Budgets bid bolstered

Accountancy giant Ernst & Young has been hired by the Local Government Association (LGA) to ‘hammer home’ the business case for Community Budgets to the Treasury, council chiefs will reveal today.

The LGA and the four ‘whole place’ pilot areas currently trialling Community Budget programmes have asked the ‘Big Four’ accountancy firm to develop a fully-costed business case based on the pilots, as local government attempts to convince chancellor George Osborne the joined-up spending regime could deliver improved public services at sustainable costs.

With the Treasury still undecided about the future of Community Budgets – through which cash to fund a diverse range of public services is devolved to local managers, who decide on priorities according to local needs – local government leaders, convinced that the regime is the best way to fund future services, have embarked on a co-ordinated campaign to win over national decision-makers.

The LGA today (24 May) revealed it would make representations to the Treasury ahead of the Coalition’s mid-term Spending Review, using Ernst & Young’s research to present ‘the clear value-for-money benefits of moving to community budgets, and the ways in which they can help transform public services’.

Sources at Smith Square and the supportive Department for Communities and Local Government (DCLG) suggested to The MJ a solid business case from Ernst & Young could lead to a swift national rollout of Community Budgets.

A DCLG spokesman responded to the LGA’s announcement, saying: ‘This will be a useful addition to the work that each pilot area is already doing with LGA and government to come up with a clear cost benefit analysis.

‘Ernst & Young’s expertise will be used to look across the piece, and see how the benefits from the four areas might be applied across local government generally.’

Announcing the move, LGA chairman Cllr Sir Merrick Cockell, said: ‘The case for Community Budgets appears overwhelming and this vital piece of work can hammer home the financial benefits to national politicians.’

Sir Merrick added ‘now was the time’ to make a wider case for the economic and social benefits to public service providers, after existing work with problem families had shown that pooling pubic sector budgets from a range of departments and organisations could be beneficial to service users – often by eradicating duplication.

The four pilot schemes have expanded the original Community Budgets concept from a focus on a single issue, such as ‘problem families’, to cover a wider range of local services. A pilot at Cheshire West and Chester Council, for example, is experimenting with ways to pool a single budget of between £3bn to £4bn across more than 150 local services.

The three other areas piloting such spending are Essex CC, Greater Manchester and the ‘tri-borough’ area within west London, which is heavily focused on youth programmes and skills.

Each pilot area will report back to the Government in October, while ‘quality assurances’ for each project will also be provided by a cross-departmental group within Whitehall.

A senior local government source told The MJ that Ernst & Young’s business case could help prevent previous instances of Whitehall policy deadlock – created in the past by officials rejecting figures or claims supplied to them – by providing ‘authoritative figures’ that could stop departments ‘arguing over what the numbers mean’.

‘What we are looking for Ernst & Young to do is to stitch together the business cases that are being developed in the four places into a common currency, then to try and make sure that currency is one that is comprehensive and persuasive for the government departments – and in particular the Treasury,’ the source added.

Darra Singh, associate partner at Ernst & Young and a former council chief exectuive, said it was ‘vital to ensure that we collectively translate the potential of community budgets into better outcomes for local people and significant financial savings to the taxpayer’.

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