POLICYPROFILE
A Camden Black and Minority Ethnic Alliance, Policy Publication

Issue 1: September 2005

An Overview of Local Area Agreement

Summary

This briefing paper describes the background to local area agreement (LAA) and its implication for the voluntary and community sector (VCS) - in particular, its black and minority ethnic (BME) sector membership. In setting out these issues this briefing seeks to make clear that:

• The purpose of LAAs is to enable local partners to focus more effectively on the key priorities for improvement locally
• The purpose of LAAs is not to bring new money into an area, rather its purpose is to enable local partners to area manage existing funding more efficiently and effectively
• Government expects VCS organisations to play a key role in the development of LAAs in their boroughs and has made provision for this to happen
• The development of LAAs will have a direct impact upon VCS organisations currently in receipt of a diverse range of funding streams
• VCS organisations must begin to understand the LAA framework and be in a position to inform discussion and debate in their areas
• A deadline of March 2006 has already been set for all LAAs chosen in the second phase

Background and Context

In October 2004 the Government announced 21 areas (boroughs) to participate in a pilot initiative called LAA. Of these areas, two (Greenwich and Hammersmith and Fulham) were from London. The other areas were chosen from elsewhere in the country. Further details relating to the background and context to LAAs is set out under the various sub headers below.

The Framework

The LAA framework is relatively simple and straightforward. Government prescribes that LAAs are three-year agreements, which must focus on four priority themes:

• Children and young people
• Safer and stronger communities
• Healthier communities and older people
• Economic development and enterprise,

Under each of these priority themes, areas are then asked to identify key outcomes they want to achieve for local people. For example, under the children and young people theme an area might select an outcome like 'increase attainment at key stage 1.' The area would then identify a performance indicator for this outcome such as 'percentage of pupils who pass key stage 1 exams.' The area would then identify a performance target for the outcome. In this case, the target might be 'to increase pupil attainment at key stage 1 by 50% by the end of the agreement.

Funding Arrangements

The second important aspect of LAA is the funding arrangements. Government allows the area to pool specific area based funding into one pot, to enable local partners to better achieve their outcomes. In practice, this means that an area could decide to merge all the area based funding currently being received for children and young people, from Government departments, into one single funding stream.

Government itself promises to remove the ring fences and bureaucracy, to enable areas to pool all this funding together. This will then enable the area to better target money towards, for example, the key stage 1 objective described above. The removal of the ring fences, around grants, also means that money can be spent in those areas that are deemed to be the highest priority for that area.

It should be pointed out however; that Government only allows areas to spend pooled funding, within the theme from which it has been pooled. So for example, any money pooled under the children and young people theme has to be spent on children and young people outcomes. Similarly, any funding pooled under the healthier communities and older people theme must be spent on healthier communities and older people outcomes, and so forth.

'Single Pot' Local Area Agreement

There is however an exception to the 'pool and spend' rule described above. This exception is called the 'single pot' LAA. As the name suggest 'single pot' allows an area to pool funding from any of the four priority themes and spend it on outcomes across any of the priority themes. In theory, this could mean that area based funding pooled under the children and young people theme could be spent on outcomes under the safer and stronger communities' theme. Whilst, area based monies pooled under the healthier communities and older people theme, could be targeted for allocation against economic development and enterprise outcomes. The 'single pot' principle essentially frees up an area to decide for itself, how money should be spent and where.

Although, an area, can express an interest in becoming a 'single pot', it is entirely at the discretion of Government to grant single pot status. Only one area, Telford and Wreakin, was granted 'single pot' status in the pilot phase.

Freedoms and Flexibilities

A simple definition of a freedom or flexibility is the removal of a requirement (such as the requirement to produce and submit monitoring returns or a planning document) or the relaxation of a control (such as the various controls affecting the use of grant funding). Therefore in simple terms, if, as part of the negotiation of a LAA local partners can identify, a control or requirement that is likely to prevent them from achieving the targeted outcomes that they want, they can ask Government to free them from the requirement or relax the control.

It should be noted however, that Government already offers a number of freedoms and flexibilities to LAAs. For example:

• Reduction in monitoring and reporting requirements
• Removal of ring fences around funding streams
• Ability to carry over a reasonable level of unspent funds from one year to the next
• Streamlined payment mechanisms

The Process

It is important to note that LAA is a negotiated agreement. At local level for example partners must reach a consensus on the best approach to adopt, which outcomes to select, which funding streams to pool and how the target is going to be delivered. This consensual and negotiated approach is at the heart of the LAA process.

Once local partners have agreed, there is then an additional period of negotiation with the relevant Government Office. The Government Office essentially functions as an intermediary between Whitehall departments and the local area. The Government Office will help secure promises and commitments from Whitehall about the removal of funding ring fences and other freedoms and flexibilities needed to deliver the targets in the agreement.

Timetable

The Government Office has set a clear time live for the development of LAA. This is summarised in three stages below:

• Stage 1, by September 2005, to submit a vision paper to the Government Office setting out the basic ambitions and intentions of the area, in developing their LAA, any outcomes agreed and barriers to their achievement. The submission should also include a statement setting how the VCS is being and will be engaged.

• Stage 2, by November 2005 - submission of a draft agreement to the Government Office detailing all the outcomes to be included, indicators and targets. The submission should also include details of any freedoms and flexibilities to be negotiated as well as details of the various funding streams the area is seeking to pool.

• Stage 3, from November 2005 to March 2006, detailed negotiation with the Government Office on the draft agreement, leading up to the deadline for sign off by 24 March 2006 at the latest.

Implications for CBMEA Members

In June 2005 the Government announced a further 66 areas (boroughs) to participate in the second round of the LAA initiative. Of these areas, 15 (including Camden) are from London. A further 13 'single pot' LAAs were also chosen (five from London), although Camden was not one of these.

Engaging the Voluntary and Community Sector

Government guidance makes explicitly clear the fact that LAA is a partnership agreement. The expectation is that the Local Strategic Partnership should play a key role in facilitating discussion and debate and should endorse the agreement. It also makes clear that the Council, as community leader has an important role to play.

However, the guidance is equally explicit that the voluntary and community sector (VCS), must be fully engaged in all aspect of the development and delivery of the agreement. In particular guidance sets out that:

• LAAs will ensure the involvement of relevant stakeholders including in particular the VCS and local people themselves in helping to identify shape and deliver services

• The LAA should include a statement of the involvement of the VCS and local people in the design and delivery of the agreement (this should state how local people and the VCS have been informed, consulted and given the opportunity to participate in the LAA process and delivery of outcomes)

• The involvement of the VCS and local people should cut across the four LAA priority themes

• The LAA should state how partners have considered the capacity of the VCS to contribute effectively and how they can best facilitate the involvement of local people

• That capacity building (of the VCS) may be the means to achieving other outcomes or be an outcome in itself

Therefore in terms of the requirement for the VCS sector to be fully engaged in the development of LAA, there can be no ambiguity.

Equalities and diversity issues

Guidance also makes clear that LAAs have specific responsibilities under existing equality legislation. With particular reference to the provisions of the Race Relations (Amendment) Act 2000, LAA guidance sets out that partners will need to consider how the delivery of their LAA commitments is impacting on different minority groups. For example, will any health inequality targets, selected by partners for inclusion in the agreement, also address differential health outcomes that are race related?

Issues relating to pooling of funding

Depending on how you look at it, the pooling principle, whereby funding streams can be aggregated into either one pot (to be spent under a specific priority theme). Or a 'single pot' (to be allocated across any of the four priority themes) is the most controversial and inspired aspect of the LAA framework. The Governments rationale for proposing this new arrangement is based on a few very simple principles:

• Each area based funding stream that comes into an area has its own monitoring, reporting regime - removing the ring fences around these funding streams means that there will not be the need to monitor and report on lots of different funding pots

• Each area based funding pot requires administration - therefore if areas are allowed to pool these pots together they can operate more efficiently and save money

• There is no standardised measure of success across the various funding pot that an area receives - therefore by pooling the funding, partners can establish common definitions and measures of successful outcomes

• With so many different area based funding streams coming into an area there is the potential for duplication and silo working - therefore pooling this funding will enable partners to see more clearly how money is being spent in their areas and work more closely together

This is all very laudable. But there is no getting away from the fact that there are major implications here for the VCS - and in particular the BME sector. First and foremost, the amalgamation of funding will mean a certain loss of autonomy for organisations, which previously had funding passported (or passed) directly to them from Government. As it was, the direct passporting of funding to the VCS played a major role in empowering the sector and helped it to operate autonomously. Therefore one of the biggest challenges that LAA will face is to ensure that the removal of passporting arrangements will not result in the VCS becoming disempowered.

It should be made clear that the provisions, described earlier in this note, are intended to calm the fears of the sector with respect to this. Voluntary and community organisations will therefore need to place great faith in this new structure and do everything they can to ensure that the provisions of the guidance are carried through in practice.

For advice a list of funding streams that can be pooled into the LAA is attached to this policy newsletter as an Appendix. Please note however, that this list is not exhaustive.

Support for CBMEA Members

There is every sign that LAA is the context within which Government wants to see local partnerships define their priorities and manage area based funding in future. It is therefore in the interests of CBMEA members to get fully up to speed with the LAA policy framework. Clearly there are capacity issues here as many members are small organisations of limited means. Yet so significant is the impact of LAA that no member can afford to ignore it.

To best enable members to get fully up to speed with LAA and engage in the local conversation, CBMEA will be undertaking the following steps on behalf of its membership:

• Provide further updates and briefings on the LAA initiative

• Make representation to LB Camden to discuss LAA development in the borough and ensure that appropriate provision is made for the BME sector to shape and influence LAA development in the borough

• Undertake to be a first point of contact regarding any queries relating to LAA and where resources allow undertake basic research on behalf of members to determine how LAA might affect them personally

• Organise seminars and events on LAAs and invite keynote speakers to address members

• Liase with other boroughs to determine how the BME sector has or is being engaged in the development of LAA, with a view to importing any best practice into Camden

Contacts

This policy briefing was prepared by:
Monica Olusola, Director of Camden BME Alliance (CBMEA)

For further information about this briefing, in particular, or CBMEA in general, our details are as follows:

Address:
44 Hampstead Road
London NW1 2PY

Tel: 020 7388 6030
Fax: 020 7388 6040

Email: director@cbmea.org.uk
Website: www.camdenbmealliance.org.uk

Sources

The following source documentation was used in the preparation of this briefing

1. Local Area Agreements Guidance - Office of the Deputy Prime Minister, June 2005
2. The Local Area Agreement Toolkit - Office of the Deputy Prime minister, June 2005
3. Local Area Agreement Prospectus - Office of the Deputy Prime Minister, July 2004

Appendix: Funding Streams

Children and Young People
Adoption Support and Special Guardianship
Cares Grant
Child and Adolescent Mental Health Services
Children's Fund
Choice Protects
Community Support Grant
Communities for Health Monies
Connexions
Education Health Partnerships
Extended Schools (standards fund)
Kerbcraft
Attendance
Key Stage 3 Central Co-ordination
LEA Support for Workforce Re-modelling
Local Public Service Agreement Reward Grant
National Training Strategy
Neighbourhood Renewal Fund
Neighbourhood Road Safety Initiative
Neighbourhood Support Fund
Positive Activities for Young People
Primary Strategy Central Co-ordination
General Sure Start Grant (revenue)
Sure Start Local Programmes (revenue)
Teenage Pregnancy
Transforming Youth Work Performance
Improvement Fund
Vocational and Work Related Learning - funds are paid through Government Offices
Vulnerable Children Grant
Partnership Grant
School Travel Plans
Standards Fund - local authority retained element of amalgamated single grant

Healthier Communities and Older People
Disabled Facilities Grant
Falls Prevention
Healthy Living Centre
Learning Disabilities
Local Public Service Agreement Reward Grant
Neighbourhood Renewal Fund
Pension Partnership Fund
Physical and Sensory Deprivation Preserved Rights Grant
Relevant European Funding
Residential Allowance Grant
Supporting People
Targeted Voluntary Sector Funding (social services)
Training Support Grant
Safer and Stronger Communities
Anti Social Behaviour Grant
Building Safer Communities
Domestic Violence Grant
Drugs Strategy Partnership Grant
Home Office Regional Director's Allocation
Business Crime Reduction Advisors Grant
Tackling Violent Crime Programme
Neighbourhood Management Pathfinder
Neighbourhood Element
Cleaner, Safer, Greener Element (liveability funding)
Other funding streams
ASB Action Areas
Aggregates Levy Sustainability Fund
Anti Social Behaviour Trailblazer Drug Prevention and Treatment
Drugs Intervention Programme
Home Fire Risk Check Initiative
Local Public Service Agreement Reward Grant
Neighbourhood Renewal Fund
Rural Bus Subsidy
Section 16 Tenant Empowerment Grant
Single Community Programme Fund
Spearhead Monies
Street scene (Mainstream Budget)
Tenant Empowerment Grant
Waste Performance and Efficiency Grant
Economic Development and Enterprise
Local Enterprise Growth Initiative

Revised on 12 Mar 2007