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Confusion as £2.6bn savings set out

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There has been confusion over the £2.6bn local government efficiency target, released alongside the Chancellor’s pre-Budget report.

Figures in Alistair Darling’s report, published on 9 December, showed councils would be set a figure of £550m in savings by 2012-13 from more efficient waste collection and disposal services and reduced duplication between different tiers of government.

However, Department for Communities & Local Government officials later claimed that councils would also be asked to find £1.8bn in savings from more efficient back-office functions, but were unable to point to the official documents containing the target.

Councils will also be asked to find £250m by reducing variations in spending on residential care as part of the plan to guarantee free home care for the most needy users.

The Local Government Association claimed the figures had been identified by Whitehall departments and not in consultation with authorities.

“We are pressing for further details on the basis of these calculations in order to reach a view about whether they are achievable,” said LGA director of finance Stephen Jones.

“It is vital that government avoids the risk of duplication in terms of efficiencies which authorities are already making to meet existing efficiency targets.”

The £1.8bn figure appears to be a repetition of a target set as part of the current spending review period. As part of councils’ original £4.9bn target to be reached by the end of 2010-11, £1.8bn was to be found from back-office savings. DCLG officials have confirmed councils will be expected to find this amount again by 2012-13.

But David Locke, who heads the main programme set up to help meet the original goal, admitted savings were unlikely to be made in time to count towards the original target.

Of the nine councils working with Mr Locke’s Delivering Efficient Corporate & Transactional Services (Decats) programme for Local Partnerships, four have gone through the initial ‘diagnostic’ period, signing off business plans in the past six months, identifying £350m of potential savings.

However, Derby City Council is the only participant to have begun implementing the recommendations of the first phase of Decats, which aren’t due to deliver any payment until 2012-13.

“There are definitely savings available from simplification and standardisation but I think those targets are fairly challenging,” said Mr Locke. “First there is investment needed and then new ways of working will need the reconfiguration of office accommodation.”

Mr Locke claimed that once savings had been identified, the period over which the savings would be realised would be “three to five years”.

Adding to doubt surrounding the achievability of the targets, DCLG published figures showing councils were likely to miss their target for the second year of the current spending review period, even before it was increased at the time of the Budget this year.

Before the overall target of £4.9bn was increased to £5.5bn in April’s Budget, councils were expected to have made £3.2bn at the end of the second of the three years. DCLG figures showed councils predicting savings of £3.1bn.

The PBR contained a number of other efficiency savings targets relating to local government, including £180m from administrative improvements and raised eligibility criteria for concessionary travel.

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Readers' comments (1)

  • There was consultation on Joint Waste Authorities last year which were generally not acceptable I believe. This clearly shows that Districts will have waste collection taken away from them. As that is usually their prime service, every aspect of District working is jeopardised.

    The biggest waste burden is the imposed Land Fill Tax that this government promised would not cost Councils extra!

    They also continue their fascination with shared services and reductions in transactional costs, usually creating poorer services and increased transactions.

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