Community Budgets to be rolled out countrywide

Up to 120,000 families facing real social challenges will see a significant improvement in services with the roll out of Community Budgets across the country, the Deputy Prime Minister announced at the Local Government Association Conference today.

Community Budgets for families with multiple problems will create better public services by bringing together all local priorities and public money so agencies can find the right solutions to issues in their area in a new and co-ordinated way

The Deputy Prime Minister invited councils to sign up for Community Budgets. Around fifty more authorities will get Community Budgets this year and then at least a further sixty in 2012-13. This follows the success of sixteen pioneer areas that have put in place plans to support the first 10,000 families.

These families are less than one per cent of the population, but are seen by as many as 20 different public sector professionals at a cost of £2.2billion. A Salford family required 250 interventions in one year including 58 police call-outs and five arrests; five 999 visits to A&E; two injunctions; and a Council Tax arrears summons. Salford's Community Budget approach cut the £200,000 cost by two thirds by setting up a co-ordinated joint prevention and early intervention team that reduced duplication and stepped in before problems escalated.

The Deputy Prime Minister also announced that four new Community Budgets pilots will be launched to explore how communities can have greater control over services through a single budget from Whitehall, as part the Government's review into local government finances.

• Two areas will be selected to help co-design neighbourhood level Community Budgets giving residents the opportunity to say what services they want, how they should work and whether they want to run them; and
• Two areas will be selected to help co-design a Community Budget bringing all funding on local public services from the area into a single pot to test how to create the right local financial set up to deliver better services that people want.

A prospectus will be issued by the Department for Communities and Local Government at the end of the summer setting out the details for creating these single budget pilots.

The Deputy Prime Minister said:

"Every Government preaches localism. This Government will practice it. In terms of real decentralisation, money talks. We need to reverse decades of centralisation to make our communities masters of their own economic destinies. We have to create the conditions for communities to invest in their own success. That means putting our money where our mouth is to give local authorities proper power over spending as well as more control over the taxes raised and keep so, for example, they can fight to attract businesses to come to their area.

"We will be also be putting community budgets at the heart of how we deliver services. There are families that have been let down by the system. Their complex problems mean they can end up seeing dozens of professionals across public services - but those professionals aren't always joined up, making it near impossible for anyone to get an overall picture of what that family needs. Community budgets are budgeting for real life, breaking down the barriers between different parts of the machine, and treating people with troubles like human beings, not figures on a spreadsheet."

The Deputy Prime Minister also announced that the Department for Communities and Local Government will introduce a Local Government Finance Bill that will throw the shackles off Whitehall funding by giving councils the freedom to borrow against business rates, known as Tax Increment Financing, and to retain business rates.

The first phase of the Local Government Resource Review is looking at how to repatriate business rates to local authorities. Real progress is being made and it is expected to report in the summer. A second phase set out today deals with Community Budgets.