Community Budgets

Clive Betts Excerpts

Thursday 6th February 2014 Westminster Hall

[Mr Clive Betts (Sheffield South East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Sheridan, and to introduce this debate on the third report this Session by the Select Committee on Communities and Local Government, on community budgets, an important subject. To set the context, the Committee supports the concept of community budgets and how they work in practice where pilots have been established. It is fair to say that, as well as supporting what has been done on community budgets, the Government were generally supportive of the Committee’s recommendations. We all saw the potential, in this economically difficult climate, both to save money and to improve services. Not many initiatives have the opportunity or potential to do both.

I will briefly sketch the Committee’s overall view and then put some specific questions about remaining issues of concern, some of which were raised in the report and some of which the Government might not have answered as fully as we would have liked. I appreciate that I might ask a lot of specific questions; if the Minister feels that some of them are more appropriately responded to in writing after the debate, I understand.

Community budgets are not matters of great political contention. It is merely a matter of exploring how we can make the ideas work in practice, considering the obstacles to the successful further development of the community budget approach, learning lessons from what has happened on the pilots, and seeing how community budgets can relate to and work more widely with local growth funds and city deals. I flag up the fact that the Committee is now considering the London Finance Commission and its recommendations for financial devolution to cities. Maybe that is another element that will come into the devolutionary equation in due course.

To summarise the Committee’s findings, we felt that the pilots demonstrated a clear potential for delivering cheaper yet more integrated services that are better related to the specific needs of both areas and individuals living in those areas. We recognised that to be successful, they need strong leadership at the local level and from central Government. We had one little worry: pilots tend to be in areas where individuals are committed to making something happen, and strong leadership tends to go with that. Will the leadership naturally be as strong, and will it be the right sort of leadership, in other areas as the scheme is rolled out across the country?

We acknowledge that there are barriers, often cultural barriers, particularly in Whitehall, and the important role that secondees from Departments have played in helping to break them down. We recognise the need for a clear framework, so that the costs incurred and the benefits, which do not always come to the same organisations, are clearly identified and systems for accountability are in place.

On the troubled families programme, about which I will say a few more words at the end of my comments, we recognise generally that progress has been made. The Minister might like to update us further on the present position and how many families the programme is now dealing with. We had a few concerns about the future—the additional families coming on stream in 2016 and what will happen thereafter.

Generally, the Government response was positive and recognised the need for a wider roll-out of the principles behind community budgets—strong leadership, support systems and accountability mechanisms—but it used some new vocabulary that we had to deal with. Something called the transformation network was referred to many times, and we are interested to find out more about that organisation, body or network, as it seems key to how the Government intend to take the scheme forward. Another interesting organisation was the Treasury technical advisory group, undoubtedly lurking somewhere in the Treasury across the road, which will be important in helping move the scheme forward.

On specific matters, the Committee could see merit in having more pilots, but ultimately we wanted a nationwide roll-out of community budgets. We thought that that was important and that they have that much potential. We want them to happen everywhere. The Government response supported increased integrated delivery and gave a lot of examples of initiatives and freedoms given to local authorities, such as the reforms of the housing revenue account, which are not directly linked to community budgets but illustrated the resulting freedoms that authorities could have—particularly if the cap were taken off borrowing, but I make that point in passing before moving on to issues more relevant to the report—and other forms of assistance that the Government will give to help the principal approach of community budgets spread more widely.

Essentially, it is about encouraging service transformation, if not through formal roll-out of more measures that we would immediately recognise as whole-place community budgets. What does a successful roll-out of the principles actually look like in practice? How will they be embodied in the delivery of services in our communities throughout the country? Central Government support for the process is clearly key, because much of what we want is about central Government services delivered locally, in a more joined-up way, and by working in conjunction with local authorities, police and other local services.

We recognise that secondments have been important in the pilots to breaking down the barriers that had often existed in Departments and finding a way in to those Departments to make them respond more positively. We accepted in our report that the idea of secondments could not be rolled out to every part of the country—that probably is not feasible—but we asked for at least a named official in each Department to whom local authorities could go if they were experiencing problems, delays or barriers, for help finding a way through those obstacles.

The Government response discussed the public service transformation network established as a way to deal with that issue: its role in disseminating lessons learned from the pilots, its help with plans to transform services in different parts of the country, and the appointment within it of account managers. I presume that those account managers are very much the sort of named officer or official that the Committee asked for—someone in a Department with the responsibility to help make the scheme work and to whom local authorities could go if they found barriers being put up.

I have a few questions about the transformation network, because it appears in many of the Government’s responses. What precisely is it? What staff are involved in it, and how many? What is its budget, and to whom is it accountable? Those are important questions to answer if we are to understand how it works. There is also a reference to its dealing with 22% of service provision across the country; what happens to the other 78%? How will it be dealt with? That seems fairly fundamental if we are looking for a national roll-out. Will we have any more pilots like the whole-place pilots or the neighbourhood pilots, or will there just be a more diffuse dissemination of the principles of community budgets?

Co-production is important. Community budgets clearly have financial incentives to make savings and deliver better services for the same money. It is an important catalyst for pushing service providers to better and more integrated working relationships, but if that is to happen, central Government Departments must let go and give their officials at local level the freedom to engage properly with local authorities and deliver things in different ways in different parts of the country. I cannot help but throw in a little one by saying that the Department for Communities and Local Government should be taking the lead, but when the Secretary of State starts to direct authorities on how often they should empty their bins—he will say that he does not direct, so let us say encourage or persuade them, or comment on how they should do it—or tell them how they should deal with their parking arrangements, that does not create the best of atmospheres and is not the best way to promote letting go and allowing local officials to engage at local level with local authorities and to respond to local needs. Is not it really the job of the Department for Communities and Local Government to take the lead in a very positive, localist way and to help other Departments to roll out best practice?

Economic growth is a key issue in relation to community budgets. We can see community budgets, together with the city deal arrangements and the local growth fund, unlocking the potential for real, clear public service transformation to promote economic growth at local level. A key element, in addition to improved public services, is the idea of being able to work positively at local level to deliver higher economic growth. The Select Committee will look at that when we look at the work of the London Finance Commission and its recommendations.

Very clearly in our report, we drew attention to the comments that Essex county council made to the effect that in trying to work with the Department for Business, Innovation and Skills, it had simply hit a brick wall: BIS was not willing to co-operate. We raised that issue with the Secretary of State for Communities and Local Government when he gave evidence and, to be fair, he said, “I’m not aware of this, but I will go back and look into it,” and we had a very long response from the Government on this point. What they did not do was answer the following questions. Has BIS reformed? Has the brick wall been knocked down? Is BIS now co-operating properly? That is what we want it to do. It is one thing to list a load of initiatives; it is another thing to say, “Is that Department really signed up to the process, or is it going through the motions?” Community budgets will not work in the end unless there is real enthusiasm, and not merely within the Department for Communities and Local Government. Despite my little aside about the Secretary of State a few minutes ago, I accept that Ministers in that Department want this to work, but I am not always sure that all their colleagues or, indeed, all the civil servants in other Departments necessarily want it to work.

Joining up social care and health offers a way forward to better, more integrated services. That will not necessarily involve the full whole-place approach, but it is a very important area. The Government mentioned in their response the better care fund and the important role that health and wellbeing boards will have to play in trying to join up and integrate services. Do we see any evidence in delivery on the ground that the health and wellbeing boards and the new public health role of local government are starting to shift the approach from reactive to proactive? On the better care fund, do we have evidence that the NHS trusts really mean to co-operate to make things happen, or will they sit there and say, “This is health money. We want to spend it in a way that we direct”?

That leads me on to data and information sharing. I remember when the Select Committee did our inquiry into the transfer of public health to local government. We were very supportive, considering it to be one of the very positive localist things that the Government had done. When Baroness Hanham gave evidence to the Committee, we noted the honesty with which she said, “These two Departments”—CLG and Health—“have different cultures and information systems, and there are real challenges and problems in breaking those barriers down and getting proper and full co-operation.” In their response, the Government pointed out that to access the money available through the better care fund, there had to be clear indications at local level that data and information sharing had been properly addressed. As we approach the beginning of the next financial year, does the Minister have any information on whether progress has been made?

I was pleased that the Government seemed to recognise that data and information sharing is a potential problem. The Secretary of State was quite open in saying to the Committee that he thought that, very often, there were no real legal obstacles to data and information sharing; there was just a presumption that people could not do it. It was more a matter of culture and belief than a real obstacle, so the development of the network of What Works centres, the work of the transformation network and the efforts to get local authorities and central Government Departments to set up a centre of excellence for information and data sharing are all very welcome, because they do seem to show the Government taking this matter very seriously. There is also the Treasury technical advisory group and its role in exerting pressure to ensure that those barriers are removed where they exist.

There is a brief reference to the Cabinet Office exploring whether legislation might be needed, whether the problems of data sharing are not just about cultural barriers and perceptions about what the position might be, and whether there could be some real legal obstacles to data sharing. If that is the case, can the Minister update us on what progress the Cabinet Office has made with regard to data sharing?

Financial accountability is also very important. The Government response was very much that, as we integrate services in a more specific way across a number of different initiatives, the existing system of accountability will be satisfactory. However, there was recognition, I think, that if we move to pooled budgets, which I think the Government were saying was still a little way away, we would need to have a fresh look at the whole question of accountability, given that pooling local authority resources with local police resources and Department of Health resources will involve dealing with all the different systems of accountability for that spending. We have asked the Public Accounts Committee to have a look at this. Given that the Government have recognised that a fresh look will be needed at some point, can the Minister enlighten us on his vision of how a new system of accountability would work?

Finally on community budgets, there is the issue of wider financial concerns. We drew attention to the fact that if the budgets were to work in the long term, a different approach to long-term funding would be needed. We had a response from the Government on that in two different places. They said that

“the Treasury will work with departments to give local public services the same long-term indicative budgets as departments from the next Spending Review”.

That is a fundamentally important statement and one that the Minister might like to say a little more about. If the Government are serious about that, it could fundamentally change the financial relationship between central and local government, and we would like to hear more.

We identified the problem that the body that makes the savings under community budgets may not be the body that spends the money. Local authorities can put a lot of work into youth services, but the costs are saved in the justice system. Very often, of course, central Government make the savings and local government spends the money. The Government talked about the transformation network working to develop locally based investment agreements, but the Committee said—the Government did not really respond to this—that we thought that Departments would have to provide some money up front if they were to benefit down the line. There was not really a clear indication that that message had got across and that the Government recognised that if community budgets were to work—if we were to roll them out—they would have to do some pump-priming. Indeed, we talked about all Departments, not just the Department for Communities and Local Government, recognising that and about having a cross-Whitehall system for incentivising that process—perhaps a top-slice of departmental budgets. I think that Lord Heseltine suggested that in his “No Stone Unturned” report when he talked about nearly £50 billion being put into local growth funds. In the end, we got £2 billion from Government —slightly less than Lord Heseltine had mentioned.

One of the rumours that went round—I do not always believe rumours, but my sense is that there might be some truth in this one—was that Departments were simply pulling up the drawbridge and saying, “We’re not going to give any of our budgets up to this process. These are our budgets and we’re going to spend them as we want.” Despite the helpful responses to a number of the recommendations in our report, not much was said about the need for pump-priming and whether there needed to be a systematic cross-Whitehall basis for incentivising this process.

I shall say a few words about the troubled families programme. The Select Committee was supportive of that and we could see what the Government were achieving. It might be helpful, as I have said previously, to have an update on what progress has been made. We welcomed the expansion of the programme, with 400,000 extra families being brought into it, but questioned whether the increase in the number of families being dealt with was being matched by a proportionate increase in the resources made available. I am not sure that we got a full answer to that question.

What happens to the programme in 2016? Is the intention to roll it on? If so, what will happen to families who have been successfully dealt with by the programme and ticked off, for whom the payments have been made? Will there be any sort of follow-up system to monitor those families and ensure that they do not slip back into difficulty? The Select Committee also asked about sanctions via the payment-by-results system for authorities that had not delivered. The Government response stated that there had not yet been any sanctions. Will the Minister update us on that?

I will probably not be able to tempt the Minister too far down this road, but does he believe that in the longer term, initiatives such as community budgets, city deals—the Committee has been very supportive of those—the local growth fund and proposals from the London Finance Commission might together become a springboard for widespread localism and the decentralisation and devolution of powers and responsibilities to local government and local communities? Might those initiatives, of which community budgets are a key part, come together to form a brave new world—a rebirth of truly independent local government—and does he see himself as the midwife of that process?

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[Brandon Lewis]

The right hon. Gentleman makes a fair point, and I have had experience of this. One really good example of data sharing involves Cheshire fire authority, which has put a lot of time and effort into breaking down barriers, getting to the root of what really can be done, and getting on with it. It is useful in a debate such as this for Members from all parties to spread the word—when people read Hansard as bedtime reading, or over the weekend—so that people appreciate that such things can be done if they want to do them. The Act needs to be read properly, so that it is not misunderstood or misinterpreted by anybody in an authority.

Little things, simple things, can make a difference. In Hertfordshire, a group of people consisting of representatives from the fire authority, the county council, the police and social services works together in the same room. That has broken down barriers and has got through to people, enabling them to understand things better and allowing for much better data sharing.

Whether barriers are real or imagined, we have committed to improve data sharing where it will improve services for residents. We are setting up a centre of excellence for information sharing and exploring options for legislative changes.

The pilots also told us that their attempts to work with partners were sometimes hindered, as Members have outlined, by uncertainty about future funding. As a result of these concerns, the Treasury is working with Departments to give local public services the same long-term indicative budgets as Departments, from the next spending review. One key characteristic of the whole-place community budget pilots—why they succeeded where past attempts did not succeed as well, or failed—was the close co-operation between central and local government. As the Select Committee’s report makes clear and as the hon. Member for Corby said, the pilot areas highlighted the importance of Whitehall secondees working alongside them, helping to change the way central and local government work together, and helping to bridge understanding of how both sides work.

[Mr Betts]

I welcomed the Treasury’s looking at whether it can give local authorities more of an indication on medium-term budgeting than they currently have. As part of that process, will it also be the Treasury’s job to look at how far, during the spending review period, Departments will be expected to contribute a certain part of their budget to the community budget process?

[Brandon Lewis]

The Committee Chairman tempts me to prejudge what the Chancellor may decide, but he will understand if I resist him for now. The Treasury is looking at the issue and understands the importance and benefits of long-term work and giving budgets in the way that I have outlined.

[Brandon Lewis]

I will not hold the hon. Gentleman to his promise about that being his last intervention; I would not want to curtail any further insights. He does not make an unreasonable point. I will mention the important issue of social care and where it may lead in a moment; it is linked in respect of the better care fund, for example. However, as I said in opening, it is true that if we can have a better service up front, people might not necessarily need emergency and hospital care. That would be better for them and mean lower costs for their areas. The Committee Chairman mentioned the potential for being a midwife; if my Department in its current format ends up being the midwife to public services working together in future, I will be proud of what we have achieved in our time in office.

The pilot areas highlighted the importance of the secondees. The Government are committed to the approach, which is why we created the public service transformation network, which has 30 officials and counting seconded from around Whitehall and local government. They are now working with the nine new areas, but they are not the be-all and end-all. It is a rolling programme. The secondees are helping the areas to learn from the pilots and quickly create a better outcome for service users; it is an evolution of what the pilots delivered.

Some areas are picking up themes similar to the ones the pilots picked up. Each area has its own focus, depending on its circumstances and the needs of its local residents: localism in its true sense. In Bournemouth, Poole and Dorset, the focus is on integrating and improving services for elderly residents and for those with mental health or learning problems. Better support for those seeking employment or training is the priority for partners in Lambeth, Lewisham and Southwark, and for the six boroughs within the West London Alliance, which are working superbly well together to deliver there.

I have already mentioned Surrey’s plans to integrate local emergency services, as Northamptonshire has done, but it also wants young people in their area to receive better training and education. In Swindon, partners want to create safer communities and, in particular, give better and more co-ordinated support to victims of domestic abuse. Residents in Bath and north-east Somerset could benefit directly, with more money in their pocket, thanks to the work of local partners and the Department of Energy and Climate Change to improve energy efficiency in local homes.

I have barely begun to scratch the surface of the work going on in those places. I urge colleagues to take a close look at those projects when the network’s website is launched in just a few weeks’ time. People might see something that they think should be happening in their own constituency; that touches on the point raised by the right hon. Member for Greenwich and Woolwich (Mr Raynsford) on sharing data and best practice. Better services are not the preserve of people living in pilot areas or in one of the nine areas that are working intensively with the network. Those areas are there to share best practice. We want to learn from them and to see other areas move, too.

I agree completely with members of the Select Committee that local areas should not be held back or discouraged from proceeding with service transformation. Much of that can be done without any assistance from central Government, because it simply requires local partners to sit down, forget their differences and focus on the outcomes for residents. Partners in Staffordshire, Leeds city region, Blackpool, Tyneside, Cornwall and Suffolk are getting on with plans to improve services for residents, and others can do the same. Much can be learned from the excellent work in Suffolk, where the county council is working with district councils to share management and services. If there are barriers, gather evidence and let us know. We have already shown that we are ready and willing to aid the process by changing the way government works.

I want specifically to address the idea that the work of the community budget pilots is somehow unconnected with other important areas of policy or that big Departments are not engaged. We must not get caught in the trap of thinking of community budgets and service transformation as an initiative cut off from other Government projects, work and reforms. The principle of neighbourhood and whole-place community budgets is simple; it is about partnership working across public services, local and central, to create not just cost-effective services but services designed around people rather than structures and organisations. The same principle is at the heart of the troubled families programme, the integration of health and social care budgets, the pooled local growth fund and many more areas of work; it is not a top-down exercise. We are working closely with local partners and others on the design of the expanded programme.

The troubled families programme, for example, is being extended, as the Select Committee noted, to an additional 400,000 families over five years, with £200 million already committed for the first year in 2015-16. The hon. Member for Corby asked about the assessment of the programme, which is subject to a three-year independent evaluation. Initial findings are due later this year.

On health, it was partly thanks to the hard work and the evidence provided by the four whole-place community budget pilots announced by the Government that we could develop the £3.8 billion better care fund in the spending round. Health and social care services are already working together to ensure that our elderly residents receive the support they need to stay at home and out of hospital. We have also established a network of 14 integrated care pioneers that will, like the community budget pilots before them, work closely with central Government to develop the solutions that others can then adopt. Locally led public service transformation also has the potential to promote economic growth.

Although I understand that the Select Committee and the Essex pilot are disappointed that not all of Essex’s whole-place proposals were adopted—the Essex pilot was particularly commented on—it is possible that such areas can do far more within existing Government policy. Essex has done great work in establishing an employment and skills board that involves local employers and skills providers, and the board’s labour market intelligence has already influenced millions of pounds of capital investment by further education colleges.

A number of the nine new places are reviewing how skills and employment support is provided, and the network is working with the Department for Business, Innovation and Skills, Jobcentre Plus, the Skills Funding Agency and the Department for Work and Pensions. Again, the support is not just for the select few.

[Mr Betts]

The Minister is right to say that the Select Committee drew particular attention to the Essex problem—or the BIS problem, as it should probably be called. He has given a long list of things that Essex has been able to do, but the people from the Essex pilot were clearly concerned when they came to give evidence to the Committee. Will he take the Committee into his confidence and indicate precisely what BIS did when those points were put to it? How did BIS respond? What commitments has BIS given to change?

[Brandon Lewis]

There is still a lot that Essex can do within the abilities and powers that it has been given. We arranged a meeting with BIS directly, which I think has now happened, but I will pass on the hon. Gentleman’s message and ask BIS to respond directly to him on where it is at.

The Government have invited local areas to make public service reform proposals as part of the local growth deals, which are currently being negotiated with the cross-Government local growth team. We have also provided an extra £10 million a year for Jobcentre Plus, working in partnership with local authorities, to help young people find apprenticeships and traineeships. I hope that we can all agree that the focus on better outcomes, which is at the heart of the community budget pilots, is evident across all Departments and all parts of the public sector.

Members asked, “What exactly is there?” The network has 30 staff and a budget of £2 million. The network is accountable to Sir Bob Kerslake, but it reports to Ministers in the Department for Communities and Local Government, the Cabinet Office and the Treasury.

The Chairman of the Select Committee made a point about localism. The community budget pilots, the transformation network and some of the great work being done by councils across the country to bring public services together and to get on with changing how we deliver services for the better—this is what really matters—proves that the power the Government have devolved to local communities and local councils goes way beyond the central process that we had in the past. That is a revolutionary change that, hopefully, local government will grasp and take forward. It would be wrong for us in central Government ever to pretend that we have taken a vow of silence on what we think of certain decisions or on pointing out good examples of best practice for providing residents with the great services that all taxpayers deserve.

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[Mr Betts]

I thank the Minister and the shadow Minister, my hon. Friend the Member for Corby (Andy Sawford), for their responses to the report. We have had a good, positive debate with a lot of agreement. I said at the beginning that the Minister would probably not have time to respond to all the questions that I raised. I am sure he will write to me afterwards so that I can share his responses with the Committee.

The report was supported by the whole Committee, as our reports generally are. There is clear agreement that, through the community budget process, the available money can be spent better. Perhaps more importantly, the individuals who receive services will get a better deal. They will get more joined-up and integrated services and less waste and confusion.

To develop the approach across the country, we welcome the development of more pilots, but we want to see a clear plan for how the community budget approach could be rolled out across the country. I am not sure that I heard that from the Minister. Where does he think we will be in five years’ time? How will we get to a situation in which the approach can be rolled out across the country in that period of time? I do not think that five years is too optimistic a target.

I re-emphasise the point that local government is up for and wants community budgets. The Minister and his colleagues in the Department are entirely supportive of community budgets, but if they are to work the whole Government and all Departments need to be involved. There are still one or two question marks about that.

I will finish with a quote that my hon. Friend the Member for Corby has already partly pre-empted. This is the final comment of our report:

“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.”

That says it all. It is why the community budget process is so important and why we need it to be rolled out across the country as soon as possible.