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Ministers in 'cloud cuckoo land' over voluntary pooled budgets

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Ministers have said they will not force government agencies to co-operate with the troubled community budgets programme as the focus shifts from pooling budgets to ‘innovative finance’ tools in pilots to build support.

And scepticism over the programme will only be heightened by an admission from civil servants that the goal of a single, pooled budget for an area may ultimately prove unworkable.

A report to the ministerial group overseeing the programme said that unless local agencies, including the police, primary care trusts, nascent clinical commissioning groups and JobCentre Plus were made “mandatory full partners” with the pilots, there was “significant risk to the programme”.

But minutes of the group’s 24 May meeting, chaired by junior local government minister Baroness Hanham (Con), right, confirm she ruled this out, favouring a “flexible” approach that did not involve “prescribing or mandating”.

The report to the group, put together by councils in Hull, Swindon and Leicestershire, said the current approach was based “almost entirely on goodwill between partners” and could not be a formula for success as partners were focused on their own “diminishing resources “and good relations at a local level were “not universally present”.

The group’s response was greeted with disappointment by figures at the meeting, with one participant telling Baroness Hanham she was living in “cloud cuckoo land” if they thought the programme could be delivered without strong governance.

One senior local government figure said: “There needs to be some glue that holds the whole thing together and governance is an important part of that. Some of the civil servants get it but ministers are not taking it seriously.”

A separate presentation from Department for Communities & Local Government civil servants said a radical vision for community budgets would involve “a single payment stream from Whitehall to deliver a set of outcomes, underpinned by local commissioning of what is needed to deliver”.

However, a further report to the Hanham Group by West London Councils and Birmingham City Council on ‘innovative finance’ noted that, as the community budget pilots had “not pooled any funding centrally at source in its first year”, they should instead press ahead with trialling payment-by-results and social impact bond schemes.

A DCLG spokesman insisted the second phase of the government’s resource review would see single budgets tested in two areas.

But a DCLG report to a separate meeting of Lord Bichard’s steering group on 20 June said the pilots were just a “proof of concept exercise” and involved no commitment to pool budgets.

“We are committing to testing the hypothesis, which central and local agencies frequently return to, that a single budget is the best way to deliver defined outcomes,” the report said. “We might find the approach has merit or is, quite simply, unworkable - either outcome will be valuable learning.”

The report said the two pilots, which would be chosen on the basis of “minimising complexity”, would be driven by a team of “senior, empowered” Whitehall officials “crusading for change” who would work with officials in the local areas “intensively over a sustained period”.

It said the output of the two pilots would be an “operational plan that will describe how a single budget could be implemented in each place” allowing options to be explored in a “‘live’ low-risk environment”.

For more on this story see Allister Hayman’s blog here.

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