John Denham: Drive for council efficiency saves millions for the taxpayer

More than £1.7bn of taxpayers' money was reported saved last year as a result of the Government's drive to make local government more efficient, announced Communities Secretary John Denham.

New figures published today show that local authorities reported £1.76bn of savings during 2008-09, by making services more efficient and improving value for money - equivalent to £98 for the average band D council tax payer. 

Together, the investment and support the Government has put in place over the last five years, including £100m to help councils share expertise on achieving savings in their regions, has helped to deliver a ground-breaking shift in local government efficiency. £4.6bn was saved over the period; it is being ploughed back into front line local services and into keeping council tax down.

John Denham today welcomed the substantial progress made by local government, but challenged councils to continue to re-think the way they deliver services in order to make taxpayers' money work as hard as possible in the current climate.

Mr Denham said:

"We have a radical vision for local government that will give it a stronger, more powerful role - not for its own sake but because it is the best way of achieving better public services that meet people's needs and offer better value for money.

"The Government's focus on local government efficiency has seen impressive rewards for the taxpayer without reducing the quality of public services.

"Families and business in the current climate rightly expect that their money is only being spent where it is making a difference. But making every pound work as hard as possible is not just about the cheapest deal - it involves making sure that money is being used smartly with an eye to the future.

"The purchasing power of local government is more than £42bn. By thinking innovatively, councils can deliver real social, environmental and economic benefits - helping to create jobs, boost skills, and support small businesses.

"When a council agrees a contract for new housing, it could try to include opportunities for new apprenticeships, or use its ability to shape markets to promote new technologies to tackle climate change. Investing in our future economy and skills now will ensure that we are positioned to benefit in the long term.

"We will continue to put the support and investment into local government to foster a new culture of innovation - saving the taxpayers' pound and fully harnessing the power of public spending."

The Government has taken a range of actions to improve the efficiency of local government - including new Regional Improvement and Efficiency Partnerships, which support council bosses to work together to identify opportunities for making efficiency savings through better practices like joint bidding for contracts.

The Government has put in place a £5.5bn efficiency savings target for councils to meet over the current spending review period, by 2011. From joining together to buy or share services, to using new technologies for cutting waste or being innovative when making purchasing decisions, councils are beginning to adopt new ways of working:

• In Nottinghamshire, eight councils have saved £150,000 each by working together on their contracts to buy refuse collection vehicles;
• Suffolk Coastal and Waveney councils have started to share senior managers, saving £50,000 last year;
• In Sunderland, councils are supporting older people to stay independent in their homes for longer, saving £1m annually;
• Councils in the South West have improved the way they look after children and young people in care and saved £1.6m each year as a result;
• West Midlands councils are sharing information on their best deals for buying goods and together found that they saved £7m in 2008-09 alone.

The Government is also currently piloting 'Total Place', an initiative which will identify radical changes which will allow better services to be delivered at lower cost, and demonstrate the benefits of public services working together to address customers' needs. In the pilot areas, elected councillors are looking at all the money that is being spent on a particular issue - from policing to healthcare - and considering whether it might be spent more effectively to get a better deal for residents.

Notes to editors

1. The 2007 Comprehensive Spending Review has set the public sector a new challenge: to achieve three per cent annual efficiencies, but this time all gains must be cash releasing. The 2009 Budget announced that an additional one per cent will be required in 2010-11. Together, for councils in England, this amounts to a target of £5.5bn cash-releasing efficiencies by the end of March 2011. This is done through one of the indicators in the National Indicator Set (NIS): National Indicator 179 (NI179). Full details of National Indicator 179 can be found at: www.communities.gov.uk/localgovernment/efficiencybetter/deliveringefficiency/valueformoneygains/.

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