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January 2013

NCB Research Team

Decentralisation and Big Society Research and Analysis

Neighbourhood Community Budget Overarching Evaluation: Working towards local control and accountability, and a devolved budget

OUTPUT 3

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Summary of key points

SUMMARY

* These insights are derived from interviews with pilot areas - all quotes are from pilot leads unless stated otherwise.

• Pilots’ long term visions for their NCBs centre on achieving community control, suggesting the renegotiation of power relationships is critical

• Pilots recommend taking a focused approach to the budget, based on existing evidence, rather than consulting with a ‘blank sheet of paper’

• There is still uncertainty about governance arrangements, though all areas appear to be coming to a structured role for elected members

• Pilots are aware of sustainability issues around governance and are considering whether the role of the governing body can be formalised through ‘neighbourhood agreements’

• Areas are tending to align rather than pool budgets, but this could be seen as a stage in the process towards devolved budgets

• Areas are unambiguous in their endorsement of the value of being a pilot

•There are still opportunities to develop:

Links with other budget devolution strategies and localist initiatives

Embedding co-design

Co-production

This is the third of a series of evaluation reports and reflects the pilots’ experience at the end of 2012

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This output explores

Pilots’ visions for their NCBs

Governance mechanisms: sustainability and the role of elected representatives

Devolving budgets: a process

Co-design and co-production

The wider localism agenda

CONTENTS

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Pilots’ visions have become more specific, but remain centred on community control.

VISIONS: REVISITING THE PURPOSE OF THE NCB

At the start (May/June 2012), pilot leads most commonly cited local control as the most

important opportunity presented by NCBs.

In November, leads primarily described their long term vision in terms of community voice and co-production, the sustainability of their

proposed governance mechanism, and scalability.

In 3 non-pilot areas* taking forward an NCB approach, long term visions focused on

improved outcomes. Only one pilot primarily talked about their long-term vision in this way -

although this does not indicate improved outcomes were not important to other areas.

*Three interviews were carried out in areas which had originally expressed an interest in becoming an NCB pilot and which were identified as having made progress in taking forward an NCB-type approach outside of the pilot programme.

“The NCB for residents here is a training ground for how they might go about applying these principles

generally – applying them to what is important to them locally in their community – depending on what is

happening at that time”.

“In five years time I would like any partnership thinking of working in the area to come to the community

group first and get them around the table”.

“In 5 years time, I hope that … you and other government departments and local authorities [to] say this is the future, not of a dozen neighbourhoods, but become the norm of the day. Instead of 12 pilots, got 5000 each with different portions of their own budget, each investing in developing in a stronger bottom-up

community”.

“So the added value of a community budget (CB), seems to me, to be to get better impact, and

outcomes, at pace, in a faster time. And if that’s what a CB can deliver, then do it, don’t do a CB for

the sake of doing a CB”. (non-pilot area)

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VISIONS: THE RATIONALES BEHIND THE NCBS

Academics have identified 4 main rationales for neighbourhood working: civic, social, political

and economic.

Neighbourhood activities do not fall exclusively into categories, but interventions tend to emphasise

different rationales.

The pilots express a combination of rationales and objectives, as a group and individually*:

•7 are categorised primarily as civic rationale (focus on active citizens, community participation and voice) •1 is categorised primarily as political rationale

•1 is categorised primarily as economic rationale (focus on improved service delivery)•1 is categorised primarily as social rationale

•It was not possible to classify two areas

This suggests renegotiating power relationships is more important than the focus of the budget and specific neighbourhood outcomes.

Neighbourhood empowerment

Neighbourhood partnership

Neighbourhood governance

Neighbourhood management

Primary rationale

CIVIC SOCIAL POLITICAL ECONOMIC

Key objectives Active citizens and cohesive community

Citizen well-being and regeneration

Responsive and accountable decision making

More effective local service delivery

Democratic device

Participatory democracy

Stakeholder democracy

Representative democracy

Market democracy

Citizenship role

Citizen: voice Partner: loyalty Elector: vote Consumer: choice

Institutional form

Forums, co-production

Service board, mini-LSP

Town councils, area committees

Contracts, charters

* We did not ask directly about rationales, but based this on data provided in the interviews, particularly information on long-term visions.

The primary rationale is neighbourhood empowerment - renegotiating power relationships is critical

Source: Lowndes and Sullivan (2008)

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A focused approach and using existing data could enable more rapid progress

Interviewees reflected on the process of developing the focus of the budget, and made recommendations to

others. They advised: • Making full use of existing administrative*,

consultation and research data• Be clear about the focus – potentially before

carrying out community consultation – and keep the focus narrow.

• Give the community the data to make informed decisions

This suggests there could be less reliance on new consultation to

identify the budget focus.

This could shorten the process and enable more time for engaging the

community later during co-design or co-commissioning.

Pilots have been encouraged to develop a clear focus and many suggest there

are benefits to this approach. But non-pilots suggest lots of smaller

activities to address a broader agenda builds trust gradually and provides

room for failure. However, they are less likely to be working towards a ‘budget’

One non-pilot area said it was important to have a ‘concrete plan’ before going to the community.

However, the (3) non-pilots seem to have taken a broader approach at this stage, enabling them to do a range of smaller co-delivery activities with citizens

and partners.

Both approaches (broad focus with a range of co-delivery activities and narrow focus emphasising co-design/co-commissioning) can lead to citizen empowerment and are not mutually exclusive.

Co-delivery and co-commissioning require new relationships with service providers, but differ in terms of the numbers of people likely to be involved and the type of involvement.

*However, spend mapping was not found to play a key part in the process of developing the budget (except by one area), but was acknowledged as helpful for engaging partners.

VISIONS:

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Governance plans: most are planning new structures and include the community, councillors, and service providers.

GOVERNANCE: PLANS FOR GOVERNANCE BODIES

Current uncertainty about future governance

arrangements (x 4 pilot areas) although 2 say accountability

will be through elected members

Plans for the governing body include members from the community,

elected councillors and representatives from key

service providers (x 6 pilot areas) The plan is for the

governing body to be made up entirely from members of

the community (x1 pilot area)

1 area wants to transfer the

governance of the NCB to the

Neighbourhood Forum established for Neighbourhood

Planning, but discussions are in

early stages.

1 area suggested they would like to develop firmer plans for what is to be governed before

developing plans for the governance mechanism.

The proposed governing body is a company limited by guarantee, and plans for it to become a charity,

partners suggest, will provide additional legitimacy.

Plans for the governing body do

not include community

members other than elected

councillors (x1 pilot area)

4 areas plan to use structures that are

already established.

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Elected councillors are seen to play a key role in ensuring accountability of public money

• Is representative democracy the only way to ensure accountability?

• What are the implications for leading voluntary organisations? Is it essential they have the support of the local council?

• How does this emphasis on representative democracy fit with the desire for NCBs to facilitate community control and voice expressed by the pilots?

• Does the emphasis on both the role of councillors and community empowerment have implications for developing the facilitative role of councillors?

GOVERNANCE: THE COMPOSITION OF THE GOVERNING BODY

Governance is closely bound up with the issues of participatory and representative democracy

For a new relationship between citizens, communities, and state, the balance needs to be reassessed.

Many authors have commented on the need for new public sector cultures to become embedded and for risk to be

treated as an opportunity for innovation which can be managed, not as a something which should be avoided. This can be a big challenge for local interests and authorities

(Taylor, 2000; Young Foundation, 2010; Richardson, 2012).

Are there forms of community organisation which are representative enough, without being directly elected

through the ballot box?

Interviewees frequently acknowledged the need for governance members to have certain skills and for the inclusion of

professionals with relevant specialist knowledge. The implies the need for capacity building in the community. It also suggests the need for a flexible system as the focus

changes or expands.

6* areas identified councillors to ensure accountability for public money (even when uncertain about their governance plans).

* And another three areas were definite that their governance structures would include elected representatives, although they did not answer the question of how accountability of public money would be ensured with a response of ‘councillors’.

See Annex B for further information on the role of councillors and issues associated with community governance

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Sustainability of the proposed governance structures is an issue

GOVERNANCE: SUSTAINABILITY AND EFFICACY

Decentralisation to neighbourhoods can be reinforced and structured by legislation e.g. neighbourhood planning

"Once a neighbourhood plan is in force following a successful referendum, it carries real legal weight. Decision makers are obliged to consider proposals for development in the neighbourhood against the neighbourhood plan".

Neighbourhood plans allow local people to get the right type of development for their community; however the plans must meet the needs of the wider area, by, for example, taking into account the council’s assessment of housing

and other development needs.

5 areas suggested the sustainability and efficacy of the proposed governing body could be an issue:

3 areas said they would like their (proposed or existing) governance structure to exist in 5 years time!

3 areas also said service providers are under no obligation to engage with a neighbourhood body (unless it commissions their services). Pilot areas are

relying on relationships.

Some areas are considering introducing a contract/charter to make dialogue more binding.

Are there any other options?

“We want to sign up all our partners up to a social contract, so that in years to come when

there’s new staff and new members, they know … [we]’ve got a management board that [they]

report to, or at least communicate with”.

“There is no provision in law for that service to be financially accountable [to the community governance group] but there is an openness about the people we are approaching to engage, an excitement about having this dialogue”.

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Is it necessary to hold the budget?

Some areas emphasised the importance of sustainable and ongoing dialogue and influence with service providers (enhancing community voice) rather than having control over a budget. However, the benefits of holding a budget were recognised in terms of local identity,

empowerment, and pride.

The first step is usually to align budgets

Aligning budgets

Creating a virtual budget

Devolving budgets

Should the creation of an NCB be seen as a process where neighbourhoods are most likely to succeed in aligning or creating a virtual budget, enabling them to build trust

over time, before they are able to hold devolved budgets?

The economic climate

Some areas saw the economic climate as potentially increasing opportunities to work

differently with service providers. However, more often there was a recognition that service providers

were thinking about cuts and protecting their services, making devolving budgets more difficult.

Within particular services, major reorganisations are making it difficult to know what budgets will be

available next year.

Few of the areas will be holding (new) devolved budgets in April, but most expect to have aligned budgets and 2 will have virtual budgets (to be confirmed in January).

A virtual budget is between an aligned and pooled budget, where service

providers identify their spend in an area and it is then freed up or spent differently, under the

influence of the NCB.

BUDGETS: ALIGNING AND DEVOLVING

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Other approaches to the devolution of budgets and decisions-making at neighbourhood level*

Parish councilsDirect devolution to democratic

representatives

The Royal Borough of Windsor and Maidenhead have developed a menu of options for the devolution of services to

parishes. Eastleigh Borough Council has delegated services to parishes,

decreasing LA council tax equal to the cost of the service, enabling parishes to raise the amount needed to cover the level of service required (which might be more or less than that previously

provided by the LA) through the parish precept.

http://www.nalc.gov.uk/Publications/Booklets_and_Resources.aspx

NCBs

Influence over aligned budgets with potential

for devolution to democratic

representatives and the community

Participatory Budgeting (PB)Direct decisions by the community on

small budgets, with potential to scale up to decisions on core budgets?

“Participatory budgeting directly involves local people in making decisions on the spending

priorities for a defined public budget”.These have been relatively small scale and LA led processes. However, PB “could be used as a vehicle to increase diversity of

local service provision … and, furthermore, provid[e] an alternative form of decision

making to traditional commissioning processes that may not lend themselves to

changing current patterns of provision”. (DCLG, 2011).

These approaches are not mutually exclusive and can be used in combination.

“The key difference, [between PB and the NCB] is this [community governance group] would have a budget of their own and could go off and do their own participatory budgeting thing”.

The devolution of different services/budgets may fit more comfortably under one approach, but the devolution of decisions and budgets will also depend on the attitudes of, and relationships with, key service provider personnel.

DECIDING BUDGETS: DIFFERENT NEIGHBOURHOOD MODELS

*There are also other initiatives which involve decisions over (small-scale) neighbourhood budgets, such as Community First http://www.cdf.org.uk/content/funding-programmes/community-first.

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Current and planned co-design activities cover a range of activities. This needs selling to partners.

Next steps: co-design

5 areas talked about their ongoing/immediate plans for co-design. This includes work planned with external agencies to facilitate the co-design

of a common assessment framework and activities to improve the public realm, for

example. “[Residents] said they would get involved if they

believed it would make a difference, so we’re taking them at their word. [So the aim is] to have a balance of residents, and service managers,

sat around a table, drawing things! ”.

1 area talked about co-designing the governance structure.

2 areas suggested that they, or community members, would have to sell co-design to

service providers.

“The challenge is to sell co-design … If [service provider] budgets are going to be cut significantly and are seriously worried about

money – we want to sell it as a solution”.

Some areas have already made progress on co-design activities.

One area is making good progress on co-design through the targeted involvement of key individuals as user representatives in service design discussions.

This requires the lead partners to support and develop residents to play this role. Examples of impact include in one case a service user has been able to show how the myriad of interventions in one neighbourhood are not delivering results – getting people into jobs in this

case – because of their failure to see the problem from user perspectives.

This same area has emphasised the need to think long-term about developing these roles and investing in the

skills and understanding of public services, briefing residents – as well as developing shared

understandings through evidence, This also requires ensuring that unnecessary public sector jargon and

process is modified to make it accessible.

CO-DESIGN: PILOT ACTIVITY AND PLANS

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Co-production varies and was reflected in pilots’ aspirations for community involvement

Co-production in NCBs

Areas talked about co-production in various ways in interviews, reflecting Bovaird’s forms.

This also ranged from long-term visions involving real co-commissioning, the description of co-

governance mechanisms, to considering whether the community would be able to deliver or co-

deliver particular services and the articulation of broad aspirations for the community to play a more active role in the community, rather than rely on

handouts. “… More community involvement, local service

providers working collaboratively, working with residents to co-design services … Generally people being

involved in learning and doing something and everyone talking about what they can do”.

What is co-production?

Bovaird (2012) suggests there are 8 different forms of co-production:

•Co-governance of area, service system or service agencies – e.g. neighbourhood forums, school governors•Co-commissioning services – e.g. personal budgets, participatory budgets, devolved grant systems•Co-planning of policy – e.g. deliberative participation, Planning for Real, Open Space•Co-design of services – e.g. user consultation, user-designed websites, Innovation Labs•Co-financing services – fundraising, charges, agreement to tax increases, BIDs •Co-managing services – leisure centre trusts, community management of public assets•Co-delivery of services – peer support groups, expert patients, Neighbourhood Watch•Co-monitoring and co-evaluation of services –user on-line ratings, tenant inspectors

CO-PRODUCTION:

2 areas recommended being very aware of language used with, and about, the community – people or

neighbourhoods shouldn’t be seen as a problem, but as assets. Other pilots also talked in these terms.

It appears to be a key condition behind challenging paternalism and harnessing people’s willingness to be

involved.

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The importance of joining up the localism agenda at a local level

Areas are engaging with other localist policies – particularly neighbourhood

planning and asset transfer. 6 (check) areas are interested in or actively exploring asset transfers.

5 areas talked about neighbourhood planning, (described as the ‘flip side’ of

NCBs). The formal status of NP Neighbourhood Forums was seen

positively.

Some areas acknowledged they were not adequately aware of other localist

initiatives and said they could be better joined up locally.

A plea for consistency across central government departments and agendas

Some areas identified inconsistency across the localism agenda among different government departments; e.g. it was suggested health reforms and restructuring made it

more difficult for communities to influence decisions.

“ It feels like [the agendas are] going in two different directions”.

Areas also said troubled families policy is sending conflicting messages to areas about local control.

Areas suggested DCLG needs to do more to ensure other departments are fully behind localism and devolution.

“DCLG are trying to make the change, but other

departments don’t understand what you are trying to achieve and what role they can play”

LESSONS ON LOCALISM: JOINING UP

Areas suggested localist policies could be better joined up locally and nationally.

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Pilot areas value being a pilot. Non-pilot areas see positives and negatives of not being pilots.

Pilot areas

Areas said government support (financial and non-financial) had a really important and positive impact, even while recognising there is a certain irony in this:

“There is an irony in that, to achieve meaningful engagement often at very local level, sometimes you have to take recourse to friends in high place and being able to point out that this Programme is being supported by Eric Pickles is very useful”.

Areas said being a government pilot provided added status and focus, helped them to get ‘partners around

the table’ – particularly LA partners – and enabled them to be more challenging of partners’ commitment:

“[Being a pilot] has meant we have been able to chuck a bit more challenge at partners, which has been useful in terms of

buy in and arguing the case; [arguing that this is] a real opportunity to in form what government does next.”

Relationship managers’ work was also highly valued.

LESSONS ON LOCALISM: CENTRAL SUPPORT

Non-pilot areas

Telephone and face-to-face interviews with non-pilots revealed there were mixed

feelings about being outside the pilot programme. Some areas suggested not

being a pilot meant they were less successful because there was less focus and impetus,

whereas others felt it meant they might ultimately be more successful because they

had more time to build trust and relationships. Some areas saw both sides:

“In some ways its better to have the freedom to work more widely – however it might have been good to have someone to push us, to be focused and get some tangible outcomes – so there are two sides to it”.

(non-pilot area)

The importance of central government support in the context of localism

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Key References

• Bovaird, T (2012) Economies of Scale vs. Economies of Scope: Review of the Evidence and Implications, Slide pack for DCLG POLICY & EXPERTS ROUNDTABLE

• DCLG (2011) Communities in the driving seat: a study of Participatory Budgeting in England Final Report https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/6152/19932231.pdf

• Lowndes, V. and Sullivan, H. (2008) ‘How low can you go? Rationales and challenges for neighbourhood governance’ Public Administration 86 (1) 53-74

• Richardson, L (2012) Working in Neighbourhoods, Active Citizenship and Localism, JRF http://www.jrf.org.uk/publications/working-in-neighbourhoods

• Taylor, M (2000) Top down meets bottom up: Neighbourhood Management, JRF http://www.jrf.org.uk/publications/top-down-meets-bottom-neighbourhood-management

• The Young Foundation (2010) Managing the risks of neighbourhood governance http://archive.youngfoundation.org/files/images/ingtherisksofneighbourhoodgovernance25_10_06.pdf

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The objective of the Overarching Evaluation of the NCB pilot programme is to provide evidence on:

The pilots were set upto test how control of services

and budgets can be pushed down to neighbourhood level and

create efficiencies.

Learning from the process of community engagement and whether and how this shaped the Operational Plans

Learning from the process of developing the budget and whether and how pooling resources/joint working leads to savings and

benefits

Whether and how effective accountability mechanisms are being developed and whether innovative approaches are being taken to

this

The potential value of the NCB approach compared to the current approach

The early findings reported here draw on:

• Interviews with pilot areas undertaken in November about the process of developing the focus of the budget, issues around governance and understanding next steps in relation to co-design and identifying the budget.

•Feedback from pilot areas on the first two evaluation outputs

•Information on governance included in the draft Operational Plans submitted by all areas in September

The Overarching Evaluation focuses on the NCB pilot

programme over the financial year 2012-13. It is being

undertaken by DCLG analysts carrying out qualitative

interviews to capture learning as the pilots go through the process

of developing their plans.

ANNEX A: THE OVERARCHING EVALUATION

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Existing literature indicates there is a key, but changing, role for local councillors in facilitating neighbourhood decentralisation. An AHRC* policy review will provide further information in April 2013.

ANNEX B: LITERATURE ON COMMUNITY GOVERNANCE

The literature suggests that local councillors should play

a key role in facilitating the Localism agenda, whilst acknowledging that this may require a changed role and

the development of particular (new) skills. • Urban Forum’s report ‘Local Democracy Revisited The

Changing Role of Local Councillors’ (2011) suggests that local councillors can have a key role in interpreting the changes

introduced in the Localism Bill for local people and enabling them to take up new powers by acting as intermediaries.

•The 2012 JRF Report by Liz Richardson ‘Neighbourhood Working, Active Citizenship and Localism: Lessons for policy makers and practitioners’ concludes that there is a key role for

councillors in facilitating civic participation, but that this needs development

•OPM’s 2012 report ‘Unlocking local capacity’ presents the case for local authorities, officials and councillors to re-consider their approach to fostering local community capacity, recommending

that councillors are at the front of this process. •A report on community governance in Australia - ‘Evolution in

Community Governance: Building on What Works’ - by McKinlay et al suggests that although there are tensions between

representative democracy and community governance, local government has an inherent role in assisting communities to

determine their needs, preferences and priorities, although this may require skill development.

An AHRC Connected Communities Policy Review, due to report in April

2013, will explore some key unresolved issues around community

governance in the context of decentralisation.

Issues the review will consider include:• the ambiguity over citizens’ roles in

terms of whether they are acting as community representatives or individual

experts

•the challenge of creating a form of community governance that is informed by

expertise from across the community without creating a burden to those not

interested

•the challenge of encouraging local tailoring and diversity whilst addressing

differential capacity in communities

•the risks associated with ceding control to the community and how these can be

more creatively managed

The review is being undertaken by Catherine Durose and Liz Richardson

*AHRC – Arts and Humanities Research Council