The Government should  learn lessons from the ‘whole place' community budget pilots in pioneering better-integrated, more cost-effective public services, a spending watchdog has recommended.

A National Audit Office (NAO) case study into trial pooled budget arrangements involving four areas -  Cheshire West and Chester, Essex CC the west London tri-borough and ten authorities covering Greater Manchester – finds they have worked effectively with central government in producing business cases for driving public service reforms.

Greater Manchester's scheme is forecast to make net savings worth £270m over five years and Cheshire West and Chester is on track to deliver £56m efficiencies for the same period, the study finds.

Among key recommendations, the NAO urges the DCLG to work with local authorities to learn what has proved effective and share lessons capable of wide-scale adoption.  The watchdog also advises Eland House and the Cabinet Office to assess whether the ‘co-production' approach used in whole place schemes would benefit other parts of government.

However, although the report notes the findings of consultants Ernst & Young's study into potential community budget efficiencies - which suggests total annual benefits of between £4.2 - £7.9bn - the auditors said the true scale of savings and improved outcomes would only be ascertained through controlled implementation and robust scrutiny of local schemes.

NAO chief Amyas Morse said the coalition is trialling the community budgets programme properly - in contrast with the previous ‘Total Place' initiative.  ‘We encourage government to continue to work closely with local areas to understand fully what works and what doesn't,' Mr Morse said.

Leader of Westminster City Council, Cllr Philippa Roe, said: ‘The Chancellor has a golden opportunity to show real leadership that would help to get the economy moving, by using his forthcoming Budget to implement community budgets.'