Deputy Prime Minister unveils major rollout of community budgets
At least 110 local authorities will be allowed over the next two years to use community budgets to deal with families with multiple problems, the Deputy Prime Minister has announced.
Speaking at the Local Government Association conference, Nick Clegg claimed that up to 120,000 families would see a significant improvement in services as a result. The move follows the success of 16 pilot areas, he said.
The Deputy Prime Minister called on councils to sign up to the scheme. Around 50 councils will get community budgets this year, followed by at least a further 60 in 2012/13.
The Department for Communities and Local Government said families with multiple problems accounted for less than 1% of the population, but were seen by as many as 20 different public and voluntary sector professionals at a cost of £4bn a year.
It cited the case of one Salford family that required “250 interventions in one year including 58 police call-outs and five arrests; five 999 visits to Accident and Emergency; two injunctions; and a Council Tax arrears summons”.
Putting in place a community budget saw the £200,000 cost being cut by two thirds, the DCLG said.
Nick Clegg also announced at the LGA conference that four new community budgets pilots would be launched “to explore how communities can have greater control over services through a single budget from Whitehall, as part the government's review into local government finances”.
Two areas will be selected to help co-design neighbourhood level community budgets, “giving residents the opportunity to say what services they want, how they should work and whether they want to run them”.
Another two will be selected to help co-design a community budget bringing all funding on local public services from the area “into a single pot to test how to create the right local financial set up to deliver better services that people want”.
The Deputy Prime Minister said: "In terms of real decentralisation, money talks. We need to reverse decades of centralisation to make our communities masters of their own economic destinies. We have to create the conditions for communities to invest in their own success. That means putting our money where our mouth is to give local authorities proper power over spending as well as more control over the taxes raised and keep so, for example, they can fight to attract businesses to come to their area.
"We will also be putting community budgets at the heart of how we deliver services. There are families that have been let down by the system. Their complex problems mean they can end up seeing dozens of professionals across public services - but those professionals aren't always joined up, making it near impossible for anyone to get an overall picture of what that family needs. Community budgets are budgeting for real life, breaking down the barriers between different parts of the machine, and treating people with troubles like human beings, not figures on a spreadsheet."
Clegg also revealed that the DCLG would introduce a Local Government Finance Bill handing councils the freedom to borrow against business rates, known as Tax Increment Financing, and to retain business rates.
The first phase of the Local Government Resource Review is considering options to enable councils to retain locally raised business rates. It is expected to report in the summer. A second phase set out by the DCLG deals with community budgets and starts this week.
Communities Secretary Eric Pickles said: "It makes no sense that 120,000 families cost the country £4bn because inefficient public services are duplicating work. Community budgets will radically change that by giving local councils and communities control over how public money spent in their area is used.
"We are extending the reach of community budgets so that more local services across the country work in partnership to knock back the bureaucratic processes that box them into working alone."
The government said nine centres or 'Dissemination Hubs' would be based within local authorities around the country to provide practical support to neighbouring areas in developing services for families with multiple problems.
“Whitehall officials will be assigned to help areas 'bust' financial and legal barriers to achieving local ambitions by pooling budgets, changing working practices and investing in service reorganisation,” it said.
Sir Merrick Cockell, LGA Chairman, said giving local areas greater control over the delivery of services to families with complex needs saved money and improved lives.
“Momentum is building behind this approach,” he suggested. “Pilot councils have demonstrated that it can work and with the extension of the scheme we are very confident that more will match and even exceed early successes.
“We do need much greater buy-in from all government departments if the next round of councils are to more easily overcome some of the hurdles which stand in the way of the huge savings and greater local accountability this approach can deliver. We estimate up to £100bn in taxpayers’ money could be saved over the life of the current parliament if place-based budgets were introduced everywhere.
“The LGA will work with councils to maintain momentum within the sector and with government departments to ensure they continue to devolve budgetary control in a way which promotes true localism.”
A recent report by the CLG select committee said there was “palpable enthusiasm” for community budgets in the DCLG and praised the Department for Health for its enthusiasm.
However, the MPs warned that ministers in the Home Office and the Department for Work and Pensions gave the impression of being barely aware of how they might contribute to such an initiative. As a result there was a risk of the concept becoming a damp squib, they said.
Philip Hoult
