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 last Efficiency Agenda, arising 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been replaced by a new Value for Money Programme introduced as
part of the CSR07.
It is hoped this will help 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, smarter procurement and 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 enabling 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.