(This blog originally appeared in Public Finance magazine.)

Community budgets that pool funding for services could dramatically improve mental health provision. This ‘whole place’ approach should be backed in the Spending review.

Public Finance recently reported that the Treasury was set to expand the use of ‘whole place’ or community budgets in the forthcoming spending review.

Pooled budgets have for a long time shown great potential to improve outcomes for vulnerable or marginalised people while improving value for public money. Nowhere is this more evident than in the range of services that come into contact with people facing or living with mental ill health.

Many mental health services, for children and adults, are already commissioned jointly by health and local government, bringing health and social care services into single teams. This can help to foster the kind of integration that many other health services are now striving to achieve for people with long-term physical conditions.

But it represents the tip of the iceberg of what might be achieved through a more comprehensive and wide-ranging approach to pooling public service budgets around people, families and communities.

The government’s mental health strategy, No Health Without Mental Health, set out two key aims when it was published in 2011: to improve the mental health of the nation, and to improve the lives of people with mental health problems.

Achieving both of these goals requires concerted action, not just from health and social services but also from schools, housing and employment services, the police and many others. People who face homelessness, who are out of work and who experience violence or abuse, for example, have a high risk of mental ill health. And people with mental health problems are more likely to lose work, get into debt, have poor physical health and have problems with drugs or alcohol.

Unless all of the necessary services come together to meet the whole needs of people with mental health problems, none will achieve their intended outcomes and the overall cost of this missed potential will run to many millions.

Work Programme providers, for example, will struggle to help people with mental health conditions to sustain paid work if they are not working closely with local health services. Likewise, mental health services get better outcomes where more of their service users are in paid work and to achieve this they need to integrate health and employment support.

Yet on the ground health and employment services have found joining up to be difficult. Different funding systems, outcome measures and incentives pull services apart rather than drawing them together, and joining up is achieved only by working ‘against the odds’.

Many of the most promising interventions to improve mental health and reduce health inequalities take time to produce tangible financial benefits. Children with early starting behavioural problems have a nineteenfold greater risk of being imprisoned as well as higher rates of teenage pregnancy, suicide and unemployment. There is a range of highly effective parenting interventions yet only a small proportion of families who need them are offered help.

The benefits of these schemes far exceed their costs and represent excellent value for money. But these benefits take time to be realised in full and they don’t predominantly accrue to the budgets of the services that pay for them.

The costs of mental ill health – to individuals, families, the economy and public services alike – are so great that the benefits of pooling budgets to invest in effective, early interventions will be substantial.

For local authorities, community budgeting offers one way of bringing a range of services together to reduce some of the biggest health inequalities in our society.