CIPFA: Govt’s efficiency agenda could threaten local services
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Wednesday, 10, Oct 2007 12:00
Councils are becoming more efficient, but will find it increasingly difficult to meet more demanding government savings targets without affecting front-line services, according to the results of a survey published by the Chartered Institute of Public Finance and Accountancy (CIPFA).
The paper, which was produced by CIPFA’s Performance Improvement Network and draws on a survey it conducted of English councils’ annual efficiency statements, points out that local authorities will beat central government’s savings targets for the three-year efficiency period – and by a wide margin. However, tougher times lie ahead, particularly as councils are expected to deliver annual gains of 3% under the Comprehensive Spending Review.
Key findings of the survey include:
Local authorities remain on target to beat the government’s target of realising 7.5% efficiencies by a wide margin – more than half achieved this a year ahead of schedule
Authorities anticipate delivering an increasing amount of efficiency by improving procurement practices and negotiating cheaper prices
Councils also expect to become more efficient by changing organisational structures and practices, absorbing additional costs and making better use of corporate assets
Although some efficiencies have been embedded into new working practices and should continue over the longer term, an increasing number of authorities are relying on activities that may not be sustainable and/or affect the quality of front-line services. These include postponing non-essential maintenance work, giving lesser-qualified staff managerial tasks and agreeing below-inflation pay awards
In many cases, councils’ estimates for 2006/07 included over-optimistic predictions about where the gains would be delivered. This was particularly the case in procurement and, to a lesser extent, adult social services, although extra efficiencies from corporate services were largely able to make up the difference.
Peter Connolly, Assistant Director of CIPFA Networks, said:
“Local government has responded very well to Peter Gershon’s original report and the subsequent Whitehall target to deliver 2.5% efficiencies year-on-year. This has now risen to 3% under the Comprehensive Spending Review.
“Particularly concerning is the fact that predictions for savings from the procurement workstream appear to have been so inaccurate in 2006/07. This does not bode well for the future, as councils hope to rely even more on better procurement to deliver efficiency in 2007/08. With demands on adult services also set to increase as the population ages, councils have a huge challenge ahead of them to continue delivering high-quality services at reduced cost.”
ENDS
Contact: Guy Roberts, Richard Taylor or Vicky Onslow
CIPFA Press Office, tel: 020 7543 5712/5687/5645
email: pressoffice@cipfa.org
Notes to Editors:
The Performance Improvement Network is running a series of interactive workshops during October to assess the findings of the survey and discuss how local government can demonstrate that it provides value for money to the taxpayer. More details can be found at www.cipfanetworks.net/pin/events.
The paper, The Efficiency Agenda: Preparing for the future and learning from the past, is available via www.cipfanetworks.net.
The Chartered Institute of Public Finance and Accountancy (CIPFA) is one of the leading professional accountancy bodies in the UK and the only one which specialises in the public services. It is responsible for the education and training of professional accountants and for their regulation through the setting and monitoring of professional standards. Uniquely among the professional accountancy bodies in the UK, CIPFA has responsibility for setting accounting standards for a significant part of the economy, namely local government. CIPFA’s members work (often at the most senior level) in the public service bodies, in the national audit agencies and major accountancy firms. They are respected throughout for their high technical and ethical standards and professional integrity. CIPFA also provides a range of high quality advisory, information and training and consultancy services to public service organisations. As such, CIPFA is the leading independent commentator on managing and accounting for public money.