A roll out of service integration on the scale envisaged by the Whole Place Community Budgets programme could save up to £7.9 billion. Yet the pace of integration between councils and their partners has been sluggish. With a recent LGA survey suggesting councils have reached the “end of the road” in finding efficiencies, what steps could central government take to encourage local authorities to realise the benefits of integration?
Central government support for integrated services is stronger than ever yet take-up is still slow
It’s not new for public bodies and their partners to agree to pool budgets and work jointly towards a shared plan to tackle either a specific issue or help a defined local area. Both Local Area Agreements and Total Place under the last Government have blossomed into Community Budgets, the Troubled Families Programme and the Better Care Fund today. Clearly pots of money are available to back schemes, underwritten by the supporting work of the Public Services Transformation Network which was set up by the Government to share best practice. However these programmes collectively have not led to rapid growth of integrated services across the country.
The slower than expected pace of integration is surprising given the range of forces in its favour. Evidence of success, cross-party political backing, cash to grow, and advice to support, should prove a recipe for success. But on the ground, surprisingly few authorities are dipping their toes in the waters of integration, let alone plunging in head-first. One recent survey found that only 2 per cent of authorities had integration “fully operational” for any services in their area. Whilst there are many local obstacles to integration – lack of leadership, staff capacity, silo cultures, incompatible IT hindering data sharing – the financial relationship with central government was cited as the number one barrier.
So what more could central government do?
Keeping the swimming pool analogy going, what can central government do to warm up the water in order to make service integration flourish across the UK? We’ve identified 3 steps the central government could take.
- Align budget timescales. As the Public Accounts Committee has highlighted, central government should look to reform the way funding flows from central government to the wider public sector to allow joint financial planning between organisations wanting to integrate. X local authority finds it difficult to pool budgets with Y Clinical Commissioning Group (CCG) to tackle Z social problem because the CCG only has sight of their funding one year ahead. Funding timeframes could be better aligned.
- Ensure reward matches investment. 80% of savings from Community Budgets accrue to central government. As LGA Leader Merrick Cockell has said, whilst a council and their partners make the initial investment in integration, “the apple falls on the Whitehall side of the garden fence.” Essex County Council has suggested ‘place based’ financial settlements are required to allow savings made locally to be retained locally.
- Balance carrot and stick to ensure departmental buy-in. Both of the above steps show service integration locally requires devolved budgets centrally. But this only works if central government departments are willing to play ball. An analysis by the National Audit Office found varying commitment across central government toward collaborative working with six departments rating themselves as ‘weak’ at working collaboratively. HM Treasury should consider fulfilling their pledge to the Public Accounts Committee to hold back a proportion of money from future budgets, with access conditional on departments sponsoring locally integrated services.
No pain, no gain
This isn’t to say any of the above reforms are easy. The recent discussions between the Department of Health and the Cabinet Office over the Better Care Fund reflect how complicated it is to get integrated services right – particularly those which depend on pooled budgets at a time of public sector cuts. However, the potential service improvements and financial savings make the battle look worth it. The three steps outlined above could provide a strong nudge in the right direction.