Community Budgets

Written evidence from Essex County Council on behalf of the Essex Partnership Board (CB 05)

Partners across Essex, Southend and Thurrock have long supported the development of Community Budgets as a means of improving local outcomes and have worked to shape the concept since its inception.

· In 2010, local partners worked to develop Community Budget proposals and share these with HM Government. Essex was subsequently selected as a pilot area for Community Budgets focused on Families with Complex Needs.

· In December 2011 partners submitted a successful expression of interest to become one of four Whole Place Community Budget pilots. Since then we have worked with secondees from central government to co-design proposals for sustained system-change in local public services through our Whole Essex Community Budget (WECB) programme . Proposals developed during the pilot phase will deliver total net benefits worth some £388m to 2019-20 of which £118m will be direct cashable savings.

· In March 2013 resources were committed to detailed implementation plans and governance to deliver these proposals and develop further opportunities.

This experience gives partners across Essex, Southend and Thurrock a unique insight into the potential benefits of the Community Budget model, and the associated challenges. We are keen to use this experience to support the Committee’s follow-up inquiry, providing oral evidence in addition to this written submission.

The majority of this submission focuses on the specific questions asked by the Committee. However, based on our previous experience and our ongoing work to embed the Community Budget approach to partnership working, we wish to highlight the following points:

· Community budgets should focus local partners and central government on sustainable system-change : Community Budgets have the potential to bring about wholesale system-change in public services: joining-up and co-ordinating services, streamlining processes and improving citizens’ experiences. However, even with national attention and significant investment from central and local partners, making progress through the Whole Place pilots has been challenging. Without sustained government focus on this way of working there is a risk that, as public spending reduces further, partners at local and national level may struggle to dedicate capacity towards supporting long-term, whole system change rather short-term savings opportunities.

· Community budgets should focus on shared outcome rather than pooled budgets : there are risks associated with the creation of a single funding pot that goes against the grain of Open Public Services. Those leading work on community budgets should focus on public services’ pursuit of shared outcomes and on integrated commissioning rather than on the mechanics of pooled budgets.

· Government should not seek to artificially limit the scope of community budget activity : focusing proposals on social outcomes is not enough – economic outcomes are equally important. Community budgets have the potential to bring central and local partners together around a set of mutual commitments to unlock economic growth in locations across England. Despite encouraging Whole Place pilots to develop proposals to unlock economic growth, DCLG have since focused local negotiations exclusively through their city-deals programme. This risks limiting growth opportunities outside city areas and restricting the potential for national growth.

· Community budgets could become a powerful tool for culture change: The long-term value of community budgeting lies in the potential to change culture within the public services. Community budgets provide a vehicle that can bring partners together around a set of shared aspirations and to share in savings that accrue from improved efficiency and effective prevention. But to deliver change at the local level requires that there is space for innovation in local delivery models. Partners’ experience of the WECB programme suggests that this can be crowded-out by Departmental interests keen to protect the status quo and retain their current operating practices. If Community Budgets are to support meaningful cultural change, we would need to see:

a. greater transparency, particularly in areas where policy is so closely linked with delivery practice that any freedom to innovate is removed; and ideally,

b. a commitment that government policy frameworks should not extend to prescribe the form taken by local delivery models.

· It is important that local partners and communities get behind community budgets: This speaks to the need for effective communication and engagement. It is vital that those involved in community budget projects – and those affected by the projects – understand that system-change can bring about improved outcomes and effective prevention as well as cost reductions. Without clear, proactive messaging, from both local and national partners, there is a risk that community budgets could be viewed cynically as a way of simply reducing funding for public services.

1. Are Community Budgets an effective approach to working with troubled families/families with complex needs?

Yes - Community Budgets do provide an effective approach to improving outcomes for families. Indeed, by bringing partners together, through the WECB ‘Family Solutions’ project, we have strengthened local delivery of the ‘Troubled Families’ programme.

The national programme sets out criteria to support local areas to identify families and target interventions. However, local partners have taken a collective view that these criteria are too restrictive to support effective interventions at scale in Essex. Partners have therefore sought to use additional local criteria, widely scoped to allow a focus on high-cost families with complex needs in a range of circumstances. These criteria cover issues including domestic violence, drug and alcohol misuse, behaviour difficulties and neighbour disputes.

By adopting wide ranging local criteria, the Family Solutions project has brought multiple partners together to support family interventions. Essex County Council is providing funding for a range of staff in each Family Solutions team and Essex’s Schools Forum has contributed in excess of £1.5m across 2013-14 and 2014-15. Partners across the health sector, public health, police, local government and central government (specifically the local Department for Work and Pensions) have committed to sharing data, premises and employee time. Reflecting the recent reorganisation of local NHS, discussions are still in progress with Clinical Commissioning Groups regarding staff and other contributions. This collective activity will establish eight multi-disciplinary family teams to work with up to 180 families each, supported by a single data system for shared family assessments, an Essex-wide early help advice hub and a peer mentoring volunteer programme with up to 250 volunteers to offer longer term support to families. As benefits are demonstrated, additional resource commitments will be sought from partners.

Local work on Family Solutions has not begun from a standing start. Partners have previously worked together on Family Intervention Projects in various locations across the county (Children’s Social Care, Housing Associations and District/ Borough Councils) and the Jaywick Family project (principally involving Essex County Council and Barnardos ). Essex’s partner-funded Drug and Alcohol Action Team has also commissioned effective interventions using models of integrated family support. Our current approach has evolved in part from learning gained through local ‘ EssexFamily ’ prototype projects developed under the Families with Complex Needs Community Budget pilot announced in 2010.

The WECB programme provides a vehicle through which partners can drive cultural change. This change is necessary to support a whole family-centred approach, to empower families to make changes and thus improve outcomes, build resilience and reduce dependency. The programme has encouraged innovation at the front-line – creating new generic family worker roles and blurring professional boundaries. The outcome of the community budgets approach will be a sustainable model of support that reduces the need for high cost reactive services. Our work will deliver £29m in net cashable benefits by 2020.

2. How can the success of Community Budgets (for troubled families, total place and neighbourhoods) be measured, and what are the prospects for models of Payment by Results

Measuring success

Community Budgets are about delivering sustained system change, improving outcomes for citizens and communities, and reducing the financial pressures facing local public services. Judgements on the success of the Community Budgets approach should therefore reflect:

· the extent to which it secures the outcomes desired by citizens and communities; and

· the extent to which it reduces financial pressure across the system of local public services (either through cost reduction or demand management).

But Community Budgets are an emergent model for partnership working. They have been established to tackle some of the most complex and intractable social issues facing our communities – issues which have historically cut across or fallen between established services. Although partners are making good progress across pilot areas, a step-change in outcomes cannot be secured in the short-term. The same is true of efforts to reduce cost pressures. The complexity of local services, different partners’ funding and contractual arrangements, accountability structures and incentive structures mean that work to substantially reshape local spending may take many years.

With this in mind, short-medium term judgements on the success of the community budgets model should focus on factors that signal the potential for longer-term success. Such factors include:

· the extent to which local partners buy-in to the Community Budgets approach;

· the scale of potential benefits identified in partners’ proposals; and

· increased integration in partners’ commissioning activity, operational delivery and resource allocation decisions.

Payment by Results

Essex partners support the use of payment-by-results ( PbR ) mechanisms and, building on the launch of the first local authority Social Impact Bond in ECC, are exploring areas where PbR can be used to support commissioning and to attract social investment into preventive services. Through this work, local partners have identified that PbR works best when:

· the outcomes are clear, specific and easy to measure and track – if these conditions are not met, PbR frameworks can distort delivery incentives; and

· it is used to govern relationships with delivery partners rather than partners within the public services.

This complexity of the outcomes sought through Community Budgets programmes, particularly for families with complex needs, presents a challenge for rolling-out PbR between central and local partners. While there is likely to be scope for PbR in areas where outcomes are clearly defined and easily measurable, the complexity of family needs and circumstances has led to cases where the PbR framework risks distorting local work with families. For example, by:

· reducing the financial incentive partners have to support improvement in all families. DCLG will make ‘results payments’ in respect of specific thresholds only (e.g. each child in the family less than 15% of unauthorised absences), this could reduce the incentive that partners have to support families who may fall short of this level.

· encouraging local partners to focus on worklessness above all other outcomes. DCLG will make ‘results payments’ if partners succeed in supporting at least one adult in the family moving off out-of-work benefits into continuous employment regardless of other outcomes. In contrast to the ethos of the Essex Family Solutions project, this could encourage a narrow focus on worklessness rather than on the wider needs of the family.

The challenges reflect public sector partners’ approach to risk management as much as the design of the PbR framework itself. The element of ‘risk transfer’ inherent in PbR may lead to local public sector partners:

· building financial reserves to hedge against the risk that they do not secure sufficient results payments to sustain their work. Money in reserves cannot be used to finance wider services;

· diverting investment from wider preventative programmes to pursue results payments offered through the Troubles Families programme; and

· disinvesting in family support – as the local performance risk increases, wider partners may be less willing to provide financial and in-kind support to work with troubled families.

However, local partners are keen to use PbR as a tool for commissioning effective public services. PbR arrangements, particularly when focussed on preventative interventions, have a key role to play in attracting new investment into the public services. Local partners believe they have a key role to play in the future of the Whole Place model and are engaged in work to develop our own PbR to attract social investment into local programmes focused on Drug Recovery, Alcohol abuse and preventing acute health and care need.

3. As a result of Community Budgets, how are, and will, Whitehall’s relationship with localities operate and be changed?

The process of co-design and co-production undertaken by local partners and central government through the WECB provides a promising model for efficient and effective policy development and delivery. However, there are few clear signs to suggest that the fundamental relationship between central government and localities has changed significantly as a result of community budgets. Partners’ experience of the WECB programme suggests that the freedom to innovate locally can be crowded-out by Departmental interests keen to protect the status quo and retain their current delivery programmes or operating practices. Perhaps the clearest examples of this concerns local partners’ work on skills and economic growth.

Skills : through the process of co-design Essex partners developed a series of ambitious proposals to reshape skills provision for 16-24 year olds within the county. These proposals would give a greater role to local employers and commissioners ensuring that local skills provision better reflects the needs of local business today and in the future. Our proposals are consistent with national skills policy, have been co-designed with Whitehall secondees and shaped to reflect guidance received from senior officials within DfE and BIS. However, since formally submitting these proposals to government, we have been told by officials that these cannot be advanced. The responsible government agency has argued that government policy is being delivered through its own established delivery approach and that local proposals need to be consistent with this. It appears to local partners that institutional interests have crowded out space for local innovation. To prevent this happening in the future, government sponsorship of community budget projects should be complemented by:

a. greater transparency over policy – particularly in areas where policy is so closely linked with delivery practice that any freedom to innovate is removed; and ideally

b. a commitment that national policy frameworks will not extend to prescribe the form taken by local delivery models.

Economic growth : underpinning local partners’ work across the WECB was the recognition that prosperity and a growing economy are vital in improving outcomes and reducing demands for public services. In addition to projects focused on social outcomes, Essex partners developed a set of proposals that would create the conditions to support local economic growth, accelerating the creation of 60,000 new jobs and 40,000 new houses. With encouragement from DCLG we set out a ‘deal for growth’ proposition, structured around a series of commitments from HM Government and local partners, which we expected to take forward through negotiation with senior officials and ministers.

However, since submitting these proposals it has become clear that central government has struggled to engage with our proposals. Because Essex is not a city, it has not been possible to accommodate discussion of the proposed ‘Deal for Growth’ alongside the established city-deals programme and government’s response to the Heseltine review. This is disappointing as announcements made by the Deputy Prime Minister at the launch of the first city-deal suggested such deals "should not be an urban phenomenon" and warned that "we mustn’t end up with two tier decentralisation, where urban areas flourish and rural communities are left behind." Indeed, it is particularly disappointing as these proposals were a product of the WECB - a programme designed to break down the arbitrary barriers in order to improve outcomes for citizens.

4. How are public funds for Community Budgets accounted for, both locally and centrally? 

There is a distinction to be drawn between accounting for:

a. funds provided to support the development of a community budget programme; and

b. funds used to invest in system-change projects and the financial benefits that accrue from this.

In the case of the former, a single organisation is the accountable body for the Community Budget programme. In the case of the WECB this role has been played by Essex County Council. The authority held financial contributions from DCLG in respect of programme support and administration and matched funding provided by the county council. The authority spent these monies on behalf of the group of local partners to ensure that accounting arrangements are clear and transparent.

With regard to funding for system-change projects, partners in Essex have made clear their view that a successful Community Budgets programme does not require the pooling of budgets. Indeed, to construct pooled budgets across an area like Essex would require partners to centralise financial decision-making, undermining their shared commitment to subsidiarity . Rather than focus on pooled budgets, Community Budgets programmes should focus on the pursuit of shared outcomes and on integrated commissioning across partners.

Within the WECB therefore, there is no single pot of shared public funds for which specific accounting arrangements have been designed and developed. Sovereign partners – whether national or local – have maintained responsibility and accountability for their own financial resources. Partners have come together, on a voluntary basis, and embarked on a challenging process to look across established public service boundaries, to develop specific system-change proposals and to try to understand the both the scale and distribution of associated costs (e.g. financial investment requirements) and benefits (e.g. improved service outcomes, financial savings). Based on this cost-benefit analysis, individual partners are taking decisions on whether, and where, they wish to invest. Making progress has been challenging. Without sustained government focus on this way of working there is a risk that, as public spending reduces further, partners at local and national level may struggle to continue to dedicate capacity towards supporting long-term, whole system change rather short-term savings opportunities.

The support provided through the WECB programme has helped to ensure that local cost-benefit analysis is robust and well developed. Assurance mechanisms involving partners at the local level, senior Whitehall Officials and the Technical Advisory Group co-ordinated by HM Treasury were invaluable in ensuring the WECB’s analysis was sufficiently robust to support meaningful decision-making. Indeed, the National Audit Office has recognised that each Whole-Place Community Budget area has "undertaken the kind of robust project design and appraisal that is a necessary first step in testing potentially significant and beneficial changes to how public services are provided." [1]

The National Audit Office has also recognised this approach as pragmatic: "starting with an emphasis on outcomes rather than on structures or pooled budgets appears consistent with a mature approach to managing change and cost reduction." [2] Had the WECB started by trying to change the structures and accountabilities, we would have made little progress on addressing the outcomes that matter most to Essex residents.

5. How can Community Budgets maximise the use of resources through co-design and co-production of integrated services in the face of reducing resource and outdated modes of service provision?

Community Budgets have a key role to play in maximising the use of scarce public resources. Experience gained through the WECB suggests that the Whole Place model is particularly significant in a) promoting ‘system-thinking’ across the public services, and b) embedding an approach to partnership working that can be a catalyst to greater integration of services.

a) T he process of ‘co-design and ‘co-production’ undertaken by local partners and central government through the WECB provides a promising model for efficient and effective policy development and delivery. The process sought to involve the totality of stakeholders and public service bodies, allowing the impacts of proposed changes to be understood across the whole system. This ‘system-thinking’ not only reduced the risk that changes in policy and practice would have adverse, and costly, impacts on other parties; it helped to focus preventative activity on the key issues that underpinned high demand for acute services, and high costs, across the system.

The success of this system-thinking approach is reflected in the WECB’s focus on cross-cutting issues such as community resilience; reoffending, skills development, infrastructure growth and families with complex needs. By promoting focus on cross-cutting, systemic issues, the WECB process allowed partners to explore opportunities for improved service outcomes and financial savings that could not have been considered by individual organisations acting in isolation.

b) The success of the WECB has been underpinned by a new model of collaborative partnership working. In developing system-change proposals, during the pilot phase, partners adopted a programme management methodology, drawing on deep collaboration at all levels:

· programme-level governance was provided by an Executive Board drawn from across local government, police, the NHS, the Voluntary and Community Sector (VCS), Essex Probation Trust;

· workstream oversight was supported by thematic partnerships such as the Health and Wellbeing Boards in Essex, Southend and Thurrock and the Safer Essex Partnership.

· a ‘sounding board’, comprising the full range of stakeholders was frequently assembled to critically appraise and support the development of proposals; and finally

· project teams and project managers were drawn from across public service partners (including the VCS) in Essex and Whitehall.

This deeply collaborative model of partnership working led partners to advance and accelerate programmes of integration that may not have been supported without the WECB approach. This included work to significantly accelerate the integration of Health and Social Care Commissioning, integrate operational activity to support families with complex needs and tackle the issues of domestic abuse.

The success of this model is demonstrated by Essex partners’ ongoing work to embed this model of partnership working into their business as usual activity. A multi-agency ‘Essex Partnership Board’ has been established as a successor to the WECB Executive Board and will – as capacity tied up in existing projects is released – oversee the design, development and implementation of further system-change. The Board reflects the changing partner landscape, including Clinical Commissioning Group leaders and the Essex Police and Crime Commissioner, for example.

6. How can community placed based budgeting strengthen participatory democracy by empowering individuals and communities especially addressing processes of exclusion for specific groups?

The WECB’s principal engagement with communities is through its ‘Strengthening Communities’ workstream. But the core aim of this workstream is not to strengthen participatory democracy – it is to build community resilience as a means to reducing long-term dependency on, and demand for, public services. At this time of retrenchment in public spending and increasing pressure on local services, building resilience and reducing demand is partners’ principal concern.

Nevertheless, this workstream does aim to strengthening local participation and empower individuals, families and local groups to take greater responsibility for, and play a more active role in, their own communities. Key areas of work include:

a) Community Connectors: Local partners are piloting and evaluating the idea of ‘community connectors’ in a small number of locations across Essex. Under this scheme, locally recruited community workers will work within Essex towns and villages to connect people in need with community level provision (reducing subsequent need for acute interventions) and to use assets that exist within the community to enhance community level support. This might mean building relationships between different voluntary groups, providing groups with advice on funding and capacity development and empowering the community sector to be more self-sustaining and less reliant on support from the public services.

b) Targeted Volunteering: Essex partners, including Centres for Voluntary Services, are looking to commission recruitment programmes focused on securing volunteers to support high-cost public services (e.g. reoffending, domestic abuse). This follows the work of Essex’s Drug and Alcohol Action Team to commission services recruiting volunteer mentors to support people struggling with substance misuse, and ongoing work to secure similar support for families with complex needs. In addition to recruiting volunteers to support preventative work, Essex partners are exploring how social media and social marketing can be used to encourage existing and new volunteers to focus on activities that can contribute to long-term reductions in demand for public services.

c) Essex’s Community Resilience Fund: Essex partners are investing in an endowed fund to provide a sustainable source of funding for grass-roots programmes that build community resilience and provide support for people before they need to turn to publicly funded services. We will secure specialist services from a third party to manage and develop the fund, leveraging skills held in the voluntary and community sector to ensure that excluded groups are supported to come forward with ideas for funding support, and that communities are involved in decisions over funding allocations. In seeking third party involvement, local partners hope that the fund can be sustained independently of future public funding decisions (although contributions would be required from public sector partners to build the fund over a ten year period).

7. Is it possible to use Community Budgets to reset relationships between local democratic institutions, agencies and the public?

No. The WECB, was built upon many years of close collaboration and committed partnership working. This is a necessary precondition for a successful community budget approach. Whilst the WECB was a strong catalyst for advancing and accelerating multi-agency, whole system collaboration in Essex, a community budget, in and of itself, may do little to refresh, renew or reset relationships if partners do not already have a shared understanding of local needs and a commitment to securing key cross-cutting outcomes.

8. How can Community Budgets be used as a tool to enhance local health improvement and narrow the health divide?

One of the key themes guiding the WECB has been partners’ desire to promote greater integration across health and social care commissioning. Between January and October 2012, the WECB programme provided a mechanism for accelerating work on this shared ambition. The WECB programme provided a vehicle through which different partners could focus resources, managerial attention and political leadership to advance work on integrated commissioning.

Since October 2012, Essex partners have used the Clinical Commissioning Group Integrated Planning process as the primary vehicle to develop Integrated Commissioning Plans. The fact that these plans are explicitly focused on integrated commissioning, and that their development is overseen by Essex’s Health and Wellbeing Board makes this the best process to set out the detail of partners’ commissioning priorities, the financial challenges of the CCGs, and the impact of those challenges on integration. The progress currently being made through the integrated planning process would not, however have been possible without the focus of partners attention and resources through the WECB programme.

9. What role can Health and Wellbeing Boards play in facilitating Community place based budgeting across all local agencies?

Given their duty to oversee strategic partnership integration in the health and social care sector, there is a clear role that Health and Wellbeing Boards across Essex, Southend and Thurrock can play in embedding the WECB model of partnership working into business as usual activity. Health and Wellbeing Boards can champion integration across the health and social care sector and exert influence over other local partners, encouraging their engagement in system-change projects and work programmes.

However, the Health and Wellbeing Boards cannot play a substantive role in embedding partnership working approaches without the consent, cooperation and support of individual partner organisations. At the basic level, these boards have a legal power to set joint Health and Wellbeing Strategies for their area and to check the alignment of CCGs commissioning plans to this strategy.

Mindful of the potential for integration across the whole public service, Essex partners have sought to establish additional means through which they can embed the WECB partnership model. They have approved the establishment of an Essex Partnership Board (EPB) to provide leadership, and to shape the strategic direction of local public services, holding partners to account where necessary. The EPB will oversee the delivery of existing WECB projects and provide a mechanism to support the identification, development and delivery of further system change activity.

Like the Health and Wellbeing Board, the EPB will remain dependent on the support and consent of sovereign partners. It will, however, have a broader remit to champion integration projects across the full range of public services, developing ideas for whole-system change that extend beyond the health and social care sector.

April 2013