The Efficiency Agenda and 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 CSR value for money target across central and local government was originally £30 billion of savings by 2010/11, subsequently increased to £35 billion. Of this, £5.5 billion cash-releasing efficiencies are required by 2010/11 for local authorities. This is expected to be delivered by ongoing business improvements, such as using collaborative initiatives and smarter procurement as well as better asset management.  The Pre-Budget Report sets out a number of efficiency savings identified by the Government’s Public Value Programme and the Smarter Government report published on 7 December 2009. Smarter Government is expected to deliver £11bn savings a year by 2012/13, of which £550m specifically relates to local government. Further to this, the Public Value Programme has identified efficiency savings of £5bn across the public sector by 2012/13. A number of these efficiencies have been identified to come from local government, including more efficient waste collection and disposal; reducing duplication and inefficiency between different tiers of government; reducing the burdens of inspection, assessment and reporting requirements across government; improvements to the administration of concessionary fares; reducing regeneration spending; and clamping down on fraudulent access to social housing tenancies.

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.  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 2010 - 2015 Value for Money (Efficiency) 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. In line with this strategy, the Council has a Value for Money Review Programme, progress against which is reported to Members.

The 2010 – 2015 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 deliver continuous Value for Money (Efficiency) improvements.
• Assign clear lines of ownership of all efficiency targets; and ensure that adequate resources are made available to enable delivery of the action plans that are designed to achieve efficiency savings.
• 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.
• Take a strategic approach to asset management to ensure that value for money is obtained from all council assets, taking into account an equivalent revenue rate of return where appropriate.
• Take a medium term view of business improvements, to include consideration of the whole-life costing where appropriate and the use of invest to save funds to pump-prime projects for which future returns are expected.
• Operate appropriate arrangements to monitor the delivery of planned efficiencies. 

Next: The Local context

Back: Local Government Act 2007

• Introduction
• Executive Summary
• Local Government Finance Environment
• Local Government Act 2007
• Value for Money
• The Local Context
• Developing Financial Plans
• General Fund Revenue Account
• Housing Revenue Account
• Capital Programme
• Treasury Management

Financial Services

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thanet.gov.uk

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