12 November 2004
Local authorities will have to submit efficiency statements next April, outlining how they will reach the £6.45bn savings target, which will be measured under the Comprehensive Performance Assessments, the latest guidance indicated this week.
A technical note from the Office of the Deputy Prime Minister and a pack sent to council chief executives on November 8 outlined how the efficiency plans and gains in these statements will be measured.
A pilot research project, run by the Institute of Local Government Studies and involving 60 councils, is already examining two options: a self-assessment model or a framework assessment.
The Local Government Association favours a self-assessment model where the Audit Commission can verify changes to the quality of services. The framework system could involve meeting a set of efficiency indicators.
'The potential is to have a huge bureaucratic grow-out. We don't want some new measuring system that councils have to go through,' said Keith Beaumont, programme manager at the LGA.
The commission also said it would favour the self-assessment model. A spokesman added: 'We welcome the proposal that annual efficiency statements are included within the scope of the use of resources assessment for CPA.'
As Public Finance predicted on October 29, the note states that councils will have the flexibility to meet the gains in service areas how they see fit. The Gershon review had clearly set out where savings should be found, but the note states: 'The system is flexible in terms of the activities that can be counted. The measurement approach proposed is not restricted to these areas.'
Beaumont said he expected that the ODPM would also be flexible on the requirement that at least half of all the £6.45bn savings are cashable. 'Efficiency savings are about making money go further. As long as they are delivered, that is the key thing.'
He added that there was still little guidance on how non-cashable efficiency savings can be measured. He said the Inlogov pilot might cast some light on this.
The guidance also outlined what will not be counted as an efficiency gain and included re-labelling services, increasing charges to the public and transferring costs between services.
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