Allen: £1m for each early intervention council needed

Each of the 27 councils that have shown willing to invest more in early intervention services should get £1m initially to help them pilot different ways of contracting for outcomes, Graham Allen’s second report on early intervention, published today, has recommended.

However, over the next four years an Early Intervention Fund, in close co-operation with the Big Society Bank, should aim to raise £200m from various funding streams such as private investment, the government commissioned report added. This sum could provide services for 10,000 families.

The 27 Early Intervention Places were established in Allen’s first report and include councils such as Birmingham, Hull, Blackpool and Haringey. Allen also recommended these areas be at the forefront of the roll-out of Community Budgets

Allen’s report added: “In the longer term, once a greater track record of programmes has been developed in the UK and these approaches spread to all areas, I believe that up to £1bn of investment could be used across the UK.”

Allen proposed a migration of funding of 1% each year from late intervention budgets to early intervention.

The report focuses on building a market for early intervention services, including the creation of a payment- by-results system within children’s services.

The system should be overseen and continually assessed by an early intervention task and finish group, the report said, which would consist of a “dedicated team of experts” with representatives from major spending departments, the Cabinet Office and HM Treasury.

The system could operate so that the risk involved would lie with investors rather than providers, Allen said.

“Issues of timing and risk will be particularly tricky and will need to be adequately addressed so as to build investor confidence and develop the market,” the report said.

As a result, the government would have to encourage investors to take a chance with early intervention by creating tax incentives accordingly, according to the report.

The report also proposed the establishment of an early intervention fund or funds, which would be developed to offer investors a diverse range of early intervention products. Allen said this should be established in close co-operation with the Big Society Bank and driven forward by the government, local areas and the Early Intervention Foundation, working with fund managers such as social intermediaries or banks.

Allen also floated the idea of local authorities creating bonds. However, this system would only be considered as the market developed.

The importance of co-ordination between early intervention places and community budget areas, where local authorities have been given full control of their budgets, was also emphasised.

The report said eight of the local authorities that put themselves forward as early intervention places are also operating community budgets. Allen said these areas should be given freedom to extend their service redesign work to include early intervention services.

“These local authorities should have access to the same level of support as the local authorities operating the new families with multiple problems community budgets. This should specifically include access to a Whitehall champion, advances on the future years early intervention grant and other kinds of specialist support in developing evidence-based approaches in order to enable strategy and systems change,” he said.

KEY RECOMMENDATIONS

– When planning the next comprehensive spending review, the government should consider making early intervention its theme, with a steady incremental migration of funding by 1% per year from late intervention to early intervention.

– There should be an early intervention task and finish group, which would oversee the establishment and measurement of early intervention outcomes, as well as the payment by results system.

– NHS systems and organisations should give priority to early intervention during the current process of reform.

– The government should support joint working between early intervention places and community budget areas.

– A £20m endowment should be created to sustain an early intervention foundation.

– The sector needs to be much more creative in finding additional (not substitute) non-government money for early intervention. This will require payment by results contracts.

– Central and local government should agree to pay early intervention payment by results payments.

– The government should enable private money to be attracted to early intervention through the establishment of an early intervention fund, in co-operation with the Big Society Bank. This initial fund should look to raise around £200m of investment.

– Local authorities should be allowed to borrow against cost savings from payment-by-results contracts.

– HM Treasury should commission a thorough review of early intervention growth incentives ahead of the 2012 budget to assess what more the tax regime can do to enable investors to support early intervention.

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