SCOTTISH EXECUTIVE EFFICIENCY TECHNICAL NOTES: MARCH 2005: page 1

SCOTTISH EXECUTIVE EFFICIENCY TECHNICAL NOTES: MARCH 2005

1. INTRODUCTION

1.1 The Scottish Executive Spending Proposals 2005-2008 ¹ were published in September 2004. Integral to those proposals is the commitment to manage public sector resources more effectively, which will contribute to a growing economy, and to modernise and improve Scotland's public services. In these spending proposals, target 1 for the Finance and Public Services portfolio is to make government in Scotland more efficient and release 500 million of recurring cash-releasing efficiency savings for investment in frontline services by March 2008. A technical note for this Spending Review target was published in December 2004 ² and this sets out the criteria for a cash-releasing efficiency.

1.2 In November 2004, a plan ³ to attack waste, bureaucracy and duplication was published. The Efficient Government Plan builds upon much work which has already been done over the past five years and sets increased financial targets for the three years to 2007-08. These include securing 745 million of annually recurring cash-releasing savings by 2007-08 and the ambition of achieving up to 900 million.

	2005-06 Already identified	2006-07 Already identified	2007-08 Already identified	For the year 2007-08 Additional savings yet to be specified
Cash releasing savings	405m	582m	745m	155m
Time releasing savings	n/a	n/a	300m	300m

Ensuring we deliver

1.3 The Efficient Government Plan articulated how these efficiency savings would be achieved, how they would be monitored and how they would be reported. We have agreed with Audit Scotland that they will provide more formal comments on the published Technical Notes by end April and that these comments should be in the public domain. .Developments from November 2004 to March 2005 include:

Establishing a reference group with representation from local government, the NHS and other public bodies to act as a channel for information and to strengthen dialogue between different sectors;
Establishing an Efficient Government Delivery Team within the Scottish Executive;
Holding a series of workshops across Scotland with senior managers in the public sector on the topic of collaborative Efficient Government projects;
Piloting the technical note for identified cash-releasing efficiency projects;
Drafting of technical notes for the 48 cash-releasing efficiency projects that have been identified; and
Working with Audit Scotland to introduce independent scrutiny into the process.

Cash Releasing Technical Notes

1.4 In line with Annex B of the Efficient Government Plan, this document provides the technical notes for the cash-releasing efficiency projects that were identified in the plan and which form the basis of the 405 million of recurring cash-releasing efficiency savings in 2005-06, 582 million in 2006-07 and 745 million in 2007-08.

1.5 These technical notes are intended to document:

a description of the project;
the nature of the efficiencies to be realised and the cash to be released;
whether the financial impact has been included in the 2004 Spending Review;
the names of those accountable for the saving and those who manage the project;
the actions to be undertaken and the dependencies that have to be factored in;
the impact on staffing levels, both increases and decreases; and
clarification on how the efficiency will be measured, monitored and reported.

1.6 It should be noted that the technical note is a working document. Many efficiency projects are at different stages of development and some projects have more detailed technical notes than others. The technical notes will be updated periodically to reflect the latest technical information on the projects.

Efficiency savings

1.7 The figures for savings and for changes in staffing shown in the technical note are inclusive of prior year savings, i.e. the saving shown for any year is the change since 2004-05. The overall baseline for the savings (Year 0) has been set as the 2004-05 budget. In terms of context, the savings of 405m/582m/745m in 2005-06, 2006-07 and 2007-08 respectively are to be achieved against a background of increasing investment in the public sector. The Total Managed Expenditure for the same period (including estimated inflation) is 25,480m/27,117m/28,923m. Monitoring for the purposes of the Plan will be limited to individual efficiency projects. Total spend (for each and every public sector body), for which there is likely to be other factors contributing to variances, will be subject to normal ongoing monitoring.

Next Stages

1.8 In the next quarter, the Scottish Executive will:

review delivery planning to monitor and report on progress; and
produce technical notes for the identified time-releasing savings (300m) and the additional cash-releasing and time-releasing savings (i.e. the 155m and 300m respectively).

Template for the cash releasing technical note with description of what each section contains.

1. Portfolio/Number/Name:Name of project and identifier
2. Programme/Activity: Please include a short description The purpose of this section is to provide a description of the activity that will lead to the delivery of the efficiency savings.
3. Planned Savings				2005-06		2006-07		2007-08
	Cash			This section contains the figures that formed the basis of the original figures included in the Efficient Government Plan. In some instances, a project may deliver time-releasing savings as well as cash-releasing savings.
	Time Releasing
4. Accountable Officer for delivery				The Departmental Accountable Officer.
5. Project Manager				The Branch Head or above with policy responsibility for delivery of efficiency.
6. EGDG account manager				The member of the Efficient Government Delivery Group overseeing the delivery of the saving.
7. Quality Impact		Describe any impact on the quality of service delivery. Be specific and explain if the expectation is positive, negative or neutral. This section should describe whether or not the efficiency project will have any impact on the quality of the service provided.
8. Dependencies		Explain if your savings are dependant on legislation or other structural changes being achieved. In some cases, the delivery of an efficiency saving may be outwith direct control of the project manager. This section should illustrate where the delivery of a saving is dependant on certain factors.
9. Description of efficiency and actions to be taken		9.1 How will the saving be made? Be specific about number/size of contracts, staff, posts dates etc. This section provides more details on how the actual efficiency savings will be made as opposed to the activity that will deliver it.
		9.2 What action is critically needed to secure delivery of this saving? Be specific, and name the key action managers if they are outwith your immediate management chain (e.g. in an NDPB.) This section outlines some of the key actions that are necessary in order for the saving to be delivered. It is not a comprehensive list of milestones or a critical path.
10. Impact on Staffing to achieve the efficiency gain		If there are to be any changes in staff numbers (at activity level) to achieve the efficiency gain, please indicate how many full time equivalents and how far you expect savings to be achieved by natural wastage (show additions as + and reductions as -).
			2005- 06		2006- 07		2007- 08
		+	This section provides details on the impact of an efficiency project on the number of posts for that particular activity.
		-
		Net
		Explanation
11. Benefits		In general, the benefits of the Scottish Executive Efficiency Plan are the enhanced outputs from the resources Ministers have been able to allocate in SR04. But if there is a direct connection between this efficiency saving and the enhancement of a particular service please describe it here. This section explains that most of the efficiency savings have been allocated as part of the Spending Review. In most instances, it is not possible to provide a direct link between an efficiency savings and a subsequent increase in resources elsewhere in the Spending Review proposals. However, where it is possible to indicate where the efficiency saving was allocated, this information should be provided here.
12. Gross/Net Cash Savings		12.1 Please set out the gross recurring saving and any offsetting recurring expenditure. This section sets out the latest estimate of the gross recurring saving. It also asks for offsetting recurring expenditure so that it is possible to work out the net recurring saving. In some instances, one-off costs or capital expenditure may be provided although this should not be deducted from the savings. Similarly one-off receipts or savings are excluded from the savings.
		12.2 Against what budget does this expenditure and saving fall? The budget against which the expenditure and saving falls should be included here. This will vary in level of detail depending on the information available.
		12.3 Has this saving been built into your budget? This questions asks whether the saving has been built in to the budget. In this instance, the "budget" is the allocation they have been given from central government as part of the budget process. In some instances, the saving has been deducted at source and allocated elsewhere as part of the Spending Review/Budget process - see section 11. In other instances the saving has not been deducted at source, and the saving is available to be directed to services as that organisation sees fit.
		12.4 If so, what is the maximum allowable expenditure against the budget data, in each year, for that saving to be delivered? Where a saving has been built in to the budget, this section asks for the budget to be provided so it is possible to assess whether or not they have managed to live within their budget and, therefore, delivered the efficiency saving.
		12.5 If not, how do you propose to invest the additional cash back into public services? Where an efficiency saving has not been built in to the budget, this section asks for an explanation on how that saving will be invested back into public services.
		12.6 What plans do you have to exceed the required saving? Explain by how much in each year. This section asks if any plans have been made to exceed the planned saving provided in section 3. In most cases, any variance between section three and the latest revised estimate is provided in this section.
13. Time - release savings		13.1 Please explain any time-releasing savings indicated at question 3. Where a time-releasing saving has also been identified in section 3, along with the cash-releasing saving, this section asks for the details to be provided.
		13.2 Please describe the method you plan to use to calculate the cash equivalent of those time release savings. This section asks for the methodology used to calculate the cash equivalent of the time saved.
14. Measurement and Monitoring		14.1 How are you proposing to measure the expected efficiency benefits (e.g. in terms of costs, level of output or quality of service)? This section asks how the efficiency benefits will be measured.
		14.2 What monitoring & reporting procedures will be put in place to measure the efficiency savings (How often will progress towards the target be monitored? Who will have lead responsibility for reporting progress and what procedures will be in place?) This section asks how the measured efficiency savings in section 14.1 will be monitored and who this will be reported to.
		14.3 Monitoring Data: Sources, validation and risks What data will be used to measure progress? Is all the required information quantifiable and readily available? If not what action will be taken to rectify this? What measures will be in place to validate the accuracy of the data? Who will take responsibility for this? Are there any issues or risks relating to how you plan to use the data? (e.g. accuracy, difficulties in collection) This section asks about the data being used to measure progress and whether or not it is quantifiable, readily available and accurate.

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