Pilot projects float a new approach to area spending

2 Sep 09
The government’s Total Place programme has a lot riding on it. But will scrutinising all public money spent in a location really lead to better but cheaper ways of providing services?
By Vivienne Russell

2 Sept 2009

The government’s Total Place programme has a lot riding on it. But will scrutinising all public money spent in a location really lead to better but cheaper ways of providing services?

In Birmingham, they’ve been snorkelling. In Croydon, it’s been deep-diving. This is not how the council chief executives have been spending their summer holidays, but rather what’s been going on as part of the Total Place pilot programme.

The marine-based jargon has grown up around the flagship £5m programme, and attempts to describe how the 13 participating areas are reassessing the services they provide.

Total Place is an ambitious programme that is taking a fresh look at the totality of public money being spent in a local area, from the council and NHS through to policing and JobcentrePlus. It aims to look at what might be done differently and what savings could be made.

Next month, some of its early conclusions will be fed back to the Treasury to inform the Pre-Budget Report. By early next year some more concrete solutions will have emerged to influence the Budget and the next spending round.

The backdrop to the process is the recession and the tough future ahead for the public sector. It is hoped Total Place will help provide better, smarter, more targeted services for less money.

The initiative received the seal of approval from Sir Michael Bichard, director of the Institute for Government,  in his report for the Treasury’s Operational Efficiency Programme. The pilot is under way as a direct consequence of his recommendation, although some local authorities claim they were already thinking along the same lines.

John Atkinson, managing director of the Local Government Association’s Leadership Centre, is co-ordinating the programme nationally. ‘We’re facing a term where the financial pressure is going to be considerable for a long period,’ he tells Public Finance. ‘We’re going to have to start thinking very differently about some of the things we do.’

He sets out three ‘Cs’ – the customer: approaching services from the user’s perspective; count: how much money is spent; and culture:  how things are done.

A lot is resting on Total Place, and Atkinson warns that it is not a panacea. ‘The slight paucity of thought about how things might be done differently means that initiatives like this get a lot of attention. But it maybe offers us quite innovative potential for working with some issues that take place in our towns, cities and counties in a very different way.’

The process has certainly enthused public sector leaders. Jon Rouse, chief executive of the London Borough of Croydon – one of the 13 pilot areas – is excited about the programme’s potential.

‘To have a quarter of a million pounds from the government to spend on thinking big things – but with the imperative of knowing we have to reduce our expenditure by 2011 – is a really positive opportunity,’ he says. ‘People say that in the midst of a recession you often get more innovation, not less, because needs must. I don’t think it’s any different in the public sector. You get big leaps of productivity when the chips are down.’

In Croydon, two parallel processes are in train: counting all the money that comes into the borough and a thematic ‘deep dive’. The latter is looking at children’s services, particularly the economic and social gains that can be made by focusing more on early intervention.

Rouse points out that far more money is spent on children as they progress through adolescence than in their first five years of life. This flies in the face of evidence showing that early, targeted interventions can reap a big dividend in terms of preventing social and criminal problems further down the line.

Shared initiatives such as Sure Start children’s centres have concentrated more on institutional structures, he says. But the flow of money through the different services, from midwifery and health visiting to working tax credits, can make a difference in supporting vulnerable families.

‘The idea is to look at the whole range of expenditure input to say: “Is there a better way of organising these, so they are targeted effectively through some sort of predictive methodology on families likely to have most need?”,’ Rouse adds.

A hundred and fifty miles to the north, is Stephen Hughes, Rouse’s counterpart at Birmingham City Council, which is also taking part in the pilot. The authority – England’s largest – was already working out how much public money was spent on the city before Bichard and the OEP reported. That piece of work is now complete, finding that £7.5bn is spent on a population of just over 1 million people.

Birmingham is taking a broader look at how services could change. Like Croydon, there’s an emphasis on early intervention, but the authority is also looking at joint commissioning for mental health and learning disability services, and for tackling guns and gangs, and drug and alcohol abuse. It is also selecting a small area of 1,000 households to see if there are ways to change the way money gets spent on them and how services interact.

Hughes tells PF that he is looking for evidence on how investing money in one public service might take pressure off the budget of another. ‘Public agencies depend on each other for their cost base and therefore we have a mutual interest in designing our services in such a way that we minimise our costs overall and maximise our outcomes,’ he says.

‘We’re [going to be] in a period in two years time where public finances are going to become scarce, and the alternative to a kind of collaborative approach to managing finances is going to be one of service cutting and cost shunting, which we’ve seen before and which will be a setback for everybody.’

But not everyone is convinced. Chris Leslie, director of the New Local Government Network think-tank, says the programme is ‘good as far as it goes’ and likely to reveal some interesting factoids about local spending patterns. But he questions whether what it reveals will change anything.
‘When you learn that a third of spending is on welfare benefits, are you seriously going to talk about reducing people’s benefits in order to prioritise capital investment or something?’ he asks.

‘Over the past 200 years of public administration people have had various different ways of zero-based budgeting or trying to get back and challenge core assumptions. I see Total Place as part of that general yearning to start afresh and squeeze a whole lot of efficiencies out.’
Portfolio holders will defend their turf, he predicts. ‘You can’t just iron away the politics and the policy issues.’

Rouse counters by saying that the big decisions on resource allocation are taken at a level that local government and its partners cannot control and flow in from a range of different spending departments. ‘It’s not like we’re scrapping over the same pie,’ he says. ‘What we’re trying to do is make sense of our individual resource allocations on the ground. We all have an interest in getting the biggest bang for our buck in terms of performance outcomes.’

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