“It’s time for Total Place 2.0”: John Denham in conversation with Jessica Studdert

The best policy that almost was? Former Secretary of State John Denham and New Local’s Jessica Studdert discuss their new paper calling for a come-back for place-based budgeting as we saw in the Total Place pilots of 15 years ago. They discuss why pooling budgets locally is the only way to make public services more efficient and create better outcomes for communities.

TRANSCRIPT

Jessica Studdert: Hi, I’m Jessica Studdert, Deputy Chief Executive of the think tank New Local.

John Denham: And I’m John Denham. I was a Labour Minister, Secretary of State for Communities and Local Government in the last Labour government, and I now work at Southampton University where I study England and its governance.

Jessica: And we’re here today talking about the new report that we’ve both co authored, Place Based Public Service Budgets, Making Public Money Work Better for Communities. The starting point for our report is obviously public services are facing a deep crisis, there’s rising demand for services across the board and highly constrained resource.

This crisis is obviously going to be a top priority for the government of the next parliament to address, but there’s no option to simply increase spending. Efficiency drives are having diminishing returns. So the only option really for the next government is to consider how effectively existing spend is having an impact.

We’ve taken the starting point of place. Rather than thinking about public spending through separate departments and separate service silos nationally, how can we consider the totality of all public spending in a place and think about rewiring it for better impact and improved outcomes for the populations that live there?

So, John, what’s the key message of place-based budgets?

John: The basic idea is very simple. In any part of the country, there’s public money being spent now. It might be on the police service, the prison service, probation, health, social security, schools, your local council services. But nobody ever really takes a look at all of that money and says, are we using it in the best possible way?

So the idea is quite a simple one. We identify all the money that’s being spent in a local area and then bring the various agencies together to say, is this the best way of spending money? And could we spend it better if we organised it differently?

And what we do find in practice is that it isn’t used in the best possible way because services aren’t joined up, so if you if you don’t spend money on adolescent mental health, for example, you might down the line have all sorts of problems with those young people’s lives being ruined but also engage with the criminal justice system the police and so on.

So the idea is quite a simple one. We identify all the money that’s being spent in a local area and then bring the various agencies together to say, is this the best way of spending money? And could we spend it better if we organised it differently? So it’s not necessary it stays in the same silo of the public service it starts with.

And if we can do that, and we can produce good local public service plans based on people cooperating together, then we can have better public services. Now that means all sorts of changes in the way that government operates nationally, but the idea is very simple. And I think we can be confident that we would get better value for money if we did that.

Jessica: I think for me, there’s so many problems with the existing system that are priced in. We know that fragmented services are problematic from people’s point of view. They are kind of often passed from pillar to post, when they’re seeking support, and so there’s lots of waste, there’s duplication of services and then people fall through the gaps. People like Hilary Cottam have documented really well the number of sheer number of agencies that get involved in in people’s issues without actually fundamentally resolving them.

We know that a centrally managed system of services is quite bad at responding to the increasingly divergent needs of places. There’s lots of place-based inequality, and really different outcomes for people according to their postcode. But also there’s there’s a real barrier when you’re thinking about separate siloed services working in those more holistic ways with communities.

In this report, we identify what we call a prevention penalty, whereby currently services are disincentivised from jointly investing in prevention. At the moment, one service might pay up front for early intervention support, and then that saves money for another service further down the line at a later date. But currently, the kind of risk and reward of investing isn’t aligned in the same budget. So, for example, youth services have been withdrawn and there’s consequences across the board for, unemployment or higher crime rates and policing interventions or social care, where you see the knock-on effect of lack of funding in terms of hospital demand.

But John, I think the thing for me about this approach is that we haven’t dreamed it up from nowhere.

It’s got its roots in the policy Total Place that you were involved in the last Labour government and so it’s got a degree to which it’s being kind of tried and tested. But it’s almost the one that got away because it never quite reached its logical conclusion, did it?

John: It didn’t, and it’s worth thinking about why. Now I was the Secretary of State when 13 Total Place pilots were taking place but I can’t claim that I invented it. The opportunity to develop place based budgets was actually spotted by Sir Michael Bishard, now Lord Bishard, who had done an efficiency review for the then Labour government.

Just remember this – the enthusiasm for this was right across the country from rural areas, city areas, suburban areas. It was from all political parties

The pilots that took place looked at different themes. People looked at health and social care, they looked at producing a better place for citizens to contact lots of local public services. They looked at substance misuse, many different things. All of those identified the potential for huge savings in public services. And just remember this – the enthusiasm for this was right across the country from rural areas, city areas, suburban areas. It was from all political parties who were involved in local government and local services were really coming forward and saying we’re onto something here.

The problem is that after 2010, there was a change of government. And I think as much as anything Whitehall killed this because this was a threat to the way that Whitehall operated. You could only make this work if you gave people at local level permission to spend the money differently. And when austerity came in, the emphasis was very much about trying to make each individual service more efficient. Well, we’ve completely run out of steam with that, and this is why it’s so important for the government that gets elected after the next election, because they’re there isn’t going to be money available to just solve problems by pouring it in at the top.

It should be very attractive to governments that are going to be asked the question over the next nine months, how can you possibly improve public services when there’s no new money around?

But it should be very attractive to governments that are going to be asked the question over the next nine months, how can you possibly improve public services when there’s no new money around? This type of approach, place-based budgeting, is what actually gives people the potential to do that.

Jessica: And I think it’s important to say we’ve thought about those kind of fundamental principles of Total Place as was, but obviously in the kind of years since, the world’s changed quite a lot. But one thing that really has happened is there’s been so much locally led practice and grassroots energy and initiative that has been working differently in different areas, but really adapting to what different communities want and need. There’s so much, what we at New Local call community power-type approaches that are really based on understanding the different needs of communities, their real insight and how they have that kind of latent expertise that can inform how they can live their best lives, but also how they can intersect with the support that would help them thrive in practice.

We set out a series of five principles that underpin how you would practically get to this approach.

Firstly: counting. It’s going to be really important that the totality of spend in a place is understood and mapped, that requires the participation of all existing services, all national agencies that spend money locally, so that you can really get like a 360 view of what’s actually going into a local area.

Then the second principle is around collaboration. It’s going to be really important that services work together to understand how they’re currently viewing and working with a shared single population that they work with. So they’re going to need to share data. They’re going to need to share insights and understand where the kind of pinch points in the system are. So, how do inequalities manifest in a particular area? Which groups are facing unequal outcomes? Are there particular estates or neighbourhoods, that are facing real barriers? So you can really get that kind of granular and place-based understanding. of what’s happening with the population and what resources currently used, to improve their outcomes and then begin a conversation about how it could be used differently.

And this is where communities come in. So principle three is about community power. And this is a really important one because it’s not going to be possible for professionals to have those conversations in the abstract, no matter how good their data is, they’re going to need to build in people’s understanding of how they currently might face barriers to access, how they want to live their lives. Having those conversations, building what we’re calling local public service plans across public services and with the insight of communities.

It’s not going to be possible for professionals to have those conversations in the abstract, they’re going to need to build in people’s understanding of how they currently might face barriers to access, how they want to live their lives.

It’s on that basis that areas are held collectively to account for making progress against the outcomes by the centre. And that’s a much more effective way of understanding progress, and understanding impact and value for money, what’s spent on what outcomes where. And then the final principle is around, reform at the centre, because this can’t happen all at place level. If Whitehall isn’t playing ball, if Whitehall isn’t much more strategically aligned to overcome those silos, this won’t have the impact that it should.

John: I think that’s right. And I just to stress that point, if you’re working in government department funded service at the moment, at the end of the day, your accountability is to that department. And at the top of that department is an accounting officer who’s responsible for that money in that department. And they’re responsible for that to the Treasury. That makes it enormously difficult for people at local level to use money flexibly. So we have proposals to actually devolve that accountability and to have much more effective scrutiny and audit at local level at the same time as allowing local government, the health service and other agencies to work together much more effectively. I think that’s crucial.

The other part of the changing landscape, Jess, of course, is that we have had devolution deals and mayors and all of that over the last 15 years. And it’s worth just stressing that that’s very important, but that is primarily about what powers and resources do local authorities or combined local authorities have in an area. They are not dealing with the totality of public spending coming into an area. We want to see local authorities at the heart of our proposals, but they need to be able to range across with their partner agencies all of the local government money. So we shouldn’t give the idea that you do Total Place or place-based budgeting or you do devolution. The two actually fit together. But the ambition of place-based budgeting is, if you like, much more radical. It’s to look at every penny that’s spent in your local area and say, How can that be best spent with local people?

At one level, it’ll be about the way that services work together to tackle a shared problem. So it should give agencies who are often at the moment tempted to say, that’s not my problem. I can’t afford to deal with it. Somebody else should deal with it. And we saw a standoff earlier this year, didn’t we? Between the metropolitan police saying, well, we’re not going to deal with people with mental health issues anymore, because that’s not our job. You have to reverse this so that people can actually say, how do you change the service we provide?

At the same time, it should change the conversation that people who need some sort of support have with public services. So to give a different example, we know there’s a big issue at the moment with people who have dropped out of the labour market, who are probably struggling on low incomes. They can’t get back into work because they’ve got longstanding health problems, either from COVID or because of other health conditions that haven’t been dealt with.

At the moment, there’s very little way of them saying, look, part of my problem’s a health problem. Part of it’s getting back into work. Part of it’s finding the same employment. How can we organise the system to enable me to be able to do the work that I can do to raise the income of myself and my family?

At the moment, those people will get one response from the health service, which is about how long is the waiting list, another response from employment services, which is you shouldn’t really be claiming benefit if you could be working. We can change the conversation, and I think that will make a huge difference to the way in which many people experience public services.

Jessica: And I think we’re quite clear that there is such an urgency to get going on this. The next parliament will really need to hit the ground running. So we’ve got some clear recommendations about how you would begin to make this shift across the board.

We think that immediately legislation needs to take place to enable budget pooling, but also to be able to map on a really deep level that public spend that happens in a place. It’s much more than just a publicly available data sets, but what money goes into a place through national government, through national agencies, and across the board. So that legislation is going to be quite key.

Secondly, we’re talking about long term funding settlements for local government and much more aligned settlements across public services so that the next comprehensive spending review, that would happen immediately in a new parliament, it’s going to be a crucial moment to really set down that kind of long-term stability, that is set across public services and is a kind of real precondition to them coordinating budgets locally. And that’s really key. And then finally, we’re talking about place-based accountability, that implies a much different way of working for Whitehall rather than holding different services to account for very narrow performance measures and outcomes.

There’s a real shift so that you’ve got that kind of place interface from Whitehall to local areas. And we think over time, that’s how you begin to create that culture shift, that practice shift and that expectation that national is for strategy and local is for much more adaptable delivery with communities at heart.

“The Whitehall system would like to tell us this system of department accountability and everybody being answerable to the Treasury is a way of making sure that public money is used well. It’s not. It’s a way of controlling how much money each department spends.”

John: I think that’s right, and I think the challenge for an incoming government and for incoming ministers is to set up very clearly at the very outset that they want the culture and practice of Whitehall to change. You know, I’ve been there, it’s very tempting, you get into your department, you think there are levers you can pull, you can change everything from Cornwall to Coventry to Cumbria, you can’t, it doesn’t work like that, and so I think we need ministers coming in who actually know that in order to deliver the ambitions they have, they’re going to need to send to Whitehall the signals that a culture change in Whitehall is essential.

I think it’s really important to stress how much the current system is failing to use public money well and the rising inequalities from place to place, community to community is evidence of that. I think the Whitehall system would like to tell us, this system of departments and department accountability and everybody being answerable to the Treasury is a way of making sure that public money is used well. It’s not. It’s a way of controlling how much money each department spends.

It is very clear this is not a system designed to get the best value for money for every single hard-won taxpayer pound that goes into government. And, you know, if we have to have the bravery to say, let’s switch to a system where the question is, are we getting the best possible value for every pound that’s spent in this community? We’re not at the moment, we could be in the future.

Jessica: Absolutely. And I think one of the things about this is that it’s a serious, ambitious, but concrete idea that’s been tested already, and does kind of shine a bit of a way through what can be a very difficult situation and what feels at times like a really kind of deep crisis. But there’s a real, there’s a real kind of optimism and hope I think hopefully to, to the proposals we set out, they are ambitious, but deliverable.

It is very clear this is not a system designed to get the best value for money for every single hard-won taxpayer pound that goes into government.

If you want to find out more, please visit New Local’s website or follow us on social media, and please do get in touch. We hope this idea will be taken forward and we’d love to hear your views and continue the discussion.

Thanks very much.

John: Thank you.

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