Five areas of England are to test ways that pooled budgets for service provision can deliver better results for residents and do so more cost-effectively.
The plans, confirmed in HM Treasury’s Autumn Budget Red Book, hark back to the last Labour government’s Total Place project, which encouraged the development of cross-cutting approaches to the way public funds are used to tackle particular issues.
According to the Treasury, the new drive will see the launch of five pilots at mayoral strategic authorities to explore the use of place-based budgets.
It said the pilots will “test how the pooling of public-service budgets in local areas could break down siloes, unlock more funding for prevention and help deliver better outcomes for taxpayers”.
The Treasury did not identify which of England’s mayoral strategic authorities will be taking part in the pilots. However, it said the exercise would run alongside work with Greater Manchester’s “Prevention Demonstrator”, which includes looking at the potential of budget pooling.
Thirteen areas took part in the original Total Place programme, which launched in 2009 but was scrapped by the coalition government following 2010’s general election.
Areas began by counting how much public money was spent on services such as schools, social care, health, criminal justice, employment-support and transport. They then chose specific areas to focus on to explore how funding could be better spent.
Birmingham looked at issues affecting young people and their development, including the impact of gang violence in the city, and concluded it could save more than £100m over the course of 15 years through radical service redesign.
In February 2010, then-communities secretary John Denham told the Guardian he believed the Total Place pilots signalled the potential for £20bn of savings in public-service delivery over the course of the next decade.
Earlier this year, Denham and think tank the Institute for Government made separate calls for a Total Place 2.0.
In a paper in May, the IfG said pilot areas for Total Place 2.0 should establish collaborative governance structures and count spending across all services that are “willing to cooperate”, with a view to designing place-based budget plans for the 2027 Spending Review.
The think tank said work should involve collaboration with communities to “identify outcomes that align with central government’s priorities and agree how best to spend pooled money to achieve those goals”.
Reacting to Wednesday’s announcement of the new place-based budget pilots, the IfG said: "It appears the government has realised that gripping public services’ spending too tightly results in poor value for money. A shift towards more local control should be welcomed but must be radically scaled up at the 2027 Spending Review.”