Financial Services

Email: accountancy@
thanet.gov.uk

Phone: 01843 577000

Delivering Value for Money

With an ever increasing demand for council services and the tight financial environment of recent years, efficiency and value for money are fundamental to the decision making processes of the Council, particularly where they relate to contracting and service provision.

Simplistically, efficiency can be defined as getting the same output for a reduced input, or achieving greater outputs for the same input. Efficiency is one of three strands that comprise Value for Money; the others being ‘economy’ which measures whether the total cost is reasonable and ‘effectiveness’ which considers whether the outputs are appropriate.

The last Efficiency Agenda, which arose from the recommendations of the Gershon Review of 2004, set specific efficiency targets for councils for 2004 – 2007. This has been replaced by a new Value for Money Programme that has been introduced as part of the CSR07. Through this it is hoped to guide councils to deliver annual cash releasing savings of £4.9bn by 2010/11 (equivalent to 3% per annum) by delivering ongoing business improvements, such as using collaborative initiatives and smarter procurement as well as better asset management, which is expected to deliver up to £300m cash releasing savings nationally. This is a particularly challenging goal, given that the equivalent three-year target for cashable savings in the last efficiency agenda was a much lower figure of £1.5bn.

The Council has a good history of having achieved efficiencies through smarter procurement, collaboration with others and through improvements to business processes and will continue to strive for continual improvement in these areas. Similarly, the emphasis on achieving value for money through better asset management has already been embraced and a new Asset Management Strategy has been drafted which advocates a very proactive approach in this area. The Council’s commitment to managing its resources efficiently and effectively will be reflected in its Budget and this MTFP through the realisation of savings which will be used to fund growth requirements arising from emerging service pressure, as well as enable Council Tax increases to be kept to a minimum.

How the Council intends to approach the delivery of efficiencies in the future is captured in the 2008 - 2011 Value for Money Strategy, which outlines the steps that will be taken over the medium term to maximise the gains realisable from efficiency measures, and to provide evidence of the Council’s performance in achieving Value for Money. Such an approach will strengthen the Council’s corporate processes for managing its resources and achieving value for money that will bring benefits to the cost and quality of the services it delivers. By following best practice in this way we should be better placed to achieve our aspiration of a level 3 score on future Use of Resources assessments.

The 2008 – 2011 Value for Money Strategy

The Council continues to be committed to delivering its services efficiently, effectively and economically. In order to make improvements in this area it will:

• Put in place management arrangements to take forward the Efficiency Programme and assign clear lines of ownership of all efficiency targets; ensuring that adequate resources are made available to enable delivery of the efficiency plans.
• Undertake a series of data analysis and benchmarking exercises to identify target priority areas for efficiency gains across the whole organisation.
• Foster a culture where employees and Members are open to the possibilities presented by new ways of working through innovation and the use of technology.
• Pursue options for improvements through joint working with other partners, particularly the East Kent Councils and Kent County Council to optimise the benefits available from the proposed Joint Services Committee.
• Assess the value for money obtained from all council assets taking into account an equivalent revenue rate of return.
• Take a medium term view of business improvements, considering using whole of life costing and invest to save funds to pump-prime projects for which future returns are expected.
• Implement appropriate arrangements to monitor the delivery of planned efficiencies.

2008/09 Draft Value for Money Programme