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 Picklesannounced on 21st December 2011.
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 inNewcastle;White City,Kingston,Poplar, Queens Park in London; Ilfracombe inNorth Devon;Bradford Trident; Sherwood inTunbridge Wells;Haverhill; and Castle Vale, Shard End and Balsall Heath inBirmingham.
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."
Further details can be viewed at the Communities and Local Government Website.