Total Place budgeting set for starring role in Spending Review

22 Sep 10
A decisive shift towards Total Place-style budgeting is widely expected to be included in next month’s Comprehensive Spending Review, Public Finance has learned.
By David Williams in Liverpool

23 September 2010

A decisive shift towards Total Place-style budgeting is widely expected to be included in next month’s Comprehensive Spending Review, Public Finance has learned.

Remarks made by the chief secretary to the Treasury at the Liberal Democrat conference in Liverpool this week suggested that joined-up budgeting is at the forefront of ministers’ minds as they prepare for the October 20 CSR.

During a fringe meeting on September 21, Danny Alexander said the single greatest source of waste in the public sector came from duplication between agencies at a local level.

‘One of the best things we can do is break down barriers between departments, between different levels of government, get budgeting done locally at a place-based level, give someone responsibility for sorting out their problems, and let them get on and do it,’ he said.

‘We’ll save money, and people will be better supported.’

The following day, Alexander, together with Norman Lamb, chief political advisor to Deputy Prime Minister Nick Clegg, visited a Total Place-style scheme in Toxteth, Liverpool.

Speaking to PF after the visit, Lamb praised the project, in which bodies including the police, the NHS, housing associations and Liverpool City Council share resources to tackle complex problems such as long-term worklessness.

But he launched a stinging attack on the Department for Work and Pensions for not getting involved.
Lamb told PF: ‘The one frustration for me is that you have all these agencies working together to improve an area, but the one agency that is not involved, that is spending more money than any other, is the DWP. There is a vast amount being spent by DWP, but in a way that imprisons people in dependency.’ He argued that involving welfare and benefits money was essential to ensure that most value was extracted from public spending.

Lamb said: ‘[On the visit] we saw what had been achieved at a local level – we also saw that the DWP as it currently works has nothing to bring to the table because it has no flexibility. ‘It hasn’t really changed since the welfare state was constructed.’

Rob Whiteman, managing director of the Local Government Improvement and Development agency, confirmed that discussions around joined-up budgeting were gathering pace. He said the Treasury had been in contact with the Local Government Association ahead of the CSR.

‘It’s clear that the chief secretary and the chancellor are very interested in this – the Treasury has gone up a gear in terms of promoting these discussions with departments,’ he said.

Whiteman agreed that the DWP was ‘less advanced on localism’, but predicted: ‘We’re not expecting a big bang to happen in one go on October 20, but we are expecting some genuine progress in terms of flexibility over funding.’

James Hulme, communications director of the New Local Government Network, said it was ‘encouraging’ that a Treasury minister was making the case for place-based budgets.
‘Traditionally, the Treasury has been less receptive to those kinds of initiatives because they tend to end up weakening their influence over spending.’

Andy Sawford, director of the Local Government Information Unit, said: ‘If the Treasury is serious about Total Place, the DWP has to be in there – but we shouldn’t underestimate how strongly Whitehall departments will protect their turf.’

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