10 October 2008
Councils must take a sustainable approach to efficiency over the next three years if they are to achieve the £4.9bn savings expected, the Audit Commission has said.
In a report published on October 8, the commission focused on savings that could be made from changes to councils' back-office operations, the areas highlighted by the Gershon review into public sector efficiency in 2004.
To achieve further savings from areas such as IT, human resources and procurement, the commission said town halls must make long-term changes, rather than 'one-off windfall gains'.
The report, Back to front, warned that 'changes to the wider economy and to goods, services and utility markets' meant some efficiencies would be harder to achieve.
Audit Commission chair Michael O'Higgins told Public Finance that it was more important now to think strategically. 'What the last spending round figures have shown is that councils can meet and exceed the targets. And they achieved cash releases, rather than just saving five minutes of somebody's time here or there.
'But to meet the even tougher challenge ahead, councils need to think more about transformational changes.'
Local government minister John Healey said there should be 'no need for service cuts' in meeting the efficiency targets. 'In this difficult financial climate, better value for money is more important than ever,' he said. 'Last year, I was able to announce the first three-year settlement, giving councils the flexibility and stability they need to manage their budgets over the longer term.
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