Department for Culture Media and Sport
Efficiency programme
We aim to ensure that the resources available to local government are used in the optimum way to deliver better public services according to local priorities.
The immense opportunity that is open to improve local services should not be clouded by misconceptions about the motives of this agenda.
Definition of an efficiency gain
Sir Peter Gershon's report and targets for local government
Our role in efficiency
| Efficiency IS about... |
Efficiency is NOT about... |
| Delivering better services for the public within available resources. |
Cuts in services or council budgets. From time to time, it may be prudent for an organisation to make economies, but such actions are not efficiency gains and cannot be used to meet the efficiency target set. |
| Recycling the resources released through efficiency gains to further improve services or to hold down Council Tax. |
Central government forcing local authorities to do more while reducing their funding. The efficiency gains that councils make are not clawed back. |
| Heads of service implementing delivery methods that better meet the needs of their customers. |
Finance directors working in isolation to complete efficiency statements. It is not just about numbers and budgets. |
| Local government deciding its own plans and priorities for making efficiency gains. |
Central government prescription. Targets have not been set for individual local services. |
| Central government, Regional Centres of Excellence and others working to help local government discover and implement solutions that are right for them. |
Local government being told by others how, where, and when to make efficiency gains. It is not about imposing "one-size-fits-all" policies. |
| Making real efforts to find better ways to deliver services and to obtain value for money. |
Fiddling the books to create gains. The targets are a long-term challenge to make real ongoing improvements. |
| Doing the best for local service users and taxpayers. |
Doing the bare minimum to hit the target. Every additional £1 released is money that can be reinvested to improve service delivery. |
Definition of an efficiency gain
Efficiency is about raising productivity and enhancing value for money. Efficiency gains are achieved through reforms that involve:
- Reducing inputs (money, people, assets etc.) for the same output
- Reducing prices (procurement, labour costs etc.) for the same output
- Getting greater output or improved quality (extra service, productivity etc.) for the same inputs
- Getting proportionately more output or improved quality in return for an increase in resources
The first two of these are "cashable" gains; they result in a direct financial saving or benefit, with money released that can be spent elsewhere or recycled within a service to deliver better results.
The second two are termed "non-cashable" gains as they do not release money, but lead to improved performance for the resources used.
In contrast, a cut can be characterised as a significant reduction in the availability or quality of a particular service that the public receive and value. While local government organisations may have to face hard choices and sometimes implement cuts, the savings that accrue from these are not efficiency gains.
Actions that result in reducing outputs but with a proportionately greater reduction in inputs theoretically involve an element of efficiency, but such actions will not be counted towards local government efficiency targets since we do not want this agenda to diminish service provision.
top
Sir Peter Gershon's report and targets for Local Government
In August 2003, the Prime Minister and Chancellor of the Exchequer asked Sir Peter Gershon to undertake a review of public sector efficiency.
This focused on the Government's key objective to release resources to fund the front-line services that meet the public's highest priorities by improving the efficiency of service delivery. Sir Peter Gershon and his team worked closely with departments and other stakeholders, and published his report in July 2004.
The report identified the opportunity to make £21.5 billion of sustainable efficiency gains across the public sector in 2007-08.
Of this total, at least £6.45 billion would be achieved by local government in England; equivalent to 7.5% of its 2004-05 baseline expenditure. This figure has been adopted as the official target for local government and it will be met by activities undertaken by:
- Councils (comprising nearly half the £6.45 billion target)
- Schools (comprising nearly 40% of the target)
- Police and f Fire authorities (comprising some 15% of the target)
top
Our role in efficiency
Local Authorities spend some £3.2 billionn on culture and leisure each year. We remain committed to the development of a new role in our relationship with local authorities, influencing and supporting the achievement of efficiency gains.
Excellent progress has been made by authorities, with £28 million gains achieved for 2004-05 and an estimated £48 million to be achieved for 2005-06. We expect the final year-end figure for 2005-06 in September 2006.
Over the last year, we have taken a number of steps to enhance our understanding of local authority performance in the delivery of cultural services and to support local authority efforts to improve performance and deliver the required efficiency gains.
Comprehensive performance assessment
Working with local authority colleagues, public bodies and the Audit Commission, a new cultural services assessment has been added to the Comprehensive Performance Assessment (CPA) arrangements. We are developing additional performance indicators for CPA 2006–08.
top
Cultural services improvement unit
We have commissioned a new Cultural Services Improvement Unit within the IDeA to help local authorities to improve the overall performance of cultural services in their area, and to support the implementation of performance management initiatives.
The contact for the unit is: martyn.allison@idea.gov.uk
top
Public libraries stock procurement model development project
Conducted by PricewaterhouseCoopers LLP and the Museums, Libraries and Archives Council, the goal is to achieve better library services through better stock procurement.
It will consider how improvements in technology, procurement and stock management practice that have already been adopted by some libraries and in other sectors, can be harnessed more widely for the benefit of all libraries. Key stakeholders, including local authorities, library services and users, will be involved throughout. The steering group is chaired by Councillor Chris White, representing the Local Government Association.
The project will support better library services in three ways:
- Better availability and more efficient management of stock, with flexibility to meet local needs
- Freeing up library staff time and resource from back-office work to provide additional services
- Creating the potential for reinvestment of gains so libraries can provide the best possible service to their communities through better opening hours, stock and other services.
The project will first identify the national scope for efficiency in libraries stock procurement in order to produce a range of potential models for consideration. All feasible options will be considered, from minor improvements to the current system to more significant change. The intention is to achieve the greatest possible level of efficiency consistent with retaining the best of local accountability. The project will not impose a solution, but aims to create proposals that will generate maximum buy-in.
The senior responsible officer within the MLA is Andrew Stevens, Senior Policy Adviser (Libraries), Museums, Libraries and Archives Council: andrew.stevens@mla.gov.uk
top
Audit Commission report on public sports and recreation services
The aim of this June 2006 study into public sports and recreation services, carried out by the Audit Commission was to assess the effectiveness of a sample of local authorities’ different approaches to management of leisure services, including the impact on costs and participation.
We are looking at the recommendations of the report, and discussing the way forward with Sport England, the Regional Centres of Excellence and where appropriate other government departments.
top
Analysis of performance data
To enhance our understanding of performance in the delivery of cultural services by local authorities, we have, within the Regional and Local Government Unit, started work on collating and analysing performance data. In future we will use this database to identify good practice and potential areas for improvement. During 2006 we will, through the IDeA Cultural Services Improvement Unit, work with authorities to develop robust and consistent performance indicators and performance management systems.
The contact for this work is natalie.golding@culture.gsi.gov.uk.
top
Good practice case studies – Cultural Connections website
To assist with the dissemination of good practice, we have, with the help of local authority colleagues, written up a number of good-practice case studies, taken from the 2004-05 Annual Efficiency Statements.
These case studies give examples of how efficiencies have been made and the outcome of the action taken.
We will be producing more case studies in the next few months and will post them on the same site and on the Regional Centres of Excellence website. To submit case studies for the website or for more general dissemination, send them to daniel.thorne@culture.gsi.gov.uk.
Back to top
