Efficiency targets hold no fears for councils

19 May 05
English local authorities are targeting adult social services and corporate activities in their drive to meet the £6.45bn efficiency target set by Sir Peter Gershon, a study has found.

20 May 2005

English local authorities are targeting adult social services and corporate activities in their drive to meet the £6.45bn efficiency target set by Sir Peter Gershon, a study has found.

An analysis by IPF of the first set of annual efficiency statements, submitted to the Office of the Deputy Prime Minister by councils in April, has found that £374m of the expected £1.15bn savings in 2005/06 will come from these two areas.

Social services directors intend to expand the use of direct payments to users, promote independent living and focus on commissioning services from private sector providers to achieve savings of £180m.

Asset sales, debt reduction and reviews of management structures all figure prominently in plans to make savings on corporate activities worth £194m, the study found.

But better use of procurement, which has been promoted as the key to more efficient resource management, is expected to deliver just £100m of this year's planned savings.

The study, published by CIPFA's commercial arm on May 17, also revealed a determination by local authorities to meet the 2.5% annual savings target outlined in the Gershon programme.

It found that nearly all councils are being more ambitious and aiming for savings of almost 3% this year, with shire district and unitary authorities leading the way.

John Tench, IPF's adviser for the CIPFA Improvement and Quality Network, said: 'Councils appear confident that they can meet the efficiency challenge, with elements of good practice already in existence in all authorities.

'The overriding feeling seems to be that the key challenge will be to demonstrate achievement without getting obsessed by the number-crunching.'

Audit Scotland, meanwhile, has fired a shot across the bows of the Scottish Executive over its claims of savings from its own efficiency review. In a letter to officials in the Executive's efficient government delivery group, deputy auditor general Caroline Gardner said savings were not well defined or identified.

She added: 'In addition, there is a risk of double counting some efficiency gains, and associated development costs are largely omitted from savings calculations.'

The criticism voiced by Scotland's public spending watchdog is a setback for the efficient government plans at a time when these are being strongly promoted by First Minister Jack McConnell and Finance Minister Tom McCabe.

McCabe is seeking an early meeting with Audit Scotland to clarify some of the points raised.

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