Headlines: June 27th, 2011

The claim by Communities and Local Government that councils could cut their spending by £450 per household is conjecture supported by no evidence. The Guardian challenged the basis of the claim and found that possible savings in a limited area of procurement had been extrapolated without any supporting data.

CLG claimed that councils could save £10b annually, equivalent to £450 per household, by improving the way they buy, source and pay for goods and services. The claim was based on an analysis of council spending data by procurement experts Opera Solutions. The saving would represent 20 per cent of the £50b councils spend each year.

Local Government Secretary Eric Pickles said: “Householders trying to balance their bills are advised to look closely at where all their money is going, change suppliers, shop around and hunt out the bargains. Town halls need to follow exactly the same advice.” He added: “If councils improved their procurement and joint working on waste services, councils could afford to offer more frequent and regular rubbish collections. There’s no excuse for cutting the front line when there are so many savings to be found in the way back office services and run and paid for.”

The reality was shown by The Guardian to be very different. The six page Opera Solutions report contains three lines of data showing that councils could save 10 per cent of the annual £7m spend on energy bills and on the £6m spend on solicitors fees. The largest saving of 20 per cent was on mobile phones where the annual spend is £0.6m. There is no working for any of the savings and no description of how the savings were calculated. There is also no explanation of how the higher saving of 20 per cent on mobile phones was applied to the total procurement budget.

The largest proportion of expenditure by councils is on social care, which accounts for £10b of the £50b budget. This is mostly spent on residential care. Shopping around is unlikely to save 20 per cent of this budget.

Publicnet is among a number of media organisations that published this story in good faith.