Headlines: March 31st, 2010

Efficiency savings which depend on partners carry a much greater risk and the Audit Commission is concerned that some expectations will not be met. Councils are planning for savings of between 1 and 15 per cent over the next three to five years, but progress towards these targets is very variable.

Efficiencies based on sharing services with other councils or agencies are a key element of many savings plans. While some initiatives are delivering on time; others have failed or the estimated savings appear unrealistic. One county council was working with district and fire authority partners on a major shared support services project covering finance, human resources, IT and property services. Potential savings were more than £80 million across the partners, with £45 million savings over ten years for the county. However, one district pulled out because of incompatible finance systems and another because of fears of outsourcing jobs from the local area. The project was wound up in December 2009 without delivering any savings.

Other savings with a joint working element include outsourcing, service reviews, de-layering management structures and reducing the size of senior management teams. These savings require significant lead-in times and large savings cannot be achieved quickly.

A number of efficiency plans also rely on partnerships for future savings, but as with shared services, these plans are often vague or the timings optimistic. Savings generated through working with others takes time, and may not deliver the scale of savings needed.

The Commission examined the risks involved with joint working and found that developments could be hampered by a legacy of mistrust, poor relationships with partners or neighbours, or uncertainty surrounding local government reorganisation. But there is evidence that these barriers can be overcome with members’ support and leadership.