The path to improved public services at lower costs is now clear, but unlocking the benefits will demand fundamental change in governance and a devolution of power. The vision of the Local Government Association is to replace the multiple funding streams, each with its own policies and bureaucracies, with an area budget. It is claimed that this move to place based budgeting could save £100b over 5 years by opening the gate to greater efficiency.

The LGA’s vision ‘Place-based budgets – the future governance of local public services’ details the benefits that would flow from a devolution of power. If officials locally were guided on what worked rather than instructions from Whitehall the end result could be very different. Layers of bureaucracy could be removed and budgets simplified. A total place pilot report showed that 49 funding streams and policies costing £9b has failed to reduce the number of young people not in work or learning. The report comments that the range of bodies, programmes and activities is leading to multiple uncoordinated interventions.

Layers of bureaucracy are also preventing issues being dealt with effectively. Many of the barriers to getting people into jobs are outside the remit of JobCentre Plus management. They include child care, transport, housing and mental health. Without devolved governance which allows all these strands to be brought together there is little prospect of change.

A further benefit of devolved budgets would be to overcome the inertia that results when costs falling to one ogrnaisation result in benefits to another. Housing is a key factor in the health of older people, but separate budget streams work against investment in keeping people in their own home. Taking a whole rounded approach to the health of old people would be beneficial to the client and cheaper for the taxpayer.

Sharing services and asset rationalization are being urged on councils as effective ways to cut costs and maintain frontline service. Devolving governance would allow these benefits to be spread more widely across the whole range of public bodies. Read more about double vision on public services of the future.