Many councils are not ready to implement place-based budgeting and must shift from their ‘comfort zone’ to co-ordinate radical Treasury plans for devolved public spending, policy experts have warned.

Bill Cooper, local government partner at consultant KPMG, and Ben Lucas, director of the 2020 Public Services Trust think-tank, told The MJ councils and their partners must ‘get real’ over place-based budgeting prior to the Spending Review in October.

In an exclusive article for The MJ, to be published next week, the authors praise the Local Government Association for leading the sector’s snowballing campaign for place-based budgeting, dubbed Total Place under Labour and likely to become Community Budgets under the coalition.

The LGA recently estimated councils could help ministers save £100bn over five years through the devolved spending programme.

Treasury officials have warmed to the idea of merging public services budgets across a locality – such as council, health and criminal justice spending – into a single pot, and devolving decision-making over how cash is spent, and services prioritised, to local managers.

But as ministers consider whether to extensively pilot the programme, or opt for a ‘big bang’ roll out across England, both men warn councils against taking a blindly-optimistic approach.

‘The proposal has been presented in far too Panglossian terms, sitting in local government’s comfort zone, rather than confronting some of the difficult issues which would need to be resolved if it is to make the transition from paper to reality,’ they write.

In particular, they claim, there has been little discussion of the ‘significant variation in capability across local government’.

‘Not every large local authority has the capability and confidence to take on these new spending powers.’ They suggest making high-performing localities the ‘vanguard’ for place-based programmes including – the Manchester-Leeds city-region, Birmingham and the counties of Essex and Kent.

Senior personnel, however, want to avoid further pilots or experiments with place-based budgeting. The LGA is pressing the Treasury for a rapid roll out across England and is instead working on frameworks to raise the performance and capability of laggard authorities.

But Messrs Cooper and Lucas also warn councils not to view place-based budgeting as a means of hoarding new powers. ‘Much greater emphasis should be put on giving substantive power to citizens and neighbourhoods – this should not be seen as a recipe for stronger town halls,’ they write.

They warn authorities’ focus should become a ‘strategic commissioning’ role. Citing past failures with family-centred policies – such as welfare and children’s services provision. They argue early intervention programmes are best delivered at neighbourhood level, and may require town halls to pass on funding to grass-roots organisations.

As Britain remembered the third anniversary of the death of Baby Peter Connolly in Haringey LBC this week, that recommendation could reopen debate about the scope of future devolved services.

Finally, the authors warn a ‘more credible form of local accountability’ must be developed alongside place-based budgeting, so that localities are deemed responsible for the quality of locally-delivered services, and not national ministers.

Communities secretary, Eric Pickles, is considering measures to empower local leaders and make them more accountable to their communities, including the introduction of directly-elected, US-style ‘super mayors’ combining council leadership with the chief executive’s role.

Paul Raynes, LGA programme director, said the concerns raised by KPMG and the 2020 PST were ‘very live debates within the sector’.

He added: ‘The LGA is working closely with councils and central government to address the very issues raised here. There is already on ongoing programme focused on place-based productivity, for example.

‘There is still a debate ongoing about how we could role out the regime at maximum pace and, potentially, not have to revert to the old world of extensive piloting. ‘We’ll be submitting more evidence on all of these issues to the Treasury… over the next few weeks.’