Council borrowing to be reviewed under transformation plans

16 Mar 15

Rules governing council borrowing could be loosened in the next parliament as part of moves to improve the integration of public services, ministers have indicated.

Setting out the government’s response to the Service Transformation Challenge Panel report today, Eric Pickles and Danny Alexander said they wanted the principles of the Troubled Families Programme to be applied to more areas of provision.

The challenge panel was asked to identify barriers to better joined-up public spending in local areas. It called for councils to be able to borrow from the Public Works Loan Board to fund revenue spending on projects to integrate services.

Publishing its report last November, panel co-chair Sir Derek Myers said a £400m annual borrowing flexibility should form part of a £5bn investment over the five years to 2020 to redesign local services around the needs of individuals and families. This would also include a £200m annual allocation for capital receipts to be used for revenue spending, and integration of existing Whitehall transformation funds into one £400m pot.

In a formal response to the call for additional borrowing powers, ministers set out plans for a review of transformation funding in the next parliament.

‘[The] government will work with local places and sector experts to examine how funding for transformation can be improved in the next parliament – considering, for example, simplification in the transformation grants available, the benefits of capitalisation and borrowing powers, and the role of social investment,’ the report stated.

Pickles said the Troubled Families scheme had shown how joining up local services can save money and improve people’s lives.

Figures released last week showed that more than 105,000 families had been helped by the scheme, which would save taxpayers an estimated £1.2bn, he highlighted.

‘The panel have given us a blueprint for better services in the years ahead, with plans that put people first by joining up what they do around the user. That’s an approach that gets better results and costs less too and I’m pleased that we are now pushing it forward.’

Accepting other recommendations from the panel, ministers said they would also work to identify the total cost of providing support to individuals and families with multiple complex needs to inform the next spending review.
An additional £5m of funding has been granted to allow the Public Service Transformation Network to work with more areas and to ensure best practice is used more effectively by local commissioners.

Alexander also said the success of the Troubled Families programme was proof better services could be provided even amid funding reductions.
‘We know there are other areas where money is wasted and vulnerable people don’t get the support they need,’ he added.

‘That’s why I’m delighted that the challenge panel has laid out the next steps for transforming local public services to deliver better results for the most vulnerable people. I look forward to seeing the principles underpinning this life-changing programme extended across public services in the future.’

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