would convince me that, whatever the Government’s view of it is, we will continue on the process we are on. It is a public service regeneration and transformation journey. We have got to continue to do it, because however you look at it and however you look at the resources, we need to square the equation of resources against demand, do things better, maintain or improve quality, and work for the public. The public out there expect a level of service. We need to continue to challenge ourselves as to how we do that. Whether it is called "community budgets" or something else, we will continue to do it, but it would be useful if Government helped us in the task rather than did things that did not help us in the task.

Chair: Thank you very much indeed for coming and giving evidence this afternoon. That is appreciated.