Headlines: May 19th, 2005

Local councils intend to make efficiency gains exceeding 1.1 billion pounds in the current year according to a survey by the Chartered Institute of Public Finance and Accountancy. This is equivalent to 20 pounds per head of the population. Over half of the efficiencies are being sought from individual service departments such as Social Services, and the remainder from activities either supporting or cutting across several direct services to the public. The savings are being sought in response to the government’s overall drive to make significant efficiency and effectiveness gains recommended by Sir Peter Gershon last year.All councils have been set targets of annual year-on-year savings, equivalent to 2.5% of their spending last year. Councils’ plans provide for gains equivalent to at least 2.8% per annum for the country as a whole. At least 2.1%, or more than 870 million pounds, would be cashable, that is tangible real monetary savings, as distinct from increased output for the same spending.

Commenting on the analysis, John Tench of CIPFA said: “It is very interesting to see the wide spectrum of activities and services which are targeted for savings. Adult social services and corporate services are particular popular targets. The latter account for nearly one quarter of the savings in the smaller District Councils. In total, all councils are seeking gains worth more than 190 million pounds in this area from a number of measures, including partnership working, reviewing management structures, streamlining HR, payroll, and other finance processes, and more effective workflow such as e-government initiatives.”