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Community Budgets

Volume 575: debated on Thursday 6 February 2014

[Relevant documents: Third Report of the Communities and Local Government Committee, HC 163, and the Government response Cm 8794.]

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Foster.)

It is a pleasure to serve under your chairmanship, Mr Sheridan, and to introduce this debate on the third report this Session by the Select Committee on Communities and Local Government, on community budgets, an important subject. To set the context, the Committee supports the concept of community budgets and how they work in practice where pilots have been established. It is fair to say that, as well as supporting what has been done on community budgets, the Government were generally supportive of the Committee’s recommendations. We all saw the potential, in this economically difficult climate, both to save money and to improve services. Not many initiatives have the opportunity or potential to do both.

I will briefly sketch the Committee’s overall view and then put some specific questions about remaining issues of concern, some of which were raised in the report and some of which the Government might not have answered as fully as we would have liked. I appreciate that I might ask a lot of specific questions; if the Minister feels that some of them are more appropriately responded to in writing after the debate, I understand.

Community budgets are not matters of great political contention. It is merely a matter of exploring how we can make the ideas work in practice, considering the obstacles to the successful further development of the community budget approach, learning lessons from what has happened on the pilots, and seeing how community budgets can relate to and work more widely with local growth funds and city deals. I flag up the fact that the Committee is now considering the London Finance Commission and its recommendations for financial devolution to cities. Maybe that is another element that will come into the devolutionary equation in due course.

To summarise the Committee’s findings, we felt that the pilots demonstrated a clear potential for delivering cheaper yet more integrated services that are better related to the specific needs of both areas and individuals living in those areas. We recognised that to be successful, they need strong leadership at the local level and from central Government. We had one little worry: pilots tend to be in areas where individuals are committed to making something happen, and strong leadership tends to go with that. Will the leadership naturally be as strong, and will it be the right sort of leadership, in other areas as the scheme is rolled out across the country?

We acknowledge that there are barriers, often cultural barriers, particularly in Whitehall, and the important role that secondees from Departments have played in helping to break them down. We recognise the need for a clear framework, so that the costs incurred and the benefits, which do not always come to the same organisations, are clearly identified and systems for accountability are in place.

On the troubled families programme, about which I will say a few more words at the end of my comments, we recognise generally that progress has been made. The Minister might like to update us further on the present position and how many families the programme is now dealing with. We had a few concerns about the future—the additional families coming on stream in 2016 and what will happen thereafter.

Generally, the Government response was positive and recognised the need for a wider roll-out of the principles behind community budgets—strong leadership, support systems and accountability mechanisms—but it used some new vocabulary that we had to deal with. Something called the transformation network was referred to many times, and we are interested to find out more about that organisation, body or network, as it seems key to how the Government intend to take the scheme forward. Another interesting organisation was the Treasury technical advisory group, undoubtedly lurking somewhere in the Treasury across the road, which will be important in helping move the scheme forward.

On specific matters, the Committee could see merit in having more pilots, but ultimately we wanted a nationwide roll-out of community budgets. We thought that that was important and that they have that much potential. We want them to happen everywhere. The Government response supported increased integrated delivery and gave a lot of examples of initiatives and freedoms given to local authorities, such as the reforms of the housing revenue account, which are not directly linked to community budgets but illustrated the resulting freedoms that authorities could have—particularly if the cap were taken off borrowing, but I make that point in passing before moving on to issues more relevant to the report—and other forms of assistance that the Government will give to help the principal approach of community budgets spread more widely.

Essentially, it is about encouraging service transformation, if not through formal roll-out of more measures that we would immediately recognise as whole-place community budgets. What does a successful roll-out of the principles actually look like in practice? How will they be embodied in the delivery of services in our communities throughout the country? Central Government support for the process is clearly key, because much of what we want is about central Government services delivered locally, in a more joined-up way, and by working in conjunction with local authorities, police and other local services.

We recognise that secondments have been important in the pilots to breaking down the barriers that had often existed in Departments and finding a way in to those Departments to make them respond more positively. We accepted in our report that the idea of secondments could not be rolled out to every part of the country—that probably is not feasible—but we asked for at least a named official in each Department to whom local authorities could go if they were experiencing problems, delays or barriers, for help finding a way through those obstacles.

The Government response discussed the public service transformation network established as a way to deal with that issue: its role in disseminating lessons learned from the pilots, its help with plans to transform services in different parts of the country, and the appointment within it of account managers. I presume that those account managers are very much the sort of named officer or official that the Committee asked for—someone in a Department with the responsibility to help make the scheme work and to whom local authorities could go if they found barriers being put up.

I have a few questions about the transformation network, because it appears in many of the Government’s responses. What precisely is it? What staff are involved in it, and how many? What is its budget, and to whom is it accountable? Those are important questions to answer if we are to understand how it works. There is also a reference to its dealing with 22% of service provision across the country; what happens to the other 78%? How will it be dealt with? That seems fairly fundamental if we are looking for a national roll-out. Will we have any more pilots like the whole-place pilots or the neighbourhood pilots, or will there just be a more diffuse dissemination of the principles of community budgets?

Co-production is important. Community budgets clearly have financial incentives to make savings and deliver better services for the same money. It is an important catalyst for pushing service providers to better and more integrated working relationships, but if that is to happen, central Government Departments must let go and give their officials at local level the freedom to engage properly with local authorities and deliver things in different ways in different parts of the country. I cannot help but throw in a little one by saying that the Department for Communities and Local Government should be taking the lead, but when the Secretary of State starts to direct authorities on how often they should empty their bins—he will say that he does not direct, so let us say encourage or persuade them, or comment on how they should do it—or tell them how they should deal with their parking arrangements, that does not create the best of atmospheres and is not the best way to promote letting go and allowing local officials to engage at local level with local authorities and to respond to local needs. Is not it really the job of the Department for Communities and Local Government to take the lead in a very positive, localist way and to help other Departments to roll out best practice?

Economic growth is a key issue in relation to community budgets. We can see community budgets, together with the city deal arrangements and the local growth fund, unlocking the potential for real, clear public service transformation to promote economic growth at local level. A key element, in addition to improved public services, is the idea of being able to work positively at local level to deliver higher economic growth. The Select Committee will look at that when we look at the work of the London Finance Commission and its recommendations.

Very clearly in our report, we drew attention to the comments that Essex county council made to the effect that in trying to work with the Department for Business, Innovation and Skills, it had simply hit a brick wall: BIS was not willing to co-operate. We raised that issue with the Secretary of State for Communities and Local Government when he gave evidence and, to be fair, he said, “I’m not aware of this, but I will go back and look into it,” and we had a very long response from the Government on this point. What they did not do was answer the following questions. Has BIS reformed? Has the brick wall been knocked down? Is BIS now co-operating properly? That is what we want it to do. It is one thing to list a load of initiatives; it is another thing to say, “Is that Department really signed up to the process, or is it going through the motions?” Community budgets will not work in the end unless there is real enthusiasm, and not merely within the Department for Communities and Local Government. Despite my little aside about the Secretary of State a few minutes ago, I accept that Ministers in that Department want this to work, but I am not always sure that all their colleagues or, indeed, all the civil servants in other Departments necessarily want it to work.

Joining up social care and health offers a way forward to better, more integrated services. That will not necessarily involve the full whole-place approach, but it is a very important area. The Government mentioned in their response the better care fund and the important role that health and wellbeing boards will have to play in trying to join up and integrate services. Do we see any evidence in delivery on the ground that the health and wellbeing boards and the new public health role of local government are starting to shift the approach from reactive to proactive? On the better care fund, do we have evidence that the NHS trusts really mean to co-operate to make things happen, or will they sit there and say, “This is health money. We want to spend it in a way that we direct”?

That leads me on to data and information sharing. I remember when the Select Committee did our inquiry into the transfer of public health to local government. We were very supportive, considering it to be one of the very positive localist things that the Government had done. When Baroness Hanham gave evidence to the Committee, we noted the honesty with which she said, “These two Departments”—CLG and Health—“have different cultures and information systems, and there are real challenges and problems in breaking those barriers down and getting proper and full co-operation.” In their response, the Government pointed out that to access the money available through the better care fund, there had to be clear indications at local level that data and information sharing had been properly addressed. As we approach the beginning of the next financial year, does the Minister have any information on whether progress has been made?

I was pleased that the Government seemed to recognise that data and information sharing is a potential problem. The Secretary of State was quite open in saying to the Committee that he thought that, very often, there were no real legal obstacles to data and information sharing; there was just a presumption that people could not do it. It was more a matter of culture and belief than a real obstacle, so the development of the network of What Works centres, the work of the transformation network and the efforts to get local authorities and central Government Departments to set up a centre of excellence for information and data sharing are all very welcome, because they do seem to show the Government taking this matter very seriously. There is also the Treasury technical advisory group and its role in exerting pressure to ensure that those barriers are removed where they exist.

There is a brief reference to the Cabinet Office exploring whether legislation might be needed, whether the problems of data sharing are not just about cultural barriers and perceptions about what the position might be, and whether there could be some real legal obstacles to data sharing. If that is the case, can the Minister update us on what progress the Cabinet Office has made with regard to data sharing?

Financial accountability is also very important. The Government response was very much that, as we integrate services in a more specific way across a number of different initiatives, the existing system of accountability will be satisfactory. However, there was recognition, I think, that if we move to pooled budgets, which I think the Government were saying was still a little way away, we would need to have a fresh look at the whole question of accountability, given that pooling local authority resources with local police resources and Department of Health resources will involve dealing with all the different systems of accountability for that spending. We have asked the Public Accounts Committee to have a look at this. Given that the Government have recognised that a fresh look will be needed at some point, can the Minister enlighten us on his vision of how a new system of accountability would work?

Finally on community budgets, there is the issue of wider financial concerns. We drew attention to the fact that if the budgets were to work in the long term, a different approach to long-term funding would be needed. We had a response from the Government on that in two different places. They said that

“the Treasury will work with departments to give local public services the same long-term indicative budgets as departments from the next Spending Review”.

That is a fundamentally important statement and one that the Minister might like to say a little more about. If the Government are serious about that, it could fundamentally change the financial relationship between central and local government, and we would like to hear more.

We identified the problem that the body that makes the savings under community budgets may not be the body that spends the money. Local authorities can put a lot of work into youth services, but the costs are saved in the justice system. Very often, of course, central Government make the savings and local government spends the money. The Government talked about the transformation network working to develop locally based investment agreements, but the Committee said—the Government did not really respond to this—that we thought that Departments would have to provide some money up front if they were to benefit down the line. There was not really a clear indication that that message had got across and that the Government recognised that if community budgets were to work—if we were to roll them out—they would have to do some pump-priming. Indeed, we talked about all Departments, not just the Department for Communities and Local Government, recognising that and about having a cross-Whitehall system for incentivising that process—perhaps a top-slice of departmental budgets. I think that Lord Heseltine suggested that in his “No Stone Unturned” report when he talked about nearly £50 billion being put into local growth funds. In the end, we got £2 billion from Government —slightly less than Lord Heseltine had mentioned.

One of the rumours that went round—I do not always believe rumours, but my sense is that there might be some truth in this one—was that Departments were simply pulling up the drawbridge and saying, “We’re not going to give any of our budgets up to this process. These are our budgets and we’re going to spend them as we want.” Despite the helpful responses to a number of the recommendations in our report, not much was said about the need for pump-priming and whether there needed to be a systematic cross-Whitehall basis for incentivising this process.

I shall say a few words about the troubled families programme. The Select Committee was supportive of that and we could see what the Government were achieving. It might be helpful, as I have said previously, to have an update on what progress has been made. We welcomed the expansion of the programme, with 400,000 extra families being brought into it, but questioned whether the increase in the number of families being dealt with was being matched by a proportionate increase in the resources made available. I am not sure that we got a full answer to that question.

What happens to the programme in 2016? Is the intention to roll it on? If so, what will happen to families who have been successfully dealt with by the programme and ticked off, for whom the payments have been made? Will there be any sort of follow-up system to monitor those families and ensure that they do not slip back into difficulty? The Select Committee also asked about sanctions via the payment-by-results system for authorities that had not delivered. The Government response stated that there had not yet been any sanctions. Will the Minister update us on that?

I will probably not be able to tempt the Minister too far down this road, but does he believe that in the longer term, initiatives such as community budgets, city deals—the Committee has been very supportive of those—the local growth fund and proposals from the London Finance Commission might together become a springboard for widespread localism and the decentralisation and devolution of powers and responsibilities to local government and local communities? Might those initiatives, of which community budgets are a key part, come together to form a brave new world—a rebirth of truly independent local government—and does he see himself as the midwife of that process?

You have caught me by surprise, Mr Sheridan. I thought we might first hear from some of my hon. Friends who have a great deal of expertise in this area, but perhaps they will intervene in a moment.

I was a member of the Communities and Local Government Committee for part of the duration of the inquiry, and I found it extremely interesting; indeed, it was perhaps the most interesting of the Committee’s inquiries in which I participated. I congratulate its Chair, my hon. Friend the Member for Sheffield South East (Mr Betts), and all its members on bringing the inquiry to its conclusion and following it through with the Government. My hon. Friend has continued that effective work today by pressing the Minister on the Government’s response. I have read the response, and I believe there is significant scope for the Government to give us further assurance on how far they will go to ensure that the potential of community budgets is realised.

It is worth putting the matter in context. I believe there is a broad political consensus around the community budget approach. The previous Labour Government introduced the Total Place initiative in 2009 with several pilots, and the Treasury produced a report in March 2010 that stated:

“We will work with consistently high performing places to develop a ‘single offer’ for those places. This offer will give places a range of freedoms (freedoms from central performance and financial control as well as freedoms and incentives for local collaboration) for working in partnership with central government to codesign services and arrangements to deliver greater transparency, efficiency and value for the citizen and the public purse.”

The previous Labour Government did some great things during their 13 years in power. In the later years, however, there was a growing realisation that although performance management had successfully improved performance standards across local government, we had begun to see its limits. A new approach was required in which local authorities could take on a community leadership role and more effectively bring public services together.

That is not merely a criticism of the limitations of performance management under the previous Government, but a reflection on how society has changed. When the welfare state was established, the Government of the day were building services from scratch for many people around the country, and they had to bring services together. There were lively arguments when the national health service was founded, and some argued that local authorities could provide those services, particularly in London, where the local authority already provided a substantial number of health beds. Central Government had to inject some real impetus behind Beveridge’s proposals for the founding of the welfare state, and they did so successfully, whether in health services, social care, transport infrastructure or, notably, the building of housing.

Times have changed, however, and local government is in a different position, not least as a result of 13 years of increased resources and support, which my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) was particularly responsible for. The capacity of local government grew over that period, so it was right to set out an ambitious plan for Total Place. It is clear, and disappointing, that the Government’s ambition for the community budgets programme does not match the previous Government’s ambition and enthusiasm for the Total Place ideas. There has been a particular focus on troubled families, and I will address that in a moment.

I was present at some of the Select Committee’s evidence sessions, and I have read the transcripts of others. The report demonstrates a clear consensus that community budgets offer a viable model for public service transformation, and that it is necessary to move beyond the testing phase and implement them more widely. The report considers the second phase of the community budget pilots the Government have announced, and it rightly warns—in the spirit of the remarks of the Select Committee Chair—that the second phase of testing must not be allowed to slow the momentum towards wider implementation. Many areas of the country are already developing integrated models of service delivery that do not have the badge of community budgeting. I fully endorse recommendation 3 from the report:

“The Government must continue to send the clear message to all local authorities that it will support every authority wishing to introduce Community Budgets”.

Although I am sure the Minister will tell us that the knowledge network and the secondments have been helpful in some areas of the country, every local authority faces incredibly tough financial challenges, together with the need to reform and improve public services to deal with other pressures that increase costs, such as demographic change. Local authorities should, therefore, be supported in taking forward community budgeting approaches. I hope the Minister will tell us how the Government intend to respond to recommendation 3 in order to send that strong signal to local government.

The report calls on central Government to facilitate local partnerships and enable local authorities to reshape how central resources are spent in their area. I have a mixed view about that. It is important to tell local authorities that we want them to take the lead in developing networks of support for each other and in knowledge sharing. Indeed, Labour local authorities have been doing just that. The excellent publication “50 Top Achievements by Labour Councils”, which I recommend to Members as good bedtime reading, shows how Labour councils are supporting one another to improve community budgets.

The Select Committee report makes a powerful point about the consequences of not rolling out community budgets nationally. There was broad agreement among witnesses that demands and costs will escalate and services will suffer if community budgets are not adopted around the country. The urgency of the situation is reflected in the Select Committee’s conclusion:

“Without quickly and fundamentally changing the way in which services are delivered by increasing local autonomy and integrating services so as to reduce demand and dependency, the reductions that are made to public spending on local services may simply result in more spending in the future on welfare, and judicial and emergency health interventions.”

Local authorities are already familiar with many of the issues raised in the report because they have experienced them directly. In addition, the National Audit Office and the Public Accounts Committee have published useful reports on the matter, on which the Communities and Local Government Committee drew. The significance of its report lies in the clear message that community budgeting is the way forward for public services.

It is now widely accepted that the existing public sector architecture does not lend itself well to addressing the complex challenges currently faced by local and central agencies or to the kind of relationship we should seek to develop between local and central Government in the coming years. Indeed, the Chair of the Political and Constitutional Reform Committee, my hon. Friend the Member for Nottingham North (Mr Allen), has led some excellent work in that area. Governments have experimented with integration in the past, but the urgency of the present financial situation necessitates the immediate transformation of services. Many authorities know that community budgeting approaches offer a viable solution.

We should acknowledge that in recent years most, if not all, councils have developed practice that we could identify as community budgeting—bringing services together—whether or not the Government recognise that from their more limited view of pilots. When I was a member of the Communities and Local Government Committee, we faced a challenge. We were trying to impress on advocates of community budgets, particularly those with direct experience of them, the urgent need to demonstrate very clear evidence that could persuade the Treasury and the current Government.

I also wanted those advocates to persuade my colleagues in the shadow Treasury team, who I very much hope will be moving into that building across Whitehall in 16 months’ time. Those with experience must persuade the right people that if money is moved within the system, we can both generate savings and significantly improve outcomes. We must also look at whether that can be done in-year, within a three-year period or a five-year period, and so on.

We should consider very seriously the call for a longer-term funding settlement from the Local Government Association in its document “Rewiring public services.” That would reflect a growing trend—for example, three-year spending statements and past experiments with public service agreements—and be a clear acceptance of the fact that local government needs more financial certainty. It has been given a kind of certainty by the current Government—principally, it has known that its funding is going to be massively reduced. Local authorities with the greatest need in the most deprived areas of England know that they will lose six times more a year than the 10 least deprived local authorities, compared with 2010-11.

The situation makes the challenges in places such as Liverpool, Birmingham and Middlesbrough even greater than in places such as West Oxfordshire, Wokingham or Dorset that have, in some cases, received an increase in Government funding at the same time as most local authorities have faced massive cuts. That is why it is particularly important for Opposition Members to show that we will embrace community budgeting approaches.

It is worth noting that the Government have made progress following the significant troubled families programme. That programme builds on the great practice of the last Labour Government. Indeed, my hon. Friend the Member for West Ham (Lyn Brown) recently wrote a paper, which I would encourage all Members to read, that looks at not only the Government’s current troubled families programme but where it came from.

The previous Government invested hugely in Sure Start, for example. Schemes such as Think Family were forerunners of the Government’s family intervention programme. The Government inherited a well trained work force, and family intervention projects in certain areas of the country that would now be considered part of the Government’s programme were already up and running in the vast majority of councils, due to extensive investment to combat youth crime, as well as other initiatives.

The Government say that their programme has been a real success, based on early results and judged against their own criteria: 92,000 families have been identified, 62,000 families are attached to the scheme and 22,000 families are deemed to have been turned around. I note, however, the recent National Audit Office report that says that the right families are not being targeted. We should all be concerned about that, and I hope the Minister will have something to say about it. The NAO report said that

“there is a mismatch between the criteria the Department used to calculate the total number of families at which its programme is targeted, and the criteria for identifying the families in each local authority and then rewarding positive outcomes”.

The report showed that payment by results, which pays 80% on attachment and the rest on success, is being diverted by cash-strapped councils into other services as it is not ring-fenced. We should not criticise local authorities for that, or be too surprised, given the scale of the cuts they face, losing up to 40% of their central Government grant. However, the Government must acknowledge that, in practice, that is what is happening with its troubled families programme in many areas of the country.

The NAO report questions whether the achievement of the criteria for success really means that a family is turned around. The families in question have, by definition, complex and long-term problems. To claim that they have been turned around by fulfilling just one criterion in a six-month period is over-optimistic. It shows hubris on the part of the Government in their understanding the nature of the families, the experience of 30 years of very significant investment in some of these families around the country, and the difficulty of genuinely turning lives around. The single criterion could be having come off out-of-work benefits into a job in the past six months. Families obviously must have improved on a number of levels to make that a possibility, but what is still unknown is the families’ longer-term fate and whether they stay turned around if, for instance, that job is lost.

What happens once the council takes away the money for a turned around family? Some local authorities have good step-down support, but what happens after the intensive work is concluded? Does the truanting and antisocial behaviour continue at the reduced level, or does it go up? Is the job gained a job maintained, or does the family fail again? Is support withdrawn, meaning that it becomes impossible to sustain the effort needed to stay employed, given that some core problems in a family may remain unresolved? Can a family be called “turned around” if truanting and antisocial behaviour continue at any noticeable level?

My hon. Friend the Member for West Ham has undertaken research that suggests that more than half of all councils are not tracking the families that have successfully—according to the Government’s own criteria—completed the programme. There is a clear need to evaluate the programme. Indeed, the Select Committee report does consider the troubled families programme, and there is a growing body of evidence—I have mentioned the NAO report—that throws up as many questions as answers about how confident we can be in its effectiveness.

I hope that the Minister will confirm that his Department will undertake further evaluation and start to answer some of the long-term questions about the programme. It is a relatively new programme, so we do not yet know what will happen if a family needs further intervention. We do not even know whether the Government, the local authority or other public sector partners will be aware of where further intervention is required.

I want to close by saying a little about what the next Labour Government will do if we are successful at the next general election. I hope to answer some of the questions asked of the current Government by my hon. Friend the Chair of the Select Committee, but also to indicate what the future may hold. Indeed, my hon. Friend will be part of shaping that future because of his expertise and work such as the report we are discussing. I read his recent article in a Smith Institute pamphlet, which set out his ambitions for a future Government; I hope to give him some confidence. Of course, we will not be able to stop the clock or turn back the tide of cuts, but we can offer hope to local government that we both understand the depth of the financial challenge that councils face and are committed to finding a way forward.

We will start by putting fairness at the heart of the relationship between central and local government and into our approach to local government finance. We will acknowledge the difficulties that councils face, not try to sweep them under the carpet. We will respect the decisions that councils make at a local level about how to use resources, not criticise and carp from Whitehall. As my hon. Friend the Chair of the Select Committee said, the current Secretary of State carps about everything from the levels of reserves to bin collections, while masquerading as a localist.

We will review the funding formula. I thank the LGA for its excellent briefing on this debate, and also for its report “Rewiring public services.” We have looked at that, and if local government can come up with a united position on a fair settlement, we would of course take that into very serious consideration. The proposals the LGA put forward for five-year settlements, which are designed to give councils stability, are particularly important in the context of making community budgets a reality. In principle, we want to work with the LGA to take those proposals forward.

The LGA has some other very interesting proposals, such as local treasuries—the idea of local public accounts committees—which could be very valuable in driving community budgeting approaches around the country. Again, we will look to work with the LGA to develop those proposals and see what we can usefully make of them, and how effective they could be.

Of course, the next Labour Government will want councils to meet the needs of communities, be they in adult social care or raising educational standards. However, we have no intention of returning to the tick-box approach of the past. Our approach will be based on partnership underpinned by fair funding, and we need to work with local government to develop the architecture for that relationship. That means there needs to be some accountability that works both ways. However, this Government’s approach has swung the pendulum so far that the positive aspects of the previous architecture have been lost.

My hon. Friend the Member for Derby North (Chris Williamson), who is here today, and I recently served on the Committee considering the Local Audit and Accountability Bill. We were very disappointed that the Government’s proposals for the future of local audit fundamentally missed the point about the potential for transforming local public services. The Government failed to see how local value-for-money work, for example, could be a driver of local public services working together. They also failed to see that although we support combined authorities, city deals and other initiatives that bring local authorities together with local public service providers—initiatives that are at the forefront of the community budgeting approaches of authorities such as Greater Manchester—we need a system that follows value for money and that audits local authorities in such a way as to assure the public that money is being spent well, and which is that crucial driver, particularly given Whitehall’s resistance to the joining up of local services.

The English deal that we propose will support councils to deliver economic growth in all areas of the country. It will be about devolving powers over housing, planning, jobs and skills. However, we need councils to come together to decide how best to use those powers. Local economies differ, so we will not set down a model from Whitehall. Instead, we will ask local areas to develop their own local arrangements.

It would be helpful to hear from the Minister on some key points. For example, do the Government intend to reinstate the localism audit? That was a welcome and interesting initiative, even if it was a little charitable in its assessment of how localist some Departments were. I note, however, that it has been dropped. Instead we have other programmes, such as the major reform of probation that is now being pushed through, and the Work programme, which was commissioned across nine areas of the country. Also, following the abolition of regional development agencies, their powers—including their spending powers—were not placed with local government, despite the proposals involving local enterprise partnerships. Instead, those powers have been drawn to the centre. All of that activity has worked against the idea of community budgets.

That is why we will take forward our work on, for example, local authorities co-commissioning the Work programme, because we recognise the great potential of community budgets. It is also why our work to ensure that we genuinely reform the health and social care system, so that we have whole-person care, is absolutely vital, both for local authorities and central Government, to give the drive that is needed.

I congratulate the Communities and Local Government Committee on producing this report and securing this debate, and I look forward to hearing the Minister answer the many questions that have been put.

Thank you, Mr Sheridan, for calling me to speak. It is a pleasure to serve under your chairmanship today.

First, I thank the Communities and Local Government Committee for securing this very important debate, which, ultimately, is on the way that public services can, and I would argue should, be delivered in the future. I particularly thank the Chairman, the hon. Member for Sheffield South East (Mr Betts), for the Committee’s delivering an excellent report on the community budget pilots. It highlighted the importance of ensuring that the pioneering work of those pilots is adopted across the country.

Before I turn to the Chairman’s well thought-out and strong speech, which touched on many issues that, as he rightly said, we agree on, I will just deal with a couple of the issues raised by the hon. Member for Corby (Andy Sawford). He said relatively little about the topic of the debate—community budgets—and went into asides on local government finance and other issues. I suspect that he had little to say about community budget pilots because he believes we are doing the right thing. I know that on many such issues there is cross-party agreement, but on some, there is not, and I will come back to all those later.

The hon. Gentleman raised an issue in respect of which I must put something on the record. I think he said that there had been increased resources for local government under the last Government. I will put to one side the question whether that indicates that he shares the shadow Chancellor’s view that more borrowing and more debt is the way forward for this country, even though that was what got the economy into difficulties in the first place; I would not tout that as a good approach. However, he was somewhat remiss in not reminding us that council tax basically doubled under the last Government, hitting hard-working people hardest.

The hon. Gentleman represents an area that has a couple of the most deprived wards in the country, and which received the highest top-up in the country from this Government after being left with a black hole because of the last Labour Government’s decision on the working neighbourhoods fund. It is important to remember that the councils that are in the toughest positions and that have the highest levels of need, which he outlined, are also those that have the highest spending power per household in the country.

However, I appreciated the hon. Gentleman’s comments about the report, “50 Top Achievements by Labour Councils”, which he recommended as bedtime reading. I would not be so churlish as to suggest that when I am struggling to get to sleep, it might well help. However, I will happily have a look at a copy and keep it under the coffee table for the future.

I come now to the serious and key point of the debate. There are some issues on which we disagree—I will come to those later—but on many we agree, as the Chairman of the Select Committee said himself. Crucially, we agree about what we want to achieve, which is a transformation of public services for, and better outcomes for, residents. Our constituents deserve better and more cost-effective services that are designed to meet their needs. As I think the Chairman of the Select Committee said, we should be able to get more for less. I agree, but at the moment not all organisations are delivering in that regard.

It cannot be right that our elderly residents should find themselves in hospital because of a lack of support to live independently at home. Not only would they rather be at home, but supporting them in the community and thereby reducing hospital admissions will save the taxpayer money—exactly fitting the point made by the Chairman of the Select Committee.

It is also not right that a family in need of support should be contacted by countless different public sector organisations, all acting independently of one another. This confused approach does not help family members to get work, stay in school or stay away from crime, and nor does it help them to achieve the right outcomes. It means that the costs of antisocial behaviour, crime and unemployment continue to fall on the taxpayer. The family, and taxpayers, would be far better served if those organisations could come together to provide integrated services designed around the needs of the people who use them.

As the Committee’s report highlighted, the pioneering work of the community budget pilots proved that that is possible and is already happening. Cheshire West and Chester’s early support team brings together social services, police, probation, health and other services. Let me give just one example. A young mother—let us call her Emma—visited a children’s centre to ask for help with benefits and some family support. Separately, she had called the police after her partner, following an all-day drinking session, had violently attacked her. Both these incidents were picked up by the early support team, and following a 360-degree profile of the family, they discovered that Emma’s partner had a history of domestic violence and that probation had previously judged him to be a risk to children. By working together, these agencies were able to identify quickly that Emma’s children might be at risk. Under the old way of working, the children’s centre would have known only what Emma had told them, and she had not told them about her violent partner. Under the old system, it might have been weeks, even months, before family workers realised how at risk Emma and her children were. That is not helpful and it is not right, and it is what none of us wants to see.

The Government wholeheartedly support change and that type of approach. We want to see that approach being adopted by every local area, so that everyone in our country can benefit. That is why we have put in place the support to ensure that others can build on what has already been achieved. Thanks to the hard work and evidence provided by the 12 neighbourhood community budget pilots, we have committed, for example, an additional £4.3 million “Our Place” fund for 2014-15, so that at least another 100 areas can design services with their communities.

The Select Committee called for the Government to provide pump-priming funding to ensure that the community budget approach was implemented more widely, and that is what we have done. Others have suggested that the Government have paused that work until after the next election. Clearly, that is not correct. We have already provided a £6.9 million transformation challenge award, which is helping partners in 18 councils work together to deliver better services.

I am encouraged by the Minister’s remarks on Departments working together. I shall just pick up on the point made by my hon. Friend the Member for Sheffield South East (Mr Betts), about how successful the Minister’s Department has been in persuading other Departments to break down the silo mentality. Ever since I have been involved in, or had an interest in, local government, breaking down the silo mentality has been the holy grail. Will the Minister say how successful he has been in breaking down silos?

I thank the hon. Gentleman for his helpful intervention, which gives me a chance to highlight how this is a whole-Government approach. If he will bear with me, I will, in a few moments, outline how Departments are coming together to ensure that these things are being delivered, as appropriate to the local area.

The funding from the transformation challenge award will, to name just a handful of projects involved, help to improve children’s services in south-west London, integrate emergency services and speed up response times in Surrey, and reduce crime in Cheshire. We have announced various measures further to support transformation, including a £100 million new collaboration and efficiency transformation fund and new flexibility to allow £200 million of capital receipts to be spent on the one-off costs of service reforms. In addition, in 2015-16, £30 million will be available for fire service transformation, £50 million for police transformation and £100 million for innovation in education.

The whole-place community budget pilots also highlighted non-financial barriers to partnership working, such as difficulties of data sharing, as the Select Committee Chairman rightly mentioned. I share his concerns about and frustration at the potential for real progress and change to be blocked in that way. I am determined that this Government will find a way through these myriad difficulties. Historic breakthroughs have been made in data sharing by the Troubled Families programme, for example, through which Department for Work and Pensions data have been safely shared with local authorities. Barriers to data sharing are as much to do with people’s perception of legislation as the legislation itself. For example, the “Data Sharing Act” might have been a better name for the Data Protection Act 1998. In working with fire and rescue authorities, which do great work in their communities, we often find that we need to weed out mythical understanding of something in that Act which somebody in a particular authority has found, to ensure that we get data sharing working correctly.

Might I share with the Minister my experience a week ago, when visiting staff at an early years centre in Greenwich? They spoke movingly about the difficulties they had in getting information that they desperately need about certain families from the mental health trust in the area. After talking to the mental health trust about that, to try to overcome this blockage, it became clear that the Minister’s point is exactly right: there are different understandings of what data protection requires, and there certainly is a long way to go to get different organisations to accept that sharing responsibly and within the ambit of the data protection rules is essential to getting good quality services, and to protecting people.

The right hon. Gentleman makes a fair point, and I have had experience of this. One really good example of data sharing involves Cheshire fire authority, which has put a lot of time and effort into breaking down barriers, getting to the root of what really can be done, and getting on with it. It is useful in a debate such as this for Members from all parties to spread the word—when people read Hansard as bedtime reading, or over the weekend—so that people appreciate that such things can be done if they want to do them. The Act needs to be read properly, so that it is not misunderstood or misinterpreted by anybody in an authority.

Little things, simple things, can make a difference. In Hertfordshire, a group of people consisting of representatives from the fire authority, the county council, the police and social services works together in the same room. That has broken down barriers and has got through to people, enabling them to understand things better and allowing for much better data sharing.

Whether barriers are real or imagined, we have committed to improve data sharing where it will improve services for residents. We are setting up a centre of excellence for information sharing and exploring options for legislative changes.

The pilots also told us that their attempts to work with partners were sometimes hindered, as Members have outlined, by uncertainty about future funding. As a result of these concerns, the Treasury is working with Departments to give local public services the same long-term indicative budgets as Departments, from the next spending review. One key characteristic of the whole-place community budget pilots—why they succeeded where past attempts did not succeed as well, or failed—was the close co-operation between central and local government. As the Select Committee’s report makes clear and as the hon. Member for Corby said, the pilot areas highlighted the importance of Whitehall secondees working alongside them, helping to change the way central and local government work together, and helping to bridge understanding of how both sides work.

I welcomed the Treasury’s looking at whether it can give local authorities more of an indication on medium-term budgeting than they currently have. As part of that process, will it also be the Treasury’s job to look at how far, during the spending review period, Departments will be expected to contribute a certain part of their budget to the community budget process?

The Committee Chairman tempts me to prejudge what the Chancellor may decide, but he will understand if I resist him for now. The Treasury is looking at the issue and understands the importance and benefits of long-term work and giving budgets in the way that I have outlined.

I am grateful to the Minister for giving way again; this is my last intervention, I hope, subject to what he says. In relation to long-term certainty, working together and sharing budgets, does the Minister agree that there is a need for much greater investment in social care? Is thinking about that being done in Departments? Investing in that would save spending further down the track, by preventing people from going into much more expensive hospital care or long-term nursing care. To make savings in the future we need to invest in the present, and that means putting a lot more resources into social care. Does the Minister agree? Can we be confident that the thinking being done will deliver that?

I will not hold the hon. Gentleman to his promise about that being his last intervention; I would not want to curtail any further insights. He does not make an unreasonable point. I will mention the important issue of social care and where it may lead in a moment; it is linked in respect of the better care fund, for example. However, as I said in opening, it is true that if we can have a better service up front, people might not necessarily need emergency and hospital care. That would be better for them and mean lower costs for their areas. The Committee Chairman mentioned the potential for being a midwife; if my Department in its current format ends up being the midwife to public services working together in future, I will be proud of what we have achieved in our time in office.

The pilot areas highlighted the importance of the secondees. The Government are committed to the approach, which is why we created the public service transformation network, which has 30 officials and counting seconded from around Whitehall and local government. They are now working with the nine new areas, but they are not the be-all and end-all. It is a rolling programme. The secondees are helping the areas to learn from the pilots and quickly create a better outcome for service users; it is an evolution of what the pilots delivered.

Some areas are picking up themes similar to the ones the pilots picked up. Each area has its own focus, depending on its circumstances and the needs of its local residents: localism in its true sense. In Bournemouth, Poole and Dorset, the focus is on integrating and improving services for elderly residents and for those with mental health or learning problems. Better support for those seeking employment or training is the priority for partners in Lambeth, Lewisham and Southwark, and for the six boroughs within the West London Alliance, which are working superbly well together to deliver there.

I have already mentioned Surrey’s plans to integrate local emergency services, as Northamptonshire has done, but it also wants young people in their area to receive better training and education. In Swindon, partners want to create safer communities and, in particular, give better and more co-ordinated support to victims of domestic abuse. Residents in Bath and north-east Somerset could benefit directly, with more money in their pocket, thanks to the work of local partners and the Department of Energy and Climate Change to improve energy efficiency in local homes.

I have barely begun to scratch the surface of the work going on in those places. I urge colleagues to take a close look at those projects when the network’s website is launched in just a few weeks’ time. People might see something that they think should be happening in their own constituency; that touches on the point raised by the right hon. Member for Greenwich and Woolwich (Mr Raynsford) on sharing data and best practice. Better services are not the preserve of people living in pilot areas or in one of the nine areas that are working intensively with the network. Those areas are there to share best practice. We want to learn from them and to see other areas move, too.

I agree completely with members of the Select Committee that local areas should not be held back or discouraged from proceeding with service transformation. Much of that can be done without any assistance from central Government, because it simply requires local partners to sit down, forget their differences and focus on the outcomes for residents. Partners in Staffordshire, Leeds city region, Blackpool, Tyneside, Cornwall and Suffolk are getting on with plans to improve services for residents, and others can do the same. Much can be learned from the excellent work in Suffolk, where the county council is working with district councils to share management and services. If there are barriers, gather evidence and let us know. We have already shown that we are ready and willing to aid the process by changing the way government works.

I want specifically to address the idea that the work of the community budget pilots is somehow unconnected with other important areas of policy or that big Departments are not engaged. We must not get caught in the trap of thinking of community budgets and service transformation as an initiative cut off from other Government projects, work and reforms. The principle of neighbourhood and whole-place community budgets is simple; it is about partnership working across public services, local and central, to create not just cost-effective services but services designed around people rather than structures and organisations. The same principle is at the heart of the troubled families programme, the integration of health and social care budgets, the pooled local growth fund and many more areas of work; it is not a top-down exercise. We are working closely with local partners and others on the design of the expanded programme.

The troubled families programme, for example, is being extended, as the Select Committee noted, to an additional 400,000 families over five years, with £200 million already committed for the first year in 2015-16. The hon. Member for Corby asked about the assessment of the programme, which is subject to a three-year independent evaluation. Initial findings are due later this year.

On health, it was partly thanks to the hard work and the evidence provided by the four whole-place community budget pilots announced by the Government that we could develop the £3.8 billion better care fund in the spending round. Health and social care services are already working together to ensure that our elderly residents receive the support they need to stay at home and out of hospital. We have also established a network of 14 integrated care pioneers that will, like the community budget pilots before them, work closely with central Government to develop the solutions that others can then adopt. Locally led public service transformation also has the potential to promote economic growth.

Although I understand that the Select Committee and the Essex pilot are disappointed that not all of Essex’s whole-place proposals were adopted—the Essex pilot was particularly commented on—it is possible that such areas can do far more within existing Government policy. Essex has done great work in establishing an employment and skills board that involves local employers and skills providers, and the board’s labour market intelligence has already influenced millions of pounds of capital investment by further education colleges.

A number of the nine new places are reviewing how skills and employment support is provided, and the network is working with the Department for Business, Innovation and Skills, Jobcentre Plus, the Skills Funding Agency and the Department for Work and Pensions. Again, the support is not just for the select few.

The Minister is right to say that the Select Committee drew particular attention to the Essex problem—or the BIS problem, as it should probably be called. He has given a long list of things that Essex has been able to do, but the people from the Essex pilot were clearly concerned when they came to give evidence to the Committee. Will he take the Committee into his confidence and indicate precisely what BIS did when those points were put to it? How did BIS respond? What commitments has BIS given to change?

There is still a lot that Essex can do within the abilities and powers that it has been given. We arranged a meeting with BIS directly, which I think has now happened, but I will pass on the hon. Gentleman’s message and ask BIS to respond directly to him on where it is at.

The Government have invited local areas to make public service reform proposals as part of the local growth deals, which are currently being negotiated with the cross-Government local growth team. We have also provided an extra £10 million a year for Jobcentre Plus, working in partnership with local authorities, to help young people find apprenticeships and traineeships. I hope that we can all agree that the focus on better outcomes, which is at the heart of the community budget pilots, is evident across all Departments and all parts of the public sector.

Members asked, “What exactly is there?” The network has 30 staff and a budget of £2 million. The network is accountable to Sir Bob Kerslake, but it reports to Ministers in the Department for Communities and Local Government, the Cabinet Office and the Treasury.

The Chairman of the Select Committee made a point about localism. The community budget pilots, the transformation network and some of the great work being done by councils across the country to bring public services together and to get on with changing how we deliver services for the better—this is what really matters—proves that the power the Government have devolved to local communities and local councils goes way beyond the central process that we had in the past. That is a revolutionary change that, hopefully, local government will grasp and take forward. It would be wrong for us in central Government ever to pretend that we have taken a vow of silence on what we think of certain decisions or on pointing out good examples of best practice for providing residents with the great services that all taxpayers deserve.

Whether for weekly bin collections or any other service that the council provides. I suggest to the hon. Gentleman that most council tax payers would expect, at the very least, to have their waste collected in a good and weekly manner.

I welcome today’s thoughtful debate. We can all agree on the critical need for public services to work together in the interest of residents, service users and taxpayers. The community budget pilots showed how local services can be transformed. Continued commitment and strong leadership, both locally and centrally, means that everyone can benefit. There is an opportunity to see something different and something better for our country. I hope that local councils will take a grip, make the most of it and deliver for all our residents.

I thank the Minister and the shadow Minister, my hon. Friend the Member for Corby (Andy Sawford), for their responses to the report. We have had a good, positive debate with a lot of agreement. I said at the beginning that the Minister would probably not have time to respond to all the questions that I raised. I am sure he will write to me afterwards so that I can share his responses with the Committee.

The report was supported by the whole Committee, as our reports generally are. There is clear agreement that, through the community budget process, the available money can be spent better. Perhaps more importantly, the individuals who receive services will get a better deal. They will get more joined-up and integrated services and less waste and confusion.

To develop the approach across the country, we welcome the development of more pilots, but we want to see a clear plan for how the community budget approach could be rolled out across the country. I am not sure that I heard that from the Minister. Where does he think we will be in five years’ time? How will we get to a situation in which the approach can be rolled out across the country in that period of time? I do not think that five years is too optimistic a target.

I re-emphasise the point that local government is up for and wants community budgets. The Minister and his colleagues in the Department are entirely supportive of community budgets, but if they are to work the whole Government and all Departments need to be involved. There are still one or two question marks about that.

I will finish with a quote that my hon. Friend the Member for Corby has already partly pre-empted. This is the final comment of our report:

“Without quickly and fundamentally changing the way in which services are delivered by increasing local autonomy and integrating services so as to reduce demand and dependency, the reductions that are made to public spending on local services may simply result in more spending in the future on welfare, and judicial and emergency health interventions.”

That says it all. It is why the community budget process is so important and why we need it to be rolled out across the country as soon as possible.