Community Budgets in Greater Manchester

Partner Briefing Note Number 1: December 2010

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The Coalition Government announced the development of Community Budgets in October’s Comprehensive Spending Review. The intention is to improve the way public services and local communities respond together to some of the most challenging issues in society - going further with joining up resources than previous policies and programmes have. The headline is:-

Greater Manchester has been selected as one of 16 areas which will develop the first phase of Community Budgets focused on improving our response to families with complex needs. Government is also working with a further 20 areas on issues such as worklessness, reducing offending and Child Poverty.

The Prime Minister is expected to announce details of the programme in mid March 2011 following detailed work and negotiations with local areas.

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The success of Community Budgets depends on the active involvement and support of a wide range of partners and local communities. This briefing is the first in a series that will provide information and updates about Greater Manchester’s approach to Community Budgets. This first edition sets out:-

  • How Community Budgets can help Greater Manchester achieve its ambitions
  • A vision of how Community Budgets could work
  • An outline of the work involved in ensuring Community Budgets deliver
  • How partners can get involved in the process.

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Local Authorities and public and private sector partners in Greater Manchester are committed to making sure that all of the area’s residents, including its most disadvantaged can play a part in the economic growth of the City Region. This is a major part of the Greater Manchester Strategy.

In practice this means that for many individuals, families and neighbourhoods, public services must work closely together to deal with high level needs and demands on service. The issues involved can be complex and can sometimes impact generation after generation. Examples of this include making sure children do well in their early years, supporting families, tackling unemployment and breaking cycles of offending – all issues usually linked to poverty.

The ability of public services to work more flexibly to deliver joined up services for people and places that need them can be restricted by national controls, expectations and targets. This can affect the issues services are required to focus on, whether information can be shared and whether funding can be pooled or used on non traditional types of service.

The intention is that Community Budgets will help to deliver more local control on how local services use resources, and less restriction about what services can do at local level. In turn this will help us to deliver more joined-up support and help to achieve better outcomes for people and for Greater Manchester as a whole.

The other major role that Community Budgets can play is to help manage the challenge of spending reductions which all public services are facing. This is particularly important as services can spend disproportionately high amounts of funding trying to deal with these complex issues. The potential financial benefits of Community Budgets can work at a number of levels:-

  • Reducing the demand for public services, and especially for acute and expensive services, by focusing more on early intervention and prevention;
  • Supporting people into economic activity, reducing benefit costs and helping create economic growth and more jobs;
  • Attracting investment from Government and other sources because of confidence that it will be used effectively;

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Community Budgets can be good for the residents of Greater Manchester, good for public services and good for Greater Manchester’s economy. Our challenge now is to ensure we deliver on this potential and to make sure that Community Budgets take us further than we have gone before on joining up support for people and places.

We know from experience that there are some key ingredients that can deliver successful outcomes for individuals, families and neighbourhoods with more complex needs. The types of approach to delivery that we need to grow and embed through Community Budgets are approaches that:-

  • Provide integrated and targeted support, focusing on whole families where necessary;
  • A focus on prevention and early intervention when issues arise – as early as possible.
  • Empower and require ownership and personal responsibility from users of services (an example of this is personalised budgets for social care services);
  • Involve an active role for local communities to support delivery (for example tackling attitudes to worklessness and crime);
  • Use peer influences (e.g. positive male role models, rehabilitated offenders/ addicts);

In terms of joining up delivery on the ground, we have learned that the following are critical to success:-

  • Shared goals and joint planning and investment between agencies
  • Effective leadership and management
  • Effective tasking and coordination at local level
  • Joint systems for sharing data, joint assessment and case management;
  • Co - location of services (if part of wider integration of systems);
  • Access to flexible resources to remove barriers;

We also know that in focusing on joint responses to key points in people’s lives we can make a big difference to outcomes. Examples of this are successful engagement with early years support, moving from secondary school to employment, education or training, moving from unemployment back to work and release from prison. It is also necessary to focus activity on people who are more at risk of poor outcomes than others, for example Looked After Children and people from groups who experience particular disadvantage.

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At the heart of the response we have to develop is a new way for public services in Greater Manchester to invest together in priorities that they share. This must go further than our existing partnership activity. The new model needs to provide strong incentives and robust accountability arrangements for Local Authorities, partner Agencies and Government Departments to work together, achieve outcomes and share risks and rewards.

Community Budgets can be a way for partners to use one-off funding in new interventions into ongoing reductions in revenue budgets. It can help manage the challenge of understanding and allocating savings across agency boundaries (i.e. what one service does providing financial savings for another) and it can also enable a longer term view of the value of investments – avoiding time lag problems.

The focus must be on finding transformational ways to improve outcomes and reduce costs – not just making more efficient what we do now. It will require a commitment to scale up effective ways of working and to withdraw less effective approaches to make way for new approaches. Understanding the costs and benefits of interventions will be crucial and work is under way to develop a model for this.

In practice a Community Budget could operate like this and is summarised in the diagram overleaf:-

Establishing a single joint investment fund - created through agreement with Whitehall Departments and local public service partners and possibly private sector partners. This could include a number of models, including:-

  • Grants/funding streams agreed with Whitehall on the basis of results to be achieved and agreement on the proportion of savings to be retained. For example the Government is seeking to provide an early intervention and prevention fund to support Community Budgets which would require an agreement on what would be achieved and how savings would be distributed. This may include an element of up - front investment to scale-up interventions and then the costs would be repaid as the results are achieved.
  • Alignment of local resources to deliver with agreement from Government about savings to be retained. This is likely to require the removal of barriers to enable funding to be used flexibly at local level.
  • Third party financing for example from the private sector or new models such as Social Impact Bonds involving agreed commercial returns on investment

Targeting key joint challenges - where all of the partners have an interest and role to play, and where there are high costs involved in a particular issue. For example tackling complex families, improving early years outcomes, tackling child poverty, reducing worklessness and reducing offending rates. The process should be driven by a clear view of the evidence base for ‘what works’ in dealing with the issues concerned. This must be a guiding factor in decisions to fund interventions, whilst allowing room for innovation.

Funding interventions- to provide a financial kick start to get new ideas off the ground and secure agreement about how existing partner resources will be flexed to support and deliver the intervention. For example agreeing how Police or Jobcentre Plus or Local Authority services will contribute to delivery on the ground. The business cases for specific interventions will be tested through a ‘gateway’ approach to determine the likelihood of achieving the specified outcomes and hence producing financial returns. Funding or loan agreements will need to apply to each intervention, based on the type of investment

Basis of ‘dividends’ and mainstreaming agreed at the outset - about how the intervention will be mainstreamed after an agreed period if it is successful. This will be linked to modelling of which agencies are likely to receive the financial benefits if the approach is successful for example through reduced demand for services. Savings could be distributed to Agencies, Government, and Communities and reinvested to replenish and grow the fund.

This may also need to take into account increases in demand and cost to some agencies that could be caused by a successful intervention (for example successful engagement in employability programmes could lead to a greater demand for childcare).

Evaluation, roll out and de commissioning - robust evaluation and cost benefit analysis will be applied to all interventions. This will enable decisions to be made about mainstreaming and scaling up/rolling out new ways of working. This is also likely to require withdrawal (de commissioning) of interventions in mainstream budgets that are less successful to make room for more effective approaches and to ensure less effective interventions do not simply fill up with clients. Some interventions tested through the Fund may be in effective and it will be important to recognise this and withdraw if necessary. The ‘Joint Investment’ partners would keep close track of what interventions were achieving and what their prospects are for transformation. This will also ensure that partners are committing their own resources to ensure interventions are successful.

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Putting in place the conditions that can enable us to grow the type of responses and joint working at the scale we need in Greater Manchester is a major task. involving a great deal of change to ways of working in the short, medium and long term.

There is a very tight timescale to respond to Government and ensure we can get the arrangements for a Community Budget for Greater Manchester agreed and ready to operate from April 2011.

The work involved is as follows:-

  1. Governance arrangements- the development of robust joint governance and accountability arrangements for Community Budgets which will create the strong and accountable joint commitment required. This will be principally driven through the new AGMA Combined Authority.
  2. Delivery models and interventions – identifying the ways of working we intend to focus on to deal with the issues we will target. This will link to identification of the funding streams and wider resources that will need to be used more collaboratively and flexibly to enable the model to work. This will be supported by evidence from a peer review of pilots on Life Chances and Early years which are testing integrated ways of working across Greater Manchester.
  3. Gateway process, evaluation, investment agreements– putting in place the overall model for joint investment between partners and designing its key parts such as the investment ‘gateway’, evaluation and cost benefit, performance metrics, savings distribution and mainstreaming arrangements
  4. Agreement – securing agreement with local partners and with Whitehall Departments about the funding streams, wider resources and flexibilities that can be applied to the Community Budgets and agreeing on additional funds that we want to secure from Whitehall and the basis of agreement on return on investment with Government
  5. Communication and engagement – ensuring there is clear and agreed view of what we are trying to achieve and widespread partner understanding and input.

This work will need to be underpinned by capacity building and improvement and efficiency work to develop systems and structures. It will also require support for workforce development and to help embed the culture shift that this work will involve.

This work will need inputs, ideas and energy from a wide range of partners and local communities. It will require the generation of interventions that can achieve the outcomes we are seeking and reduce expenditure and demand for services.

It is an opportunity for a major conversation about Communities and how we tackle some of Greater Manchester’s biggest challenges. It needs to involve people from all sorts of roles and different perspectives to make suggestions, seek the support of public services for their work and to challenge and improve existing approaches to our work in communities. It is likely to require the development of fundamentally different approaches to delivery.

At this stage the detailed development work is being driven forward through the AGMA’s Business Management Group and Wider Leadership Team, supported by officers from AGMA, Local Authorities. However work will also be required in each Local Authority area, driven by Place Boards, to develop joint investment arrangements to support and link to those developed at Greater Manchester level. Through this there will be a need and opportunity for many staff, services, partnerships and communities to get involved in this work.

Each Local Authority will be able to provide information about progress with Community Budgets. Regular updates and key documents will be available on the AGMA website Further editions of this briefing will be produced to keep people up to date with developments and early in the new year a wider AGMA consultation/ information event will be convened.

Our commitment is to use Community Budgets as an opportunity to accelerate our work in Greater Manchester on tackling poverty and life chances, improving outcomes in the early years and reducing offending rates.

In doing so we aim to generate ways of working that significantly reduce demand for public services and particularly costly acute interventions, thereby reducing costs. This will require a significant shift in the way public services invest and deliver together and one which many thousands of workers and residents will need to be actively involved in. We hope we can rely on your support.

Lead Officer Contacts

Lead Chief Executive Sean Harriss

(Bolton)

Lead OfficersCarolyn

(Assistant Chief Executive - Oldham)

Geoff

(Deputy Chief Executive -Performance)

District Contacts (AGMA BMG Members)

BoltonSteve

Bury Mike Kelly

ManchesterCarol

OldhamCarolyn

Rochdale Pam Smith

SalfordKevin

StockportGed Lucas

TamesideMirriam

Trafford Theresa Grant

WiganSue

Theme Leads

Health Warren

Transport David

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