17 December 2004
Councils were given an early Christmas present this week, when they were told they would no longer be responsible for finding £3bn in schools' and police authority savings called for in the Gershon report.
Following pressure from the Local Government Association, responsibility for overseeing councils' contribution to education and police efficiencies has been passed to the Department for Education and Skills and the Home Office.
School savings represented around 37%, or £2.38bn, of the £6.45bn efficiency savings earmarked for the local government sector by 2008 following Sir Peter Gershon's review. Police authority savings represented a further 10%, or £645m.
Public Finance understands that the Department of Health has also taken full responsibility for overseeing £650m in efficiencies earmarked for local adult social care.
Sue Reid, head of local government modernisation and efficiency at the Office of the Deputy Prime Minister, announced the police and school changes when she addressed the LGA's annual general assembly on December 15.
She later told Public Finance: 'This represents a big chunk of the efficiency targets that local government held responsibility for. They will now be passed to the individual departments. These savings still have to be found, so the overall targets remain. But the ODPM recognised that the devolved budgets for schools, for example, leaves pretty limited leverage [for councils] to do what they want. It is sensible to pass oversight to the departments responsible.'
The government's Education Bill, published on December 1, will ensure that schools are funded directly by the DfES, effectively bypassing local education authorities. Police forces still receive a large proportion of their annual budget directly from the Home Office.
The changes leave the rest of local government to find efficiencies of just £3.5bn per year by 2008. Half of that could be measured by 'non-cashable savings', or improvements in service quality.
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