Place based finance: A new model of financing local outcomes
Place based finance
A new model for financing
Today’s public service model is
Demand and costs going up
Funding going down
Handling failure rather than trying to prevent it
Public services are seen as bureaucratic, remote
and bogged down in process
• The economy is managed top down and policies are
‘one size fits all’.
Local growth isn’t working either
• The national economy is growing again
• But there are:
Areas where performance is weak and resilience poor
High levels of youth unemployment
‘Re-wiring’ public services said:
• Allow each place to act as its own local treasury,
managing local tax and spend and driving growth
• A local treasury to provide the incentive for a local
budget for growth and choice, rather than silo
budgets to fund services.
• [it] would have the ability to flex business rates and
other taxes including for example tourist or sales
• Local Treasury = Place based finance
What principles underpin the
• Local democratic accountability for all local services
• Equity and fairness in outcomes between places
(national statutory entitlements)
• Fairness in funding distribution across the UK and
• Strategies for growth should be local to lend
resilience to the national economy
Place based finance
• Responsible for
– public value and the local
– raising local taxes
– allocating funding to drive local
outcomes and improve services
– local borrowing, prioritising and
– being a performance
management and consumer
• Not silo based or institutional
• Not a commissioner?
• Not a provider?
• Not any existing council?
Scope – what local functions covered?
Geography- what area covered?
Money in – where would it come from?
Money out - where would it go?
Accountability – how would it work?
Assurance – how would national govt. be
assured standards were met
Testing place based finance
Financial sustainability and
– Councils, CCGs
– Resilient new network
– Children’s services
– Health/social care integration
– Skills and enterprise
– Road building and maintenance
– Transport integration
– Resilient network of sub-national
Local – not another layer of
National – more effective delivery of
Democratic renewal and civic
Involvement of :
– Democratically elected
representatives and local people
– PCCs, Fire, CCGs, FE colleges,
– Chambers of commerce and
– Universities, housing associations
• A solution is needed to an unsustainable public service and
• Local treasuries would ensure local people get the results and
local services they need by giving them power over local
taxation and how their taxes are spent.
• It is a new structure for local services and local growth where
spending and delivery are more resilient and more visible to
local people and national government.
• How would place based finance work in the West
• What are the particular West Midlands issues we
would need a local treasury to address?