Community Budgets ‘show potential for pooled spending’

12 Mar 13
The four ‘whole place’ Community Budget pilots in England show that integrated spending could lead to cheaper and better services, the National Audit Office said today.

By Richard Johnstone | 13 March 2013

The four ‘whole place’ Community Budget pilots in England show that integrated spending could lead to cheaper and better services, the National Audit Office said today.

Manchester

A case study of the pilots was included in the watchdog’s wider review of merged budgets, Integration across government, published today. The Community Budget areas – Cheshire West & Chester council, the Greater Manchester combined authority, the west London tri-borough project and Essex – worked with Whitehall to develop business plans to merge all public spending streams. These were submitted to government last October and ministers are currently considering whether to approve them.

 Auditors said the four pilots had been ‘a positive first step in assessing the case for integration’ of public spending. Each area had set out how services could be improved by pooling various sources of central government funding into a single local spending pot.

Greater Manchester’s business plan covered areas such as health and social care, justice, early intervention and economic development. It estimated net savings of £270m over five years could be achieved. The Cheshire West & Chester scheme predicted savings of £56m in the same period, while the Whole Essex proposal said there would be £414m in ‘net benefits’ from the plan over six years. The three London boroughs, Hammersmith & Fulham, Westminster and Kensington & Chelsea, anticipated £70m of net savings annually once the plan was up and running.

Case study on integration concluded that, although the success of the approach would become clear only once it was implemented, the areas had worked together to build the case for local service reforms.

Continuing collaboration between both central and local government would also be ‘essential’ to maximise the potential if the pooling agreements go ahead.

Auditor general Amyas Morse said it was important that departments made ‘the most of the potential of integrating frontline services and back-office functions’.

The Community Budget concept, like the last government’s Total Place initiative, aimed to use funding flexibly to meet local needs, he added.

‘The difference this time is that government is trialling this method properly. We encourage government to continue to work closely with local areas to understand fully what works and what doesn’t.’‘The difference this time is that government is trialling this method properly. We encourage government to continue to work closely with local areas to understand fully what works and what doesn’t.’

Responding to the report, local government minister Brandon Lewis said he was ‘delighted the NAO has recognised the positive and effective contribution of whole place Community Budgets’.

He called on councils around the country to examine the work done by the pilots and use this information to ‘transform’ their own local services.
‘This government is radically devolving power to local areas, to make them more open and responsive to solving local problems,’ he added.

‘Our pioneering whole place Community Budgets pilots are leading the revolution in developing integrated services that are better able to meet local peoples' needs whilst at the same time saving hundreds of millions of taxpayers’ money.’

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