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Finance directors take safe line on efficiency savings...
Finance directors take safe line on efficiency savings

Government, take heed: councils may be playing the game on efficiency, but for many, it is an exercise in self-preservation. Finance directors privately admit the savings plans recently submitted by councils are deliberately lacklustre.

'Our concern is it will be used as a stick with which to beat us - or, more frighteningly, the government will say, 'We've asked you to save it, you have saved it, now we're going to take it out of your settlement',' says one director. 'I would expect to see a degree of conservatism because of that.'

'We've played the game the best we can, we know you get points for working with partners, but we haven't included the greatest amount of detail,' says another.

Directors concede that despite their public anguish, councils are far from being stretched by the 2.5% annual savings target. 'The target itself is fairly conservative,' says one. 'Most of it we've been doing for years, it's just that we have to formally record it, which is a bureaucratic chore.'

But another is at pains to distinguish cashable savings - 'they're real, we need those to balance our books' - and the non-cashable efficiencies which, he warns, 'could become a game'. 'Local government isn't like a production line, you can't say you produced more widgets for the same price,' he says.

The revaluation of domestic property values may not kick in until 2007, but it's already looming large on the radar of finance managers. Councils in England are casting worried glances at Wales, where a third of properties moved up at least one band post-revaluation.

'This is a real concern for billing authorities, as we're the ones who have to take the stick from the dear punters,' said one finance director.

Directors are also keeping an eye on the ongoing review of local government funding, due to be concluded by Sir Michael Lyons at the end of the year.

Sir Michael wins plaudits for his open and inclusive approach. But opinions are split over the likely outcome. One says the fact Sir Michael was 'babysitting' the review until after the election meant radical reform could be on the cards. But the majority are in the 'damp squib' camp. 'They will say it's too difficult to change it too much, there's no radical solution and we'll have to stick with what we've got,' is a typical prediction.

S151 officers are not impressed by recent moves to exclude the finance director from the top table in favour of the more fashionable director of corporate resources.

One officer warns: 'If there was a big cock up, like a council going bankrupt when the chief finance officer is at third tier, the repercussions would be massive.'

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