Town halls surpassing £1.2bn target

21 Jul 05
England's councils could exceed their £1.2bn efficiency target for 2005/06, according to a comprehensive study of 152 local authorities by IPF, the commercial arm of CIPFA.

22 July 2005

England's councils could exceed their £1.2bn efficiency target for 2005/06, according to a comprehensive study of 152 local authorities by IPF, the commercial arm of CIPFA.

The survey, published on July 22, reveals that English councils are on course to exceed their £1.9bn efficiency target for 2004 to 2006, as outlined by the Office of the Deputy Prime Minister following Sir Peter Gershon's 2004 savings review.

Councils achieved more than £700m of efficiencies in 2004/05 and are set to meet, and possibly exceed, the £1.2bn target for this financial year, after successfully identifying further areas for improvement.

'Just over half of the proposed improvements are in corporate and support functions, rather than service areas,' IPF concludes, following its second analysis of councils' annual efficiency statements.

Corporate services account for around £300m of the total savings, while adult social care (£300m), social housing (£150m) and environmental services (£140m) are other key savings areas.

John Tench, IPF's adviser for the CIPFA improvement and quality network, said: 'Key challenges for councils now include integrating the efficiency agenda with other improvement activities and tackling "breakthrough" issues, such as sickness absence, that have previously proved difficult.'

But authorities in London are privately concerned that they will lose significant sums of money from their social services efficiencies if the ODPM goes ahead with its plan to introduce three-year finance settlements.

One London borough told Public Finance that retaining a 'larger-than-planned' level of the social services savings could help the capital's authorities. The Association of London Government said the proposal would have a 'severe' effect on many social services in the capital.

Local government minister Phil Woolas announced on July 19 that the ODPM would introduce three-year settlements from next year, although they will not be aligned with the Spending Review cycle until 2008/09.

Woolas said it 'will provide greater financial certainty and stability for local government, council taxpayers, businesses and other local partners'.

Woolas also launched a consultation paper on the formula for grant distribution that would underpin the settlements.

The consultation, which will run until October, will assess how to make the grant from central government flexible enough to accommodate future local spending plans and to reflect councils' individual circumstances.

PFjul2005

Did you enjoy this article?

AddToAny

Top