EFFICIENCY AND IT PANEL

5 SEPTEMBER 2005

ANNUAL EFFICIENCY STATEMENTS

(FORWARD AND BACKWARD LOOKING)

CHRIS SWEENEY

Corporate Finance

Delivering Efficiency in Local Services – The Govt Agenda

• ODPM has the role of co-ordinating and leading the efficiency agenda for Local Government and has published guidance including definitions of what counts as an efficiency

• Clear Target for All LA’s of 2.5% per annum (against 2004/05 baseline)

• New reporting requirement for LA’s to complete an “Annual Efficiency Statement” (AES)

• LA’s to suggest performance indicators (“Quality Cross Checks”) in their AES to evidence that savings are true efficiencies and not just service cuts

• From 2006, AES’s will be reviewed as part of the CPA Use of Resources assessment.

• Government encouragement for sharing of best practice - “Regional Centres of Excellence” and “Change Agents” such as e-Govt partnerships have been established to work with LA’s

From 2005 a new statutory reporting mechanism for

efficiency gains - the “Annual Efficiency Statement” (AES)

On or before 15 April 2005(Forward Look)

Local authorities submitted details of their efficiency strategy and estimates looking ahead to 2005/06

On or before 15 June 2005(Backward Look)

Local authorities confirmed efficiency gains achieved in 2004/05, together with appropriate “Quality Cross Checks”

On or before 14 April 2006(Forward Look)

Local authorities submit details of their efficiency strategy and estimates looking ahead to 2006/07

On or before 16 June 2006(Backward Look)

Local authorities confirm efficiency gains achieved in 2005/06, together with appropriate “Quality Cross Checks”

17 November(Mid-Year Update)

waived for authorities with Excellent status

GERSHON REPORT - JULY 2004 - “RELEASING RESOURCES TO THE FRONT LINE”

• £20bn public sector efficiency gains by 2007/08, £6.45bn

of which from Local Government

• At least 50% must be cashable

• 2.5% year-on-year efficiency target (excluding Police, Fire

and Schools)

• For HCC = £41m by 2007/08

EFFICIENCIES MUST BE REPORTED IN AES AGAINST THE FOLLOWING GERSHON “WORKSTREAMS”:

CORPORATE SERVICESSimplification,

standardisationsharing services

TRANSACTIONAL SERVICES

IT systems, call centres, webservices

PROCUREMENTRegional buying, professionalising

PRODUCTIVE TIMEWorkforce reform,IT

Sickness management

Service Blocks: Adult Social Services, Children’s Services, Culture & Sport, Environmental Services, Local Transport, Non-School Education, Social Housing, Supporting People, Homelessness

Cross Cutting Areas:

HCC GERSHON EFFICIENCY TARGETS

Target

£m

2005/06 13.7 14.6

2006/07 13.7

2007/08 13.7

Total 41.1

(HCC’s 04/05 efficiencies of £7.0m may also be counted against

target of £41.1m which we are currently well on course to achieve)

Budget Estimate

£m

HIGHLIGHTS: HCC ANNUAL EFFICIENCY STATEMENT (AES) 2004/05 BACKWARD LOOK

• Non school Education Services• Review of children’s services• Highways contract• Procurement (SAP related)

1.3m

1.4m

1.5m

1.4m

TOTAL £7.0M

CASHABLE £6.3m

HIGHLIGHTS: HCC ANNUAL EFFICIENCY STATEMENT 2005/06 FORWARD LOOK

• Transfer of learning disability properties• Electronic monitoring homecare• Looked after Children Strategy• Highways contract• Waste recycling• Bus shelters

2m

0.8m

1.3m

0.5m

0.6m

0.5m

TOTAL £14.6M

CASHABLE £8.6m

Published AES’s Indicate Huge Variations Between

County Councils

• 2004/05 Backward Look: Ranges from £23.3m for Kent to £0.9m for Bucks [HCC £7.0m, 8th Highest]

• 2005/06 Forward Look: Ranges from £32.4m for Kent to £1.7m for Beds [HCC £14.6m, 10th Highest]