Are place-based budgets the bedrock of future efficiencies?

The Local Government Association (LGA) published Place-based budgets: the future governance of local public services in June this year. This is essentially an offer document to the Coalition, and it contains the LGA's view of how local services should be funded. Crucially, it looks at where savings could be made.

The report says, 'Public services will have to become more transparent, more effective and cheaper. This simply will not happen without a significant change to the way funding is allocated and decisions are made.'

Some core proposals are presented to the Coalition:

• commissioning responsibility for a set of local services should rest with a locally accountable governance body

• exactly how this body is constituted would be a matter for local decision but it would need to have a legal form and be fully democratically accountable locally; in most cases it is likely to be based on a council or councils working together

• if it were taking on a range of strategic commissioning decisions around economic budgets, natural economic geography points to a sub-regional geographic scope – councils working together based on cities, counties or county-sized group of districts or boroughs

• if it were taking on health and police commissioning responsibilities, the geography might be sub-regional or more local, as the existing configuration of services suggests

• the local body should be fully accountable for the budgets it holds: where the budget is funded by local taxpayers, it need only account locally to electors; where the budget is funded by national taxation voted by Parliament, the body should be able to account both to its local electors for outcomes, and directly to Parliament for that money, rather than needing to be regulated and performance managed by the current plethora of intermediary bodies

The report signals a radical shift away from more traditional efficiency measures, and the effectiveness of these is questioned. It also says, '...opportunities to drive out further top down efficiencies in organisational silos are narrowing....' New ideas are needed.

Is any of this relevant to housing? Short answer: yes. The report asks, 'Which services are best suited to devolved governance?' and it lists:

1. economic regeneration
2. housing and regeneration
3. home energy efficiency and managing flood and climate risks
4. adult skills
5. local transport
6. primary health care
7. policing and probation
8. support into employment for the long-term unemployed and workless

There is an obvious flaw in the LGA's report: it suggests that Primary Care Trusts (PCTs) could become involved in housing provision. However, we have learned that the Coalition's health service reforms include the 'deletion' of PCTs.