Select committee inquiry
Community Budgets
Closed
What the inquiry looked at
“The Communities and Local Government Committee has been investigating Community Budgets (for troubled families, total place and neighbourhoods). It had previously carried out a preliminary in 2012: Taking forward Community Budgets . This inquiry followed on from this to see how Community Budgets are developing.”
The committee's words, from the inquiry page on parliament.uk ↗.
What the government said
The government responded on 28 January 2014.
Summary written by Accountability Index from the government's response.
The Government agrees with the Committee's central findings on Community Budgets and points to existing and announced measures, mainly the Public Service Transformation Network, the Better Care Fund and a Troubled Families expansion, rather than making new commitments of its own.
- The Government agrees that success "should be judged primarily in terms of improved outcomes for service users", adding that "Value for money for the taxpayer is also an important consideration".
- On named departmental contacts, it describes Account Managers for each place working with the Transformation Network and a named contact for the other 30 or so interested places, rather than naming a senior official in each department.
- On data sharing, it notes the Cabinet Office "is exploring options for legislation" and that a Centre of Excellence for information sharing is being set up.
- On funding certainty, it says the Treasury "will work with departments to give local public services the same long-term indicative budgets as departments from the next Spending Review". On financial accountability, it keeps the current system "under review".
Read the government's response ↗ Read the report ↗ Report an error
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 4 March 2013 to its close on 26 March 2015.
- Report 23 Oct 2013
- Government response 28 Jan 2014
- Correspondence 15 May 2014
What it recommended 6 recommendations · 25 conclusions
1A strong case that Community Budgets can deliver substantial savings is emerging, though the scale...
Concluded (the committee's words)
A strong case that Community Budgets can deliver substantial savings is emerging, though the scale of those savings will depend on the initiative gaining national momentum. The necessity for savings has not, however, driven out other objectives. We welcome the outcome-based approach to Community Budgets which, built on increased integration and local independence, should decrease service demand, dependency and cost through prevention and early intervention. The outcome of the pilots and the future roll-out of Community Budgets should be judged primarily in terms of improved outcomes for service users.
2The secondment of Whitehall officials to pilots has been particularly important, largely as a way...
Concluded (the committee's words)
The secondment of Whitehall officials to pilots has been particularly important, largely as a way of bringing about cultural changes in both local and central government. It would be unrealistic to expect central government departments to provide high-level secondees to all community budget areas. However, their deployment should be encouraged where possible—for example, with further pilots. At minimum we consider that all areas wishing to develop Community Budgets should be matched with a named senior official within each department who would be responsible for coordinating co-production arrangements with their department and for providing support and guidance to the local authority.
3The Government must continue to send the clear message to all local authorities that it...
Recommended (the committee's words)
The Government must continue to send the clear message to all local authorities that it will support every authority wishing to introduce Community Budgets, and set out what support it will provide. Local authorities should not be held back or discouraged from going ahead with Community Budgets in their area because they are not part of a pilot scheme or knowledge sharing network.
4We were encouraged to hear of the progress being made towards joint working between some...
Recommended (the committee's words)
We were encouraged to hear of the progress being made towards joint working between some central departments and pilot areas, in particular by the Department of Health. It is clear that embedding joint working between local areas and central departments will not happen immediately. However, we expect further significant progress by central government towards this end over the next six months. The Government should also ensure that Neighbourhood Community Budget are not left out of the process of developing new joint working arrangements because of their smaller scale.
5The Government must be willing to promote cooperation with Community Budgets within its own central...
Recommended (the committee's words)
The Government must be willing to promote cooperation with Community Budgets within its own central departments and to ensure that the responsibility for promoting and shaping the Community Budgets initiative is not restricted to the Department for Communities and Local Government. We recommend that, when local authorities report problems with departments, there must be clear arrangements in place to resolve those problems. We recommend that, to facilitate this, a named official within each 40 Conclusions and recommendations department should serve as liaison with Community Budget areas. Ideally this named official should also have the opportunity to work on secondment with areas operating Community Budgets as this would help to break down communication barriers.
6Building strong local leadership and developing working partnerships based on mutual trust clearly will not...
Concluded (the committee's words)
Building strong local leadership and developing working partnerships based on mutual trust clearly will not be achieved overnight. Co-production has presented some challenges for central government in that it requires central departments to alter the way they operate and behave and release some control over service delivery. However, both Whole Place Community Budgets and Neighbourhood Community Budgets provide a catalyst for the development of better working relationships by providing a real financial incentive for co-design and co-production of services.
7Community Budgets present an opportunity to share best practice for engagement across government.
Concluded (the committee's words)
Community Budgets present an opportunity to share best practice for engagement across government. Engaging local communities with the way in which their services are delivered will be an important way of enabling them to identify and co-produce solutions to local problems and of kindling a clearer sense of place-based ‘ownership’ of public services.
8Local services need to be designed around local needs, in order to improve outcomes and...
Concluded (the committee's words)
Local services need to be designed around local needs, in order to improve outcomes and reduce demand, but direct democratic engagement is likely to require additional resources. Neighbourhood Community Budgets (NCBs) in particular will need to be properly resourced so that they can facilitate community involvement. Whole Place Community Budgets have less scope than NCBs to involve residents directly in decisions about the delivery and structure of services. However, both can improve local accountability for service delivery by encouraging locally elected Members to become involved in the design and delivery of Community Budgets. An example of good practice we highlighted in our “Councillors on the frontline” report was the community leadership programme developed by Sunderland City Council.
9Community Budgets have the potential to promote economic growth.
Concluded (the committee's words)
Community Budgets have the potential to promote economic growth. We are disappointed therefore to hear that the Essex Whole Place Community Budget pilot experienced problems gaining the agreement of the Department for Business Innovation and Skills (BIS) for some of its proposals. Barriers between the City Deal programme and locally developed growth plans are artificial and unnecessary. Central departments have to avoid perpetuating existing silo mentalities within Community Budgets. If communities are to reach their full potential to generate growth as well as improve services and produce savings, integration will have to go beyond those departments which have responsibilities for social matters and the involvement of BIS will be key to this. It is also important that the support available Conclusions and recommendations 41 from the Department for Communities and Local Government and across central government for locally driven growth is not focused purely on urban areas, for example, through the City Deal programme.
10We welcome the creation of the Single Local Growth Fund (SLGF) but it is important...
Concluded (the committee's words)
We welcome the creation of the Single Local Growth Fund (SLGF) but it is important that its use is left to the discretion of local areas to allow them to integrate SLGF and community budget based projects.
11There is a clear need for those in the health sector to move away from...
Concluded (the committee's words)
There is a clear need for those in the health sector to move away from using a deficit model of health and to focus investment on reducing reactive spending. It makes sense for health budgets to contribute towards improving health, social care and other services where that investment has the potential to reduce the demand on national health services. In this area the ability of Community Budgets to demonstrate the positive impact of such an investment will be key to persuading health bodies to use some of their budgets to address the wider social determinants of health.
12We conclude that Health and Wellbeing Boards (HWBs) will play a pivotal role in shaping...
Concluded (the committee's words)
We conclude that Health and Wellbeing Boards (HWBs) will play a pivotal role in shaping spending across the public sector over the coming years. Central government should ensure that they have the flexibility to work with local partners and deliver locally agreed outcomes. This may mean that HWBs decide to spend a portion of their budget on facilities or services that are not directly health related.
13With the recent changes in public health local authorities are able to establish partnerships through...
Concluded (the committee's words)
With the recent changes in public health local authorities are able to establish partnerships through new local public health bodies and develop joint working and collocation arrangements and to encourage pooled budgeting. Now is the time to act. Once the new local health arrangements are fully established it will become more challenging to persuade such bodies to break down emerging silos and invest their budgets in joint initiatives requiring health budgets to be spent on improving health and wellbeing in order, ultimately, to reduce reactive expenditure. Local and central government must communicate to health partners that Community Budgets are ultimately about improving services and by framing joint investment agreements in a way that protects frontline health spending.
14Although they are still at the pilot stage, Community Budgets are already demonstrating the clear...
Concluded (the committee's words)
Although they are still at the pilot stage, Community Budgets are already demonstrating the clear potential for more effective, cheaper, more integrated public services through co-design of services with central government and local partners as well as local partnership working towards delivering agreed work-streams. Achieving their full potential will require strong leadership at a local level as well as a commitment from central government to facilitate local partnerships and the flexibilities they need in order to develop local strategies and solutions to specific local issues.
15Collecting and sharing information will be vital to the success of Community Budgets as without...
Concluded (the committee's words)
Collecting and sharing information will be vital to the success of Community Budgets as without data demonstrating service improvements and better outcomes for service users as well as savings it will be difficult to attract local partners and support from HM Treasury. The collection of accurate and comparable data will require local resources and is also likely to begin well before any savings are realised.
16Local authorities will require access to information, resources and expertise to enable them to collect...
Concluded (the committee's words)
Local authorities will require access to information, resources and expertise to enable them to collect and share data that is comparable with pre-community budget spending. Local areas beyond the current pilots that choose to adopt Community Budgets may require assistance from central government departments in accessing, collating and analysing the data on current public sector spending. Such assistance could, in our view, take the form of guidance, loans of staff to work directly with local areas, or specific financial assistance.
17There is a culture in central and local government that is averse to sharing data...
Recommended (the committee's words)
There is a culture in central and local government that is averse to sharing data which in part may be derived from existing data protection legislation, or perceptions about the legislation. This culture must not be allowed to obstruct the sharing of information needed for the development and operation of Community Budgets. We note the Secretary of State’s view that barriers to data sharing are entirely artificial and not the result of the correct application of the Data Protection Act 1998. However, we recommend that, if methods of sharing data within the requirements of the Data Protection Act 1998 cannot be developed by central government departments working with local authorities, the Government bring forward legislation. We welcome the assurance given to us by the Secretary of State that he will address quickly any problems with data sharing arrangements that emerge. As we discuss elsewhere in our report the role of secondees in breaking down barriers and improving communication between central and local government will be an important part of changing the culture around data sharing.
18Some questions remain about how arrangements to ensure the financial accountability for Community Budgets will...
Concluded (the committee's words)
Some questions remain about how arrangements to ensure the financial accountability for Community Budgets will work in practice, including accountability for spending within pooled budgets. Questions will doubtless be raised about accountability as pilot areas design their own arrangements for agreeing and monitoring spending. More questions about accountability for public money will arise if, as Community Budgets require, central budgets are devolved to, or pooled at, the local level. We have therefore written to the Committee of Public Accounts suggesting that it examine the financial accountability of Community Budgets.
19In the short and medium term progress can be made towards integrating services through Community...
Concluded (the committee's words)
In the short and medium term progress can be made towards integrating services through Community Budgets without the use of pooled budgets but in the longer term they will be needed to complete the process of integration. Negotiations for the creation of pooled budgets should continue locally with the assistance of central departments where necessary.
20A key outcome from the Community Budget pilots will be a solution to the problem...
Concluded (the committee's words)
A key outcome from the Community Budget pilots will be a solution to the problem of what to do when one partner invests to the direct benefit of another agency. It may take some time before pooled budgets are used widely and a single ‘invest to share’ model may not be universally applicable. It is therefore essential that local authorities in Community Budget areas work with their partners and central government to develop model approaches for producing savings-sharing agreements within 12 months.
21We welcome the move towards pooled budgets in the 2013 Spending Round.
Concluded (the committee's words)
We welcome the move towards pooled budgets in the 2013 Spending Round. The pooled funds available only represent the beginning of what will be needed in order to fully integrate public services. We expect to see significant expansion in the use and scale of pooled budgets before 2015.
22Following the success of the pilots at local level the Government must now assess how...
Recommended (the committee's words)
Following the success of the pilots at local level the Government must now assess how best to fund public services through the Community Budget model. We recommend that the Government create one cross-Whitehall system for incentivising departments to invest in Community Budgets, which will have the effect of allowing authorities to commission services on the basis of local need. This will require local authorities to be given maximum flexibility over their budget for public services.
23The likelihood is that significant savings from Community Budgets will accrue to central government which...
Concluded (the committee's words)
The likelihood is that significant savings from Community Budgets will accrue to central government which should therefore invest upfront in their development. Given the effectiveness of the use of central government secondees with the Whole Place pilots, funding an extension of this approach to other areas would be an effective form of investment. Departments should, in addition, respond constructively to requests from local government for pump priming funding for the implementation of Community Budgets.
24Some long-term investment agreements between local authorities and their partners within Community Budgets would be...
Concluded (the committee's words)
Some long-term investment agreements between local authorities and their partners within Community Budgets would be greatly assisted by the Government providing a clearer indication of funding levels into the medium to long term. Such indications— though necessarily provisional—would give public sector agencies confidence about their budgets and encourage them to invest in service improvements. In addition, the ability to carry over spending from one financial year into another would enable agencies to be more strategic in the way they spent their budgets.
25We intend to follow the results of the Troubled Families Programme over the next few...
Concluded (the committee's words)
We intend to follow the results of the Troubled Families Programme over the next few years and monitor its impact.
26The number of families encompassed by the Troubled Families Programme does not cover all the...
Concluded (the committee's words)
The number of families encompassed by the Troubled Families Programme does not cover all the families and children that require support. We therefore welcome the expansion of the programme to cover an additional 400,000 “at risk” families. However we note that the new resources made available to the programme until 2016 are not proportional to this expansion. This additional workload is likely to challenge the capacity and resources of local areas. As a result it will be even more important than it has been for the Department for Communities and Local Government to carefully monitor progress and provide further resources if necessary.
27We fully support the work being done through the Troubled Families Programme and recognise that...
Concluded (the committee's words)
We fully support the work being done through the Troubled Families Programme and recognise that it is providing much needed resources to address the acute problems faced by some families. However, central and local government need now to begin to think about the way these families will be worked with after the Troubled Families Programme ends and how local authorities can maximise its impact by integrating the current programme and its results into their future plans. The Troubled Families Programme should not detract from work being done locally with the much larger pool of families with complex needs including children living in poverty and children who do not have a good level of development at five years old.
28We welcome comments by Louise Casey that, in the case of the Troubled Families Programme,...
Concluded (the committee's words)
We welcome comments by Louise Casey that, in the case of the Troubled Families Programme, sanctions should not be imposed too early in the Programme on local authorities that have failed to meet the payment by results criteria as this might affect the programme’s overall outcome. In responding to our report we ask that the Department for Communities and Local Government clarify whether any local authorities have had funding withheld for failure to work with 75 per cent of the families they promised to in the first year. DCLG should also monitor whether there are any perverse incentives generated by the use of payment by results within the Troubled Families Programme and take steps to address these if they arise.
29We see potential for Community Budgets to experiment with the use of payment by results...
Concluded (the committee's words)
We see potential for Community Budgets to experiment with the use of payment by results mechanisms—set on a local basis—which may be particularly useful in motivating service delivery partners. However, the centrally driven and monitored Troubled Families Programme stands apart from Community Budgets. The programme’s top-down ethos should not subvert Community Budgets which must be driven locally so that they can effectively address local needs. While payment by results by central government may be one method of assessing the potential of Community Budgets to produce positive results, this approach also risks distorting incentives and its use should therefore be carefully considered. The decision to use Conclusions and recommendations 45 payment by results on a local level for Community Budgets is therefore one for each local area to make.
30Community Budgets should proceed in the form of further pilots with a view to rolling...
Concluded (the committee's words)
Community Budgets should proceed in the form of further pilots with a view to rolling out the initiative nationally as soon as possible. Central government should, during this process, be supportive of local areas, outside pilots, wishing to begin their own work on Community Budgets. Government must give Community Budget areas a clear indication of the specific support it will provide them with. The continuation of pilots must not be allowed to slow momentum towards wider change. The pilot programme should therefore have a clear timetable and measurable outcomes. We expect further pilots to build on the work already done to demonstrate to central departments the merits of giving financial flexibility and flexibility over policy implementation to community budget areas.
31The Government should by no means underestimate the challenge for itself and for local authorities...
Recommended (the committee's words)
The Government should by no means underestimate the challenge for itself and for local authorities of introducing Community Budgets nationally. There will be some failures from which the Government must learn as well as from the successes. All parts of Government, central and local, need to work together towards the implementation of Community Budgets. Some areas such as the health sector currently have a golden opportunity to introduce Community Budgets. In other areas continuing silo mentalities will have to be broken down for Community Budgets to be effective. Without quickly and fundamentally changing the way in which services are delivered by increasing local autonomy and integrating services so as to reduce demand and dependency, the reductions that are made to public spending on local services may simply result in more spending in the future on welfare, and judicial and emergency health interventions.
Correspondence 1 letter
- 15 May 2014Letter from Brandon Lewis to the Chair, 25 April 2014To committee