Announcement

14 areas to pioneer scheme to 'pool and save' billions

Fourteen areas are to pioneer a public service revolution that will slash financial red tape and duplication so they respond to local need and…

Fourteen areas are to pioneer a public service revolution that will slash financial red tape and duplication so they respond to local need and save taxpayers’ millions, Local Government Secretary Eric Pickles announced today.

The revolutionary funding strategy known as ‘Community Budgets’ will let councils, boroughs or neighbourhoods team up with all public services in their patch to combine resources into a single locally coordinated ‘pool and save’ pot with greater local control of improved services for local people.

Early research showed that a saving of as little as a two percent equates to over £1bn and this approach has the potential to save up to twenty per cent in some areas.

Mr Pickles is clear the scale of public deficit means the country can no longer afford to leave public service investment in uncoordinated Whitehall silos. He believes this ‘silo control’ has created unequal access to services that are inefficient and unnecessarily expensive.

By removing Central Government mandates over how public money is spent locally and giving local professionals the power to combine budgets and coordinate local services using the best local intelligence, large swathes of red tape can be slashed and millions of pounds can be saved.

Four showcase areas, twice as many as first planned, have been selected today to run a Community Budget next year focusing on ‘ways to create local growth and reduce dependency on the state’. Billions could be shifted into single budget pots to test how a local set up could deliver more efficient services.

  • Cheshire West and Chester will look at how to pool a single budget of between £3-4bn from over 150 local services;
  • Greater Manchester aims to use joined up local investment to reduce levels of dependency and to help create 50,000 jobs in the next four years;
  • West London will focus on skills and training for over 16s, speeding up family courts, and curbing youth violence and anti-social behaviour;
  • Essex will pull together a single set of objectives for the £10.4 billion they spend on public services so it is used more effectively and efficiently.

Eric Pickles said:

We can no longer afford the luxury which left public investment idling to no purpose. We need a gear change that makes ‘silo control’ obsolete and starts a local service revolution that puts people at the heart of spending decisions and saves money.

We’re setting up more Community Budgets than originally intended -these ‘pool and save’ pioneers can bring about truly local services with one big local cheque that knocks out bureaucratic processes everywhere and upends Whitehall’s monopoly over public money that’s hemmed in frontline workers for decades.

The intention to select Community budget pilots was first announced by the Deputy Prime Minister in June as the second part of a major ‘resource review’ to overhaul council funding and boost local finances. Earlier this week plans were set out, alongside a new Local Government Finance Bill, to let councils keep a share of the business rates they collect rather than returning it to Whitehall.

Deputy Prime Minister, Nick Clegg said:

The government is overseeing a fundamental shift in the way Whitehall works - putting power firmly in the hands of local people.

Community budgets will give professionals the clout to control how money is spent in their communities.

They will put local authorities in the driving seat to deliver better services, cut red tape and save millions of pounds of taxpayers’ money.

The pilots will create a joint team with local partners, aided by Government officials and the Local Government Association, to establish their devolved budget proposals with decision making structures for a locally run operation during 2012. This will help achieve significant public sector savings, cut red tape and improve policy making.

Ten ‘neighbourhood level’ areas have also been selected to develop smaller scale Community Budgets that will give residents a micro-local level say over the services they want and use. The local community will play a leading role, working with councils and professionals, to shape local services so they work from a customer’s perspective.

A package of support will be agreed with each of the following ten pilot areas:

Cowgate, Kenton Bar and Montague in Newcastle; White City, Kingston, Poplar, Queens Park in London; Ilfracombe in North Devon; Bradford Trident; Sherwood in Tunbridge Wells; Haverhill; and Castle Vale, Shard End and Balsall Heath in Birmingham.

Steve Wyler, Chief Executive of Locality, said:

We very much welcome this announcement and support government driving budgets down to neighbourhood level. Persistent problems which afflict communities can be addressed by putting an end to the bureaucratic nonsense of spending silos so that local people, with all their local insights, can be in the driving seat.  We hope that this approach will be rolled out quickly across the whole country.

Notes to editor

  1. More details on the four ‘Whole-Place’ Community Budget Pilot plans:
  • Greater Manchester aims to use joint investment from a range of partners to reduce levels of dependency and support growth critical to creating 56,000 private sector jobs over the next four years. They will use local evidence to decide how best to address cross cutting priorities like unemployment, low skills and dependency to support early intervention. This will result in a greater efficiency and public spending savings.
  • Cheshire West and Chester plan to review over 150 local services that have the potential to pool a single budget of £3-4 billion. They will make neighbourhoods safer and cleaner. Create new opportunities for jobs and learning as part of a ‘better deal’ for unemployed people. A first class children’s centre will be at the heart of the community plus help for older residents to lead independent lives.
  • West London - Hammersmith & Fulham, Kensington & Chelsea, and Westminster - have put together a ‘Tri-Government Guarantee’, setting out their targets these include making sure every young person under 25 has a job or is in training or education; 80 per cert of children across the three boroughs achieve five A*-C grade GCSEs; access to high-quality affordable housing. The pilot will involve radically redesigning services and aligning funding in a number of key areas over the next 12 months.
  • Essex will encourage residents to play a greater role in their community and in helping to shape good value public services. Any savings delivered could be reinvested back into prevention and early intervention, not handed back to the Treasury. Local priorities include health and social care, skills for young people, economic growth and community safety.
  1. More details on the Neighbourhood level Community Budget Plans:
  • Hammersmith & Fulham (White City) want to integrate neighbourhood service budgets including welfare, crime, social care and ‘clean/green’.
  • Tower Hamlets (Poplar Harca) want their neighbourhood services to include support for local enterprise with more spent on services than bureaucracy.
  • Bradford Trident will co-commission parish functions, health and unemployment services with youth and sports centres run by a social enterprise.
  • Tunbridge Wells (Sherwood) aims to devolve all appropriate service funding to the neighbourhood.
  • Kingston (Norbiton) will extend Local Integrated Services to all neighbourhood funds looking at housing, policing and community engagement.
  • Haverhill will devolve a pooled budget to the ‘One Haverhill’ partnership. This will embed local knowledge and community influence over services.
  • Birmingham (Balshall Heath, Shard End, Castle Vale) want the pilots to become a catalyst for more pooled budgets focused on prevention. Balsall Heath Forum and Shard End will be community led approaches while Castle Vale Community Partnership will be housing association led.
  • Westminster (Queens Park) will create a Recovery and Early Action Partnership to bring all relevant services and residents in the neighbourhood together to focus on families at risk.
  • Ilfracombe (North Devon DC) will create shadow accounts in “Virtual bank” as the first step to co-commissioning, before moving to budgetary control. It will look at neighbourhood services, libraries and highways.
  • Newcastle (Cowgate, Kenton Bar, Montague) will broker agreements so ward committees can invest in family-support services delivered by a community enterprise.
  1. A Challenge and Learning Network will be set up to share learning from the pilots with other areas. The Network will help drive the Community Budget agenda forward helping make sure they are ambitious, sustainable and capable of being replicated elsewhere. Fourteen councils will sit on the network: Birmingham; Blackburn with Darwen Borough; Cornwall; Durham; Hertfordshire; Lincolnshire; Greenwich; Harrow; Sheffield; Shropshire; Sunderland City; Swindon; Wiltshire; and Worcestershire.

  2. A Community Budgets Prospectus was issued on 17 October 2011 inviting councils to submit expressions of interest to pilot Community Budgets across the whole of a local authority area and also at a neighbourhood level. It set out how pilots would be shortlisted, then selected and includes details of the offer made to pilots: www.communities.gov.uk/publications/localgovernment/communitybudgetspropspectus.

  3. Community Budgets were announced as part of the Spending Review 2010 (see www.communities.gov.uk/news/newsroom/1748116).

  4. Detail of the Local Government Resource Review Terms of Reference (phase two: Community Budgets) are available at: www.communities.gov.uk/documents/localgovernment/pdf/1933423.pdf (PDF, 43 kb).

  5. Locality is a leading network of over 650 community-led organizations. It helps local people to set up and run local organisations for the benefit of their communities.

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