How quickly things change. It was barely six months ago that Gordon Brown was still prime minister, that cuts in the public finances were still a storm brewing on the horizon, and that most of the country thought England could win the World Cup. Today, we find ourselves with a coalition government, 25% cuts affecting the whole of the public sector, and the state of the England team, well, that deserves its own dedicated blog.

The landscape in local government has also changed profoundly: primary care trusts are being scrapped, schools are being ‘freed’, budgets are being slashed, and local authorities are expected to empower citizens and communities to provide the services their diminished resources prevent them from providing. And the mechanism that was created to oversee this process? Scrapped as well.

Comprehensive Area Assessments (CAA) were the latest version of central government’s attempts to enforce performance management on local government: Ofsted inspected schools and published league tables, the Care Quality Commission assessed hospitals, Her Majesty’s inspectorates took care of various facets of the justice system, and the Audit Commission oversaw local authorities’ performances, as well as the whole CAA process.

The new coalition government decided that this was both too expensive and too, well, comprehensive. Off it went. Only to be replaced by… nothing yet.

Presented with such a clean slate, how should we assess the £150bn spent by local authorities each year? How do we ensure that this money is spent ethically, productively and efficiently? How do we guarantee that schools are not deficient, that hospitals are clean and that children in care are looked after?

This isn’t simply about trying to make sure that tragedies such as the death of baby Peter do not happen again, it also about ensuring that councils are forward looking, that they deliver on their promises and that they communicate with their citizens and service-users in order to provide them with the best possible (and affordable) services.

Assessment serves multiple purposes: it holds local government accountable for the way it manages its finances and for the behaviour of elected members, and it helps ensure positive outcomes for citizens within an area.

The first of these purposes, accountability, can be achieved through a mixture of rigorous auditing, to be conducted either by the Audit Commission or an accredited auditing firm, and e-transparency, through the online publication of local authorities’ highest salaries, individual expenses, revenue streams, spending and commissioning contracts. These measures would not only create transparency and ensure ethical behaviour, they would also mean that public debate surrounding the role and actions of local authorities was informed by the financial realities in which they operate.

The second of these purposes, citizen outcomes, is more complex, and requires actions by different actors across an area. A simple example: reducing obesity requires efforts from schools (nutritional education, PE classes), the health sector (detection of early indicators of obesity), local authorities (sports areas, campaigns) and communities, private companies and parents.
This is true for obesity, but also for most other problems affecting an area: community safety, pollution, worklessness… It’s therefore unrealistic for central government to ask local authorities, though the imposition of national indicators, to reduce obesity/crime/unemployment, and for this to be monitored through hard targets.

Instead, councils should act as both leaders and facilitators in this process: they should agree key outcomes with citizens, and work in partnership with the relevant actors in an area to achieve those outcomes.

The process of assessment should therefore be taken away from inspectorates and central government, and placed instead into the hands of the local government family. The Local Government Group should oversee the following process: area self-assessments, whereby an area sets-out the outcomes it has agreed with its citizens, and the progress it is making against those; peer reviews, where authorities or services are flailing; and early intervention, where authorities or services are failing.

This whole process should be based around citizens, their needs, expectations, and experiences. They should be at the start, the end, and the centre of the process.

Finally, special attention should be paid to vulnerable individuals dependent on key services: children or the elderly in care, for example. For these key sectors, the relevant inspectorates should be retained, albeit with changes in the way they operate. Firstly, the inspections should focus on the priorities agreed by local authorities, and on protecting vulnerable individuals.

Secondly, they should do so in cooperation with the LG Group. Finally, they should focus resources on the services or areas where they are most needed through a risk-based approach.
This could be achieved through a system of ‘random weighted inspections’: the random element would ensure that inspections can’t be gamed, while the sampled element would mean that excellent authorities would be free from inspection, while poorly performing ones would be more likely to be inspected.

Such a system would achieve the purposes of assessment, foster local democracy, and empower local communities and citizens, at a much reduced cost.

When the uproar over tax and VAT increases subsides over the next few days, the debate will, hopefully, turn to the most astonishing aspect of this Budget – the commitment to an enormous 25 per cent reduction in government spending over the next four years. Even more astonishing is the fact that this has been announced with no detail on where the axe will fall. We must wait until the Comprehensive Spending Review in October to find out which governmental budgets will take the hit and how.

We do know what will be protected, such as health and international aid, and we know consequently that local government will be expected to take more than its fair share of the burden.

The scale of the cuts poses a serious challenge to councils’ ability to deliver services that meet the expectations of citizens over the coming five years and beyond. Recent polling that we undertook with Populus showed that two thirds of citizens still expect public services to be the same or better in 18 months. They could be in for a shock when the implications of this tough budget really begin to be felt in their local areas. Meanwhile, growing service demands and costs in areas such as care for the elderly and children’s services show no signs of abating. A forthcoming NLGN report, Financial Horizons, will demonstrate the rising gap between income and expenditure demands faced by local government.

The ferocity of this budget creates a burning platform for our local public services. If they are to avoid frontline cuts to vital services, they must be radically re-engineered. It was disappointing that the Budget did not mention the Total Place initiative, which opened up many of the avenues for saving and efficiencies that can be utilised. CLG and the Treasury should ensure that those lessons are not lost and that the potential of Total Place is taken forward. For local government cannot do this alone. If we are “all in this together”, local authorities will need greater flexibility in how it delivers its programmes and apportions its budgets locally. This would enable it to cut out duplication and waste, and to respond better to the needs of communities.

As well as reducing costs and expenditure, local government will need to be able to raise new revenue if it is to resist this crisis, and the government’s review of local government finance will be crucial to this. Yet despite central government’s pledge to increase local flexibility over finance, in this Budget it used a centralising approach with incentives to freeze council tax. The government must clarify quickly how this incentive is to be administered and be sure that participating local authorities do not miss out. Otherwise this move is a dangerous restriction of local financial autonomy at a time when greater freedom to raise income is required.

The message on local economic enterprise was strong, though, and we look forward to the White Paper announced on incentivising local economic growth.

We also welcome the commitment to support private sector enterprises and investment in regions that are particularly reliant on the public sector. These areas in particular will face significant challenges as funding is reduced over the course of the next parliament. As part of this, it was encouraging that no further cuts to capital spending were announced and that the government committed to progressing a number of key local and regional transport projects, as well as introducing a regional growth fund to facilitate capital projects.

However, the true threat of this Budget is what’s yet to come – the 25 per cent axe that hangs menacingly over public services like the sword of Damocles. We have until October to prepare for its descent.

In seeking wider input into his approach to reducing the budget deficit at national level, the chancellor George Osborne appears to be demonstrating that this coalition government has learnt one of the biggest lessons from the previous administration – namely, not to lose connection with the public in the decisions you make, or you risk their expectations becoming unrealistic, and your achievements never recognised.

While undoubtedly public service standards rose dramatically in the last ten years, the previous government received little recognition of this, as no amount of money invested, or performance-driven assessment, convinced the public that things were getting better.

This government is not only setting our expectations at rock-bottom with talk of “life-changing” cuts but is cleverly seeking our assent and collaboration to undertake what are going to be some of the most painful financial decisions in generations. It is making sure we have all signed the contract before we start to squeal. All in this together?

Legitimacy

Yet it is necessary for the legitimacy of democracy and for a sensible public debate that engaging the public is at the heart of this kind of difficult decision-making, and local government should take heed.

Local Authorities are already going to have to face up to making these difficult decisions, given that our sector will bear one fifth of the overall cuts, and together with the de-ringfencing of budgets, the axe has been put into local government hands whether we want it or not.

So local government should also be smart about how it brings the public with it when it makes those tough decisions, particularly because it is quite likely that the public are not aware how difficult things are going to be.

New research that NLGN has undertaken with Populus for our forthcoming publication Financial Horizons’ will demonstrate that 44% of the public thought local government services would be about the same quality in 18 months as now, and 24% thought that services would be even better. Only 32% thought that service quality would be worse in 18 months time.

Reputation

It will be particularly hard to bring the public with us in this debate, given the poor reputation of local government in the light of incidents such as the Baby Peter case, together with the lack of public understanding about the roles and responsibilities of local authorities, besides collecting bins.

Moreover, despite recent de-ringfencing of some budgets, the overall lack of financial wiggle room for local authorities means there remains limitation in which areas can be merged or sacrificed, and even less freedom in local government’s ability to raise money through other means.

Central government has been at pains to emphasise that cuts should protect frontline services. No-one would deny that there are plenty of savings that could be made through business transformation – through more shared services, better collaboration, reshaping the workforce, and local Total Place approaches.

However, this is still may not be enough in the years ahead, and local authorities need to prepare themselves for difficult decisions in redefining their role and the services they provide. And the public need to be prepared for this.

Yet in discussing the prioritisation of services, and areas for efficiencies, there are several issues that local authorities will have to take heed of, and this is where good local political leadership will ultimately be crucial in making decisions.

Response

The first is how you deal with the ‘tyranny of the majority’. Which is more likely to get a vociferous public response – the closure of a public library or a programme of support for domestic violence victims? Those most in need are often those with less of a voice.

Moreover, most council tax payers see little of where the greatest expenditure in local authority budgets goes. In the course of our research, one county council chief executive made it clear that, after efficiency savings, if the council was forced to make 10% cuts “you then genuinely have a situation where the public can’t see anything that they are getting for their money… only 13,000 adults get adult social care, there are only 800 looked-after children”.

We have to take care that in protecting crucial services for the vulnerable, we don’t lose the consent of the majority.

Much of the important work in the Total Place Pilots also point towards the downstream savings to be made by investment in early intervention and prevention. This will be vital to the long term efficiency and effectiveness of our public services.

Investment

However, this often requires upfront investment, and when priorities are having to be found, acute services are often already overwhelming and more likely to take priority. Preventative work is often less visible and the results longer term. It will difficult to expect this level of sophistication to come out in a public debate.

There is plenty of evidence, though, that with the right sort of engagement, the public will make well-considered decisions. In a recent MORI study, which engaged citizens in the financial challenges facing a local authority, participants at the start of the process wanted expenditure to increase on 21 of the council’s 23 budget options.

By the end of the discussion, it had reduced to 10 options, while the percentage who thought their council provided value for money increased from 26% to 69%.

This kind of consultation can be costly and take time, but will be crucial in bringing the public with us in the difficult times ahead.

Difficult and honest conversations with the public will be tough, but could just lead to a new era of more realistic public expectation, greater trust, and a more mature relationship between the citizen and the state.

Two days in May could go down in history as a time that defined the direction of the sector for a generation.

Chancellor George Osborne’s statement on spending sent a shockwave through every local authority finance director. It pointed towards even more drastic cuts to both the Department of Communities & Local Government budget and grant afforded to councils in the forthcoming spending review. A day later, the Queen’s Speech set out a bold Decentralisation and Localism Bill that promised radical reform.

Let’s consider the positives first. Many of the good ideas set out in the Conservatives’ Control Shift document have survived. A general power of competence should set councils free and prevent legal challenges such as the London Authorities Mutual Limited case. A promise of greater financial devolution hopefully marks the beginning of a more mature and honest debate over local government finance.

The economic development aspect of regional development agencies has been kept and should provide a key role for councils in developing their local economies.

The bad bits

Now for the bad bits. Despite a welcome move to remove ring-fencing from more local authority budgets, spending forecasts are unremittingly grim. Based on the proposals set out by the chancellor, the sector is looking at cuts of between 10-15% minimum, a figure quite unprecedented in recent times.

Despite the already sizable efficiency gains made by the sector over the past decade – figures that shame most Whitehall departments – the next wave of cuts loom like Dracula in a Hammer horror film. It is difficult to envisage how reductions of this size cannot hit frontline services.

Managing this process will be key. Extending Total Place to ensure value for money and improve partnership arrangements is more important than ever. NLGN’s forthcoming financial horizons research will outline approaches to how councils can adapt to a new era of service design and mitigate for substantial spending reductions.

We will be examining the future of workforce re-organisation in an era where increased productivity will become mandatory rather than aspirational.

The flood will take time to clean up, but at least there is now a clear policy direction from the government. Local authorities must rise to the challenge of making sure they don’t drown.

James Hulme is Head of Communications at New Local government Network

Looking ahead during a general election campaign can often be a hazardous exercise. It is less problematic however when national political parties share a common cause. One such common cause is Total Place.

Last month the Government published its report on Total Place and set out how this would be taken forward. In April 2011 major change is being heralded with high performing local authorities encouraged to come forward and bid for a “Single Offer” (where they would receive additional freedoms, budgets and responsibilities for their areas); others may put forward an “Innovative Policy Offer” (where budgets in specific policy areas would be devolved). These could augur radical reform of the shape and nature of public services and democratic decision-making across the England. The key questions are:

• what position would we hope to be in one year’s time?
  
• what reforms should be underway by then?
  
• where would we hope local areas and national government would be in their thinking one year from now? and
  
• how do we ensure that Total Place flies rather than flops in spring 2011?

But, we cannot merely wait for change to happen a year from now. Local areas can and should seek to progress the concepts that underpin the philosophy of Total Place where regulatory or statutory changes are not required. A Total Place approach can provide solutions for some of the emerging challenges facing the public sector and society more generally. For example, the pilots indicated that taking an integrated approach to asset management by the public sector across a locality or sub-region can realise savings of 10%. Using public sector assets more efficiently across a locality can also support the Carbon Reduction Commitment for better management and reduction of energy consumption across the public sector estate. Localities can also continue to develop innovative service delivery models, for example in relation to early intervention, without waiting for national government to trial new approaches to locality based cost-benefit analysis tools.

In line with this work, local areas should also seek to position themselves to take on additional responsibilities and resources come April 2011. The cultural cross-working that has played such a crucial part in successful pilot areas must be continued to maximise the chance of successful “Single Offer” bids, and otherwise realise Total Place ambitions. Alongside this, robust partnership governance arrangements should be developed to provide a sound basis to deliver against any new responsibilities and freedoms granted from April 2011.

This should include strengthening, focusing and streamlining LSP arrangements. Likewise, areas could consider strategic commissioning options for the locality.

Critical to the overall success of Total Place will be the level and depth of engagement of local citizens, local politicians, and partner organisations, because the major reforms in the pipeline will rely on a wider input from all these stakeholders.

Local authorities and their partners must seek to develop robust businesses cases for change where the justification is clear – this may cover services such as worklessness, skills and benefits, public and acute health care, that are delivered by multiple agencies across a locality. Treasury criticisms of the pilots concerning the lack of specific evidence and supporting data in some instances should be heeded, and the prospect of service improvements and budget efficiencies made transparent.. This would put a clear onus on the centre to carry out the reforms it has proposed.

For their part, central government must be bold in establishing the best methods for handing control down to local areas. The Treasury report conceded that councils retain too little influence over other public service agencies – new models of local democracy should be explored that can exercise greater control. Likewise, Whitehall should look to mirror the improved partnership working at a local level by better aligning departmental strategy.

Few would say these are all easy to achieve. However, if the interest of national politicians and Whitehall is to be retained in the medium term, localities must continue to deliver Total Place. If Total Place is to realise its potential of radically altering the way public services are delivered, this momentum is crucial so that localities continue to develop and present unarguable justifications of the value of service improvements to customers, and the associated efficiency potential that can be realised.

Guy Clifton is Associate Director at Grant Thornton and Nigel Keohane is Head of Research at the New Local Government Network.

The CRC energy efficiency scheme (formerly the carbon reduction commitment), which comes into effect on April 1st, represents a considerable administrative, financial and reputational burden for local authorities. However, research from the New Local Government Network (NLGN) is analysing how the initiative could also provide councils with the impetus they need to take a lead role in the effort to tackle climate change.

The scheme requires organisations using more than 6000MWh of electricity, including local authorities and other public bodies, to record their energy usage and purchase an allowance, initially priced at £12 for every tonne of carbon they emit. All revenue will be recycled back to participating organisations but with a bonus/penalty adjustment taking into account how successfully organisations have reduced their emissions. From 2013 there will be a limit on the total number of allowances available, with permits sold via auction and then traded between participants.

By encouraging energy efficiency the CRC aims to cut carbon emissions, but also to further incentivise the existing financial benefits of reducing utility bills. This is of particular relevance to local government at a time of heightened fiscal authority.

Understandably, there are worries about how successfully councils are likely to be able to comply with such a complex arrangement. A survey for the Carbon Trust Standard in November suggested that just 1% of authorities considered themselves ready for the CRC to start.

With their diverse portfolio of properties, and the challenges of engaging with partner agencies such as schools (whose emissions are attributed to local government under the scheme), it will also be more complex for authorities to audit their carbon than for banks or supermarkets whose estates are more uniform. This could result in the embarrassing situation of public money from councils being channelled to private companies like Tesco or HSBC via the bonus/penalty system.

Thus, it is imperative that local authorities implement the joined-up working across schools and other council departments including facilities, environmental services and the financial and legal teams that will enable them to audit their carbon swiftly and accurately, then put in place the necessary measures to reduce it.

In doing so, and thereby developing a body of expertise that could be used to facilitate wider energy savings across their community, councils would be creating the potential to play a far more significant role in climate change mitigation. New opportunities could include providing support, advice and skills to other public sector partners and major businesses; and stimulating new markets for green products and services on which their local communities could draw.

Because the most effective energy saving measures are often small scale, such as microgeneration or more energy efficient buildings, it makes sense that these initiatives are co-ordinated at a local level that takes into account the nuances of, for example, local housing stock or energy needs.

Cutting emissions from homes represents nearly a third of the planned reductions necessary to meet the UK’s 2020 target as outlined in the 2008 climate change act. If local authorities can use the experience of making their own buildings more energy efficient to replicate the exercise throughout their area, then the CRC could become less of a regulatory chore than a key milestone on the path to a greener future.

Many a column inch has been dedicated to Total Place over recent months, as politicians, public sector workers and other stakeholders weigh up its potential to achieve the ‘holy grail’ of improved services for citizens at the same time as making significant efficiency gains.

Converging pressures partly explain why such scrutiny is being given to the initiative. The financial situation, rising citizen expectations and increased demand for services are igniting and fuelling a burning platform. It is no-longer whether we should jump but how far, at what time and in what direction.

In understanding how to respond, the redesign of public services must learn from the current disjointedness, and be informed by the underlying dynamics shaped by politicians, government departments, delivery agents and service users themselves. New models should also include an honest recognition of what needs to change for the opportunities of Total Place to be realised and sustained. In short, we must react not only to the opportunities available, but also to the failure, tensions and ‘risk’ within our existing approaches in order to make the necessary leap forward.

Pilots are indicating that our current systems of government are too disjointed and fractured for us to respond in the optimum way to the needs of citizens and communities. For instance, it was discovered that those out of work may receive up to nineteen different assessments in a year; another pilot revealed that there are fifty different benefit types each with its own form, rules and administrative function.

Many of these inefficiencies stem ultimately from a lack of coherence across government departments and a historic reluctance to devolve. Resource and responsibility are held centrally rather than at the local level. This results in the silos that exist at a national level being reinforced locally, as public agencies often remain at the behest of their relevant government departments in what at times can be likened to a ‘parent – child’ relationship. The theoretical commitment to joint working and the pooling of resources can be overshadowed by historic cultures, working practices and reporting structures. Locally, public agencies find themselves pulled in both horizontal and vertical directions, with one championing the needs of place, and the other the priorities of central government. The two are not always mutually compatible, and one has to win out. When agencies account and report upwards, too often this is the latter.

Meanwhile, many of the actions relating to the longer term sustainability of a Total Place approach are inherently political. Some of the solutions to working together better at a local level will require sensitive decisions to be made around issues such as resource allocation, early intervention, commissioning, and also crucially de-commissioning. These are difficult choices that citizens should have a voice in guiding. And, hand in hand, greater political integration is required so that democratically-elected leaders can be provided with the legitimacy, discretion and scope to take decisions on behalf of their communities.

Major reform is needed to establish a different culture and architecture of government. Clearer co-ordination at the centre combined with greater devolved responsibility to local areas would represent a significant leap from current working practices. However, only this will provide the infrastructure to empower local stakeholders to step up to the plate, and develop specifically tailored solutions centred round the needs of a place and its residents.

In the first place, strong integrated leadership and vision, of a type that has eluded Whitehall in the past, must be introduced at the centre. NLGN has concluded that the Government should give serious consideration to establishing a Department for Devolved Government to include the current Department for Communities and Local Government, the Cabinet Office and the offices for Scotland and Wales. This new ‘super department’ would have the objective of bringing strategy together across central government. At the same time it would identify and devolve the powers held in Whitehall to allow local service delivery and improvement. This function would be far more capable than existing arrangements in driving the necessary change across the whole of government in the interests of place. Such a department would also provide clear strategic input into Treasury commitments, to ensure that resource allocation can follow local priorities and be deployed appropriately.

A new series of ‘Place Proposition Agreements’ should also be instituted across the country. These would allow local areas to set out a business case for how services could be better configured to unlock efficiencies and drive improvement in return for greater freedoms, responsibility and control from central government.

The Total Place pilots have set out both the risks in our current systems and the opportunities available when services can be built around local communities. It is now time for the central state to make the jump that local areas have identified they are ready to take.

The 24th March Budget marks a fruitful association between the Total Place initiative and the Treasury. The lead from the Treasury is positive because, at the moment more than ever, money really matters; it is also good because it suggests awareness within the heart of government that local solutions should provide an answer to the future shape of public services. However, at the same time, new research from NLGN concludes that the Treasury should focus not only on the immediate accounting and financial benefits but also on the prospect of wider long-term reform to service delivery needed.

To take forward the key lessons from the pilots, national politicians must be ready to grapple with the complex and major changes that Total Place throws up. At the moment, there seems to be something for everyone in Total Place. Even the Prime Minister has argued that fifteen percent savings from Total Place ‘is probably not unrealistic’.

National politicians are presenting unusual harmony on the case for Total Place. All three main parties have welcomed the publication and transparency of spending by public bodies in an area. There has also been much agreement on the case for driving efficiencies through shared appointments across local public services and driving efficiencies by sharing specific functions. For instance, the Conservative Party has expressed enthusiasm for more areas establishing Directors of Public Health as a means to save money and join up local agencies.

This apparent political unanimity may mask differences of interpretation. In its Smarter Government White Paper, the Government set Total Place out as a further iteration and exposition of its public service reform agenda. Meanwhile, the Conservative Party may prefer to use the light shone on public sector approaches through Total Place to highlight multiple layers of government and, what Bob Neill has referred to as, the ‘insidious nature of the quangocracy that has grown up in the UK’.

However, the real question that has emerged from NLGN research is whether national government – of any colour – will be bold enough to take the difficult decisions to allow a much wider reappraisal of the way that public services are constructed and delivered.

Reform needs to take place not just in localities but also within the centre. Currently, democratically-elected representatives control only a fraction of the public resources spent in an area. Looking afresh at the services that citizens receive demonstrates just how disjointed they are, leading to inconvenience and inefficiency and hindering more innovative responses to the challenges faced by society. For instance, many areas are now looking at how they could prevent major problems in health, crime and unemployment through supporting people more proactively at an earlier stage. However, the fractured nature of service budgets means that public bodies may not feel the reward of their investment or may be unable to access existing budgets held elsewhere in the system.

Meanwhile, multiple funding routes and departmental accounting and performance monitoring create their own inefficiencies. But, they are indicative of a wider problem: namely decisions and money held too far from the citizen; a reliance on vertical departmental funding, reporting, accountability, initiatives and programmes; and lack of discretion at the local level.

Radical reform within Whitehall is therefore necessary to counteract these forces and drive collaboration and devolution. NLGN propose that the centre and the local area should come to a ‘Place Proposition Agreement’ which would delegate specific budgets and responsibilities down to the locality.

The report also advocates a remodelling of Whitehall itself to encourage devolution and drive more joined-up vision across different departments. NLGN’s proposed ‘Department for Devolved Government’ would merge the Cabinet Office, the Department for Communities and Local Government and the offices for Scotland and Wales. In so doing, it would ensure both that Whitehall thinks as one and that control can be pushed down to communities.

If we made these reforms then we would achieve not only financial efficiencies but also radical reform to the way that citizens receive their services.

Of all the initiatives and reforms to public services of the last decade, none has had such unambiguous support from politicians of all parties as that received by the Treasury-led ‘Total Place’ programme. Neither has any reform had such apparent unanimity of support or commitment from Whitehall and localities alike. But then the concept is such commonsense – to bring all public resources together with an area to respond to the needs of that place – that opposition would be hard to muster. The question is actually what level of change is government as a whole ready to contemplate and tolerate? Will Whitehall really be ready to open the doors to its corridors of power?

The official and unofficial pilots are unearthing major failures within our public services as currently organised. And the costs of these failures are significant – inconvenience to the citizen and customer, wasted taxpayer money, an emasculation of the relationship between public servants and their clients. In many cases, inconvenience for the customer and wastage in the system goes hand in hand – pilots have revealed a dizzying array of assessments and some 50 different forms for benefits.

And it is not hard to see where this stems from, with one council discovering 120 projects or programmes, delivered by over 50 public, private or voluntary sector providers, with over 15 funding streams in employment-related services alone. Another pilot estimated that it costs national, regional and local organisations some £135m to spend £176m on economic development projects.

Conversely, intervening at the right time in the right way can mean more effective and efficient solutions: London Councils have estimated savings at 15 percent across the capital; other areas are suggesting that 10 per cent savings in worklessness and public sector assets are conservative figures.

Yet anecdotal lessons only take us so far; the real question is how best to put these wider collaborative concepts into practice, and on a sustainable basis.

What government must look like

Unlocking these financial and service benefits is no easy task. The pilots demonstrate the virtue of government thinking as one, just as they reveal the merits of close proximity to the citizen in putting this concept into practice. It is here, at the local level, where the interactions between the state and its clients can be best understood, duplications stripped out and innovative new approaches designed. Yet, we remain far from a situation where public resources can be applied and decisions be made at the local level – especially as such a small fraction of public money is under the discretion of local councils.

Major barriers also stand in the way of a ‘whole public service approach’ more generally. At first glance many appear local problems – professional, organisational and sectoral cultures, the need for local leadership and capacity to bring the whole public sector together.

However, these mask more embedded dynamics, activities and relationships across government. Performance targets, departmental programmes, vertical accounting structures, ring-fenced budgets all stand in the way of Total Place methods by generating their own conflicting practices, cultures and programmes at all tiers of government. Yet, our analysis also demonstrates that we cannot hope to respond simply by removing a series of performance measures or even ring-fenced budgets. Rather, these forces are now engrained culturally: the dependency culture locally and the centralisation culture feed off each other; performance frameworks are a symptom of a reluctance to devolve responsibility and resource to the local level; the multiplicity of programmes, funding streams, targets and systems reflect the lack of strategic coordination across government and the tendency for each department to think individually. Each of these reduces the discretion or ability to make decisions and pool public resources at the right tier of government.

Our responses in the past have been piecemeal and partial – such as reducing central targets from 1,200 to 200 – or have relied on local partners to transcend these barriers as best they can through Local Strategic Partnerships. There is clear awareness of the problem, but the next steps may need to be more radical.

So what does it mean for the way we govern?

To break us out of these cycles, NLGN propose three principal reforms to the way that government works. The first is to devolve responsibilities and funding for local services, such as public health and local policing where councils and their partners have such commonality of purpose that any other approach appears perverse. Beyond this, NLGN proposes that the Government adopt ‘Place Proposition Agreements’ as the next iteration beyond the LAA, through which the centre and localities would make practical deals on how to deliver a more efficient and effective service. We predict that localities could put forward robust business cases for devolving responsibility and resource, risk and reward, in a whole range of services including worklessness and benefits, chronic and acute care, offender management and economic development to name just a few. These dialogues between the locality and Whitehall would present the Treasury with innovative cost-effective and efficient ways to undertake public service activity within the context of restricted public resources, and go beyond the aspirational agreements of the LAA process.

Whitehall could and should become a strategic centre setting out the vision and framework within which public services should operate. But such Place Agreements on their own are unlikely to be sufficient to drive the devolution necessary nor the requisite ‘whole government’ approach to unlock savings and service improvement. Evidence indicates that Whitehall itself remains too fragmented and too opposed culturally to relinquishing the hold on the purse strings or performance measures.

The key question therefore is how we can encourage central government departments to look outwards and think as one. Many proposals and reforms have been forthcoming over the years – such as cross-cutting units and budgets – but none have created the momentum for the seismic shift in culture that is essential. As one of our Whitehall interviewees noted, ‘as long as there are clearly delineated government departments, the culture will be hard to shift’. Wholesale restructuring of all departments would be costly and may lead simply to new discrete corridors of power being established. Therefore, in the short term, there would be merit in forcing all domestic departments to perhaps funnel a minimum percentage of their departmental expenditure through these new deals with localities as a way to catalyse the pooling of resources.

However, we also recommend a major change to the shape and nature of Whitehall. Despite its best efforts, CLG has possessed insufficient presence and sway within the corridors of Whitehall to shift the mindsets and practices of its sister departments to be more genuinely oriented around the needs of place. The current architecture of Government lacks the ability to execute change across the totality of central functions. NLGN therefore proposes that CLG should be converted into a new Department for Devolved Government, merging with the Cabinet Office, Scotland and Wales Offices, the constitutional elements of the Ministry for Justice and the Prime Minister’s Delivery Unit. This major reform would create a department of sufficiently powerful strategic clout to propel the merits of whole public service approaches and devolution and drive greater cross-cutting approaches in Whitehall.

Total Place must not be seen merely as another edict or buzz-phrase generating talk but no change. It is as much a challenge back for Whitehall and any test of seriousness can be judged nationally as well as locally.

There is no doubt that national politics is poised for an epic – and by the looks of it pretty unedifying – battle in the run-up to the General Election. Perceived wisdom about an outright Conservative majority has been replaced by a scramble to understand the implications of a hung parliament, as the polls narrow and the battle heats up.

Local government in the meantime watches with interest. Cynics will say that early Tory enthusiasm for the localist agenda is unlikely to translate into devolutionary action in Whitehall, although their commitment to a smaller state and the ‘post-bureaucratic age’ is likely to remain.

It is no secret that the Conservatives want to scrap RDAs and unelected quangos and many are pointing to Conservative flagship authority Barnet’s so called ‘Easyjet’ council as providing a model of what ideal local government could look like to the Tories. Opportunities for the third sector come from the possibility that we may see some local authorities moving further away from traditional delivery roles and moving more towards becoming strategic commissioning hubs. If the third sector can get a seat at this table, then there could be some really exciting prospects.

However, the biggest driver for radical reform over the next few years will be the economy. Local government, reliant on central government for 80% of its funding, faces a cliff edge in 2011 after a decade of good investment. The protecting of major budgets such as the NHS and schools could result in a disproportionate impact on other services. This may mean cuts of 20% or more for local government in the period 2011 – 2014.

Local authorities are facing tough priorities for local service provision and the most ambitious councils are hoping to avoid so called ‘salami slicing’ approaches (small cuts across the board) in order to use this opportunity to take a fundamental look at the way we deliver local public services.

Some local authorities are realising they can no longer afford to ‘do it all’. Difficult political decisions will have to be made, and many are realising the opportunities that co-production and engaging local community and voluntary organisations can provide. Lambeth for example is leading the way with its ‘co-operative’ approach to local service provision. Better outcomes for citizens are as much a driver as efficiency in this agenda.

But it’s in the Total Place initiative that the hopes of the local government family currently lie. Many see this as the key to making the efficiencies needed, while actually improving local service delivery. The pilots, which look at the entirety of spend in an area by both central and local government, and then seek to highlight duplication and inefficiency are already demonstrating potential savings. Many hope Total Place will finally provide the incentive to break down departmental silos, free agencies from restrictive top-down performance management, and remove ringfencing of budgets, allowing greater partnership working at the front line, more pooling of resources, more holistic and personalised approaches, and better preventative work.

These are all approaches that the third sector is well acquainted with, and often manages to undertake better than the state at a local level. If we do see greater pooling of budgets in areas like health and social care for example, or housing and employment, as a result of Total Place, again the community and voluntary sector could be well places to seize this opportunity.

This will not be an easy time though. As budgets shrink, partnerships can come under strain, and of course all of this is set against a backdrop of rising citizen expectation and growing demand for services as our population ages. Issues like climate change, public health and social care remain tough challenges, and local government can’t face them alone.

In this difficult and highly politically charged climate, if the third sector can show strong leadership and real, tangible solutions through efficient, demonstrable local delivery, then its time could really be about to come.