Each local area should be given a pool of money from which to distribute funding for different services, according to a new report by the Local Government Association (LGA).

The LGA’s report, called Place-based Budgets, suggests that savings of £4.5bn a year could be achieved through streamlining local government regulation and asset management. It says a new approach to public services could “strip out the plethora of funding streams, accountability regimes, ring-fenced budgets, quangos and funding bodies, which cost billions of pounds.”

The report was published alongside a speech yesterday by communities secretary Eric Pickles in which he endorsed the previous government’s Total Place concept of public agencies sharing services such as property.

He said: “I actually quite like the idea [of place-based budgets], the idea of one stop shops, single portals, service villages and the idea of using local authorities to be the facilitator, the organiser, the cheer leader, if you like, to bring these things together.”

Proposals in the LGA’s report include:

• Put councils at the heart of local economic development, allowing councils in each region to either replace the Regional Development Agencies (RDA) with local enterprise partnerships  or retain existing regional arrangements, and abolish the boards of Primary Care Trusts and Strategic Health Authorities
• Devolve RDA, Homes and Communities Agency and Skills Funding Agency budgets to place-based budgets
• Devolve the budgets and commissioning of employment support and Job Centre Plus functions
• Transfer responsibility for many trunk roads (excluding motorways) from the Highways Agency to local government
• Create local accountability for offender management

Launching the report yesterday at the LGA conference, chairman Dame Margaret Eaton, said: “Today I am proposing a radically different way of doing things that will save up to £100 billion over five years and help protect vital frontline public services from painful and damaging cuts.

“There are huge opportunities to save money and give people a bigger say in the public sector by starting with a clean sheet and giving power to the people who know their areas best. That is the way to reform the system and save money rather than to cut services we know people really need.

“The Government has made it clear there are going to be deep cuts in public spending. But if we simply cut departments and organisations as they are currently configured, we will do nothing to cut waste and instead hurt the frontline more than we need to.

“Far too many costly agencies spend money running themselves and talking to each other, rather than doing things people want.  Far too much time at the frontline is spent accounting to bureaucrats, rather than being accountable to people who actually use services.

“Ministers must do everything humanly possible to cut out the bureaucracy, unnecessary administration and complexity that clogs up the system before they even think about cuts to the everyday services our residents depend on.”

To read the LGA report, click here: Place-based Budgets

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