Headlines: September 20th, 2006



English local councils have delivered 1.2 billion pounds worth of efficiency gains in the financial year 2005-6. The savings come on top of the 700 million pounds in efficiencies achieved the previous year but they are still being warned more is needed.

The latest figures have been published by the Department for Communities and Local Government based on local authorities’ own annual backward look efficiency statements. The level of gains is higher than the councils had predicted in their forward look statements, published in June last year.

Authorities have already indicated they are likely to make even more efficiency savings. Statements in June this year predicted likely gains of 1.3 billion pounds in the current financial year. It means local government is on its way to meeting the target of 3 billion pounds of efficiency savings set in the Gershon review a year ahead of schedule.

Local Government Minister Phil Woolas, said the figures showed local authorities’ commitment to finding further opportunities for efficiency gains and he stressed that efficiency was not about making cuts, but about working in smarter ways. He cited the example of the first wave of national e-auctions, which had generated efficiency gains of almost 13 million pounds, which is equivalent to an average saving of 27 per cent on each contract.

“I am pleased that these savings can now be used to improve front line services for communities or to keep down council tax increases,” he said but added that there was still work to do. “I expect local authorities to maintain their momentum and continue to strive for greater efficiency,” Mr. Woolas said.

Of the total of 1,237.6 million pounds in savings, 898.7 million are reckoned to be cashable, that is 72.6 per cent. The biggest contribution has been from adult social services where actual gains were just over 202 million pounds, almost two thirds of which were cashable.