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Community budgets could save £20bn – LGA

Reorganising the way public services are provided and paid for could save the public sector between £9.4bn and £20.6bn over the next five years, according to the Local Government Association.

The results of a year-long pilot of community budgets found that cutting unnecessary waste and red tape, as well as devolving more decisions to local areas could provide better services and cut costs.

The effects of community budgets were modelled to a national level by Ernst & Young, and show that this approach gives local authorities the freedom to integrate with other organisations and design services around local needs.

The LGA is calling for the Government to enable local changes to NHS funding formulas, and for all relevant central government departments to commit to devolving budgets and decisions down to a local level.

LGA chairman Sir Merrick Cockell said: “Shaping public services around the people who use them rather than the organisations which provide them makes better sense for everyone. It means people get better, more joined-up services and taxpayers get better value for money.

“The results of these community budget pilots show the potential savings which can be made are huge. Even if we only achieved half of the potential savings, this would still be substantial and will help meet the savings targets both central and local government have been set.

“The scale of the funding shortfall faced by councils means that it is going to take more than simply tinkering around the edges to preserve services like road maintenance, libraries and care for the vulnerable on which people rely.

“Government now has a unique opportunity to press ahead with a practical and tested reform of the public sector which would save billions while actually improving public services.

“But for this to work, it's going to take a fundamental change in outlook, both from Whitehall and local government, and an overhaul of the relationship between the two.

“Councils are prepared to change the way they work with central government. We need Government to wholeheartedly commit to community budgets by devolving powers and giving local areas greater control.

“Community budgets offer a great example of local public services taking the lead and joining together. This approach is not an easy way out and its success will be dependent on the different deals struck in different places. Government is cutting expenditure and we are offering it a way to help achieve this while improving public services for the people who use them.”

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