1. Portfolio/Number/Name:FPSRLG/C1 Assumed Local Government efficiency savings and Procurement savings |
2. Programme/Activity: Scotland's local authorities have a key role in delivering frontline services to the public in the areas of services for children and young people, services for the elderly and vulnerable, affordable housing, community care, environmental services, transport provision, leisure facilities, public order and policing arrangements, maintaining a growing, viable and enterprising local economy, all in a well-maintained and planned urban or rural setting. Those services are funded in three ways: central government, council tax and non-domestic business rates. Local government continually strives to ensure value for money is secured in all business processes and systems which underpin the multitude of business objectives and public services that they are required to discharge. Consequently efficiency targets are not new to local government and the three year Efficient Government Programme is but part of a continuum to which all councils are committed. Inherently challenging in such a programme is gathering the evidence to demonstrate improvements, or indeed deteriorations, in efficiency and productivity. The solution to this in the local government sector will be the Framework for Monitoring Efficient Government and this is discussed further below. The overall Efficient Government programme sits comfortably with COSLA's commitment to demonstrating the efficiency of Scottish Local Government. |
3. Efficiency | 3.1 Current target; £m | | 2005-06 | 2006-07 | 2007-08 |
Cash | 81.1 | 166.6 | 327.0 |
Time | - | - | - |
3.2 Efficiencies delivered; £m | | 2005-06 | 2006-07 | 2007-08 |
Cash | 122.0 | - | - |
Time | - | - | - |
3.3 Explanation for increase in target since March 2006 issue | The current target consists of the original assumed efficiency savings (£54.1m, £112.6m and £168.3m over the three years), an increase of £79m in 2007/08 as a result of the financial settlement agreed in December 2006, and that element of the public sector procurement savings attributable to Local Government (£27m, £54m, and £80m over the three years). Local government procurement savings were included in the 2005/06 outturn of £122m. |
4. Accountable Officer for delivery | Dr. Andrew Goudie |
5. Project Manager | Brenda Campbell |
6. EGDD Portfolio Manager | Fiona Page |
7. Description of efficiency and actions to be taken | 7.1 What is the efficiency improvement? How will efficiencies be made? In respect of the 'assumed Local Government efficiency savings' the cash savings have been deducted at source from the funding support the Scottish Executive provides to local authorities for net revenue expenditure on core services. Overall it equates to a 2% efficiency gain by 2007/08 relative to the 2004/05 baseline. It will be the responsibility of each individual local authority as to how and if the efficiencies are actually achieved and to manage its share of the efficiencies in the most appropriate way depending on local circumstances and priorities. The increase to the 2007/08 target has not been deducted at source from funding support. In respect of the public sector procurement efficiencies, no deduction has been made to the funding support from the Scottish Executive to councils. Procurement efficiency gains made by councils are to be retained by councils for reinvestment in local service priorities. The efficiency improvement will be better value for money from purchases made by the local government sector. In most cases this will be achieved by a reduction in price compared with existing contracts or external benchmarks, taking account of changes in prevailing prices and specification. There are already examples of best practice in procurement in local government, eg the ABC Buying Consortium, but there is potential for further reform and collaboration, and for further gains to be made through the adoption of enabling technologies such as eProcurement Scotl@nd. |
7.2 What are the main actions that are needed to secure the delivery of this efficiency improvement? Given that the assumed cash savings have been deducted at source from the funding support the Scottish Executive provides to local authorities for net revenue expenditure on core services, local authorities will have to make business processes more efficient in order to deliver the same level of service for less input and without adding a compensatory increase to council tax levels. In respect of the procurement efficiency gains, the main actions are: - implementation of the recommendations of the McClelland report, including the establishment of national and sectoral contracts for common requirements,
- adoption by all councils of the minimum standards set out in the McClelland Report,
- engagement with the national 'Category A' centre of expertise and establishment of a local government 'Category B' centre of expertise, and
- further accelerated roll-out of eProcurement Scotl@nd.
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8. Associated costs | 8.1 Are there any development or redundancy costs associated with the delivery of this efficiency? It is the responsibility of individual local authorities to determine how to achieve the expected efficiencies. It is not possible to tell at this time whether or not individual council's efficiencies will have any impact on staff numbers or incur development costs. The monitoring and reporting requirements outlined below will capture associated costs for 2006 onwards. |
9. Measurement | 9.1 What are the inputs that will be measured? Data collection will be co-ordinated by the Improvement Service for Scottish Local Government. Work is ongoing, 'a framework for monitoring efficient government', to develop a common set of measures of productivity and efficiency that will inform a common single efficiency statement for councils. |
9.2 What are the outputs that will be measured? Data collection will be co-ordinated by the Improvement Service for Scottish Local Government. Work is ongoing to develop a common set of measures of productivity and efficiency that will inform a common single efficiency statement for councils. This statement will be supported by robust, factual information. 36 draft measures are currently the subject of a consultation process to ensure that they are fit for purpose. Measures will be ready for application at the beginning of financial year 2007/08. COSLA are confident that a significant element of the work will be suitable for retrospective application for 2006/07 as well. COSLA members' collective performance will be assessed against national efficiency targets, which will enable comparison with other parts of the public sector. In respect of procurement savings, the Office of Government Commerce ( OGC) Value for Money ( VFM) measures will be applied, where appropriate. |
9.3 What is the baseline for inputs and outputs? The baseline will be the 2004-05 financial and activity outturn figures. |
10. Quality cross-check | 10.1 What quality indicators are being used to ensure that quality of service is maintained or improved? To ensure that the quality of service is maintained or improved, Statutory Performance Indicators and service reviews will continue to be monitored. In addition the new Framework for monitoring Efficient Government will take account of qualitative issues. |
11. Monitoring | 11.1 What are the arrangements for monitoring the delivery of efficiency savings? Data collection is co-ordinated by the Improvement Service for Scottish Local Government. Whilst the first report, for 2005/06, was conducted by external consultants and based on six detailed case studies and survey data from 15 other Local Authorities, hereon the intention is for data to be collated in a consistent fashion at each of the councils, under the new Framework for monitoring Efficient Government. Measures will be ready for application at the beginning of financial year 2007/08. COSLA are confident that a significant element of the work will be suitable for retrospective application for 2006/07 as well. |
12. Reporting | 12.1 What are the arrangements for reporting the delivery of efficiencies? The reporting of the delivery of efficiency savings will be co-ordinated by COSLA. |
13. Dependencies | 13.1 Explain if your efficiencies are dependant on legislation or other structural changes being achieved. Savings will be dependent on the actions of the individual Local Authorities. Key stakeholders COSLA and SOLACE have confirmed Local Government's commitment to Efficient Government as evidenced by the efficiency savings already delivered for 2005/06. |
14. Use of savings | 14.1 How are the efficiencies released from improvement activity being used to improve front-line services? The larger element of the overall efficiency saving was assumed as part of the allocation made by the Scottish Executive to Local Authorities; this freed up resources for Ministers to allocate to their priorities. Efficiency gains arising through improvements in procurement are for retention by councils for reinvestment in local service priorities. |