Community budgets have long since been the great hope for the future of local public services, but the process has been painfully slow.  Cutting through silos of both central and local services – and changing the culture of the public sector – has not been a quick win.

Last week, the Public Accounts Committee issued a series of four reports, including one on community budgets, which together came to the conclusion that the Cabinet Office and the Treasury need to take much more control over government spending departments in a bid to break down barriers and get more for taxpayers' money.

Launching the reports, PAC chair Margaret Hodge, said: ‘The need for more efficient
administration in public services has never been more pressing.  Strong action is essential to minimise the impact of real terms cuts in public spending on the quality of public services.

‘A central message emerging from our four reports today is that the Cabinet Office and the Treasury together need to be much stronger if they are to exert effective corporate control over spending in departments and achieve long term sustainable savings for taxpayers.'

While the Government is dragging its heels over Whole Place Community Budgets, the Department of Communities and Local Government (DCLG) has pushed forward to the next stage with the announcement at the Local Government Association (LGA) conference earlier this year of the next tranche of pilots.

The announcement, by communities secretary Eric Pickles, also included the introduction of a public services transformation network in a bid to help move the
pilots on.

One of the pilots, the West London Alliance, includes Harrow LBC – where chief executive Michael Lockwood is a fierce advocate of the community budget system.

He said in his borough alone the public sector spend is £2bn – so just a 1% efficiency across the board would reap £20m in public sector savings.

‘We could save 1% without breaking into a sweat,' he told The MJ.  And that is before you consider the service improvements that come from working  in tandem, rather than in silos.

But he agrees with the PAC that the lack of control from the centre has hampered progress – even though he has a letter from Prime Minister David Cameron giving the community budget system his backing.

‘There should be someone in government who holds the ring on this.  It is really inconsistent.'  He identified five key barriers to making this work:

Data sharing: It may sound ‘quite boring' but working across different computer
platforms requires new ways of thinking.

Governance structures: public sector structures are geared up towards silo working and are ‘not configured' to work across partnerships

Risk-adverse cultures: ‘We are quite risk adverse as a society, but this is a time where we have to be more innovative,' said Mr Lockwood
Skills: We need new skill sets, particularly things like collaborative leadership and the ability to compromise
Lack of investment: He said: ‘We in local government need to invest money into areas where there is a benefit.  That's tough for us when we are making
cuts.'

‘The next stage of cuts can't be done without partnerships,' Mr Lockwood told The MJ.


‘A lot of the things we need to do, we can't do in isolation.  We don't know all the answers.  The problems can only be solved by working together and the quicker the better.'  He added: ‘It's got to be the way forward.'

The PAC also has its own ideas for the way forward – many of them are a direct call for clarity and leadership from central government (see box ).

But, it is the Treasury and Cabinet Office that face the full force of the PAC's wrath over the failure to break down the silos of central government.  In this instance, the DCLG gets a good press.  The report says: ‘The Department for Communities and Local Government, which manages the Whole Place Community Budgets programme, has provided effective support to-date.  However, if other central government departments are not committed to Whole Place Community Budgets it may, like similar initiatives in the past, fail to deliver any significant and lasting change.'

The Treasury also takes a hammering over the Government's progress on early action. According to the PAC, governments fail to deliver when it comes to early action – with only £400bn spent each year on prevention.

As local government moves further into initiatives such as troubled families, and the public health, there are clear lessons to be learned.

The report says: ‘Early action accounts for only a fraction of annual spending and this spending is not properly co-ordinated.  There is no common definition of early action, no central ownership, and little capacity at the centre to drive effective delivery and share good practice.'

While the report on ICT procurement is clear that government purchasing power is not being used effectively, the report on Civil Service reform is critical of slow progress.

In short, the four reports show a damning picture of central government lacking leadership and clarity across its public service and procurement policies.  The PAC pulls no punches when it comes to telling the Government to stop wasting taxpayers' money – and it puts the Treasury and Cabinet Office at the heart of the
problems.

Local government may already be one step ahead of the rest of the public sector when it comes to efficiency, but it needs to be several more steps forward if it is going to survive the cuts to come.

Without central government support and leadership, the future will be even bleaker for the sector.

PAC's community budget recommendations

1 Central government often fails to integrated because it is structured around ‘siloed' departments
2 There is a lack of strategic leadership from the centre
3 The Government lacks evidence on where it can join up
4 The current funding rules can act as barriers to co-ordinated working
5 When several organisation combine resources to deliver a service, it is important to be clear about accountability
6 Whole Place Community Budgets illustrate the potential for better integrated services