New task force to drive value for money for councils

A new local government Task Force will drive value for money efficiencies and protect frontline services, Communities Secretary John Denham announced today.

Radical reforms set out this month in Putting the Frontline First and the Pre Budget Report will reshape the relationship between Whitehall and local councils. Local leaders will have greater freedom to lead and set local priorities, while central government cuts targets and regulations.

At the same time, to meet tight spending controls, councils must prioritise frontline services through leaner back offices with fewer bureaucratic jobs, greater shared services and the promotion of innovative procurement and asset use. These savings are part of Government's £8bn Operational Efficiency measures.

The Prime Minister recently promised £3bn of additional efficiency savings including a 20 per cent cut in the cost of the senior civil service. The Task Force, chaired by local government leaders, will urgently look at whether similar savings are achievable for local government.

John Denham has asked Steve Bullock, Mayor of Lewisham and Richard Leese, leader of Manchester City Council to lead the Task Force with representatives from local government and unions.

Mr Denham has challenged it to quickly develop proposals to identify how council workforces can be made more efficient without affecting the high quality of front-line services. They will look at the following areas:

• Examine the potential of local authority management restructuring including the benefits of shared Chief Executives
• How sharing services with other authorities and with other public sector bodies can deliver efficiency savings. If 60 per cent of districts shared financial services and cut costs by 20 per cent, annual savings could exceed £20m
• How to reduce the impact of senior pay through transparency and affordable pay benchmarks
• How to free up and motivate staff to drive forward more innovative frontline services
• How to reduce overlap and duplication of work in between district and county councils in two-tier areas
• How to improve capacity and innovate to meet citizens' needs, including benchmarking back offices and non-essential bureaucratic positions

There are already ten shared Chief Executives, which save both councils about £85,000 per year. If 40 per cent of all district councils did this three year savings could be over £10m. For shared senior management teams annual savings could be around £450,000. If 40 per cent of councils did this three year savings could be £54m.

In Knowsley the council and PCT have a joint Executive Director. This has helped save £1m in learning disabilities and increased co-location of services. Adur and Worthing councils will save over £2.4m from shared management.

North East Derbyshire has improved frontline customer services through shared management, IT and maintenance with Chesterfield. Overall it expects to save £1.5million. Greenwich expects to save of £495,000 on maintenance and £442,000 on running costs from its joint customer service centre.

Watford expects a £1.2m annual savings from combining IT, HR, Finance and Benefits with Three Rivers.

John Denham said:

"Woe betide the local authority which cuts frontline services when it hasn't made every possible efficiency savings. Local taxpayers should be vigilant if they are asked to accept reduced services because their Council won't take tough decisions to introduce shared services, sharing senior staff with other local authorities, PCTs or other bidders, or through making the best use of public buildings.

"The new Task Force I am creating today will identify where local authorities can reduce their pay bill as a result of the radical changes Government has announced to reduce Whitehall's red tape on councils, which will free them up to put their local residents first and maintain high quality services where they are most needed."

Steve Bullock, Mayor of Lewisham added:

"Local government has delivered significant efficiency savings while driving up performance but now faces a fresh challenge to deliver even more for our communities while making cost savings of a significantly different order.

"This will only be possible if we take a clear, unsentimental and above all speedy look at what we do, how we do it and how we might do it differently in the future."

The Task Force will report in February so recommendations can be adopted by councils in their next budgets and feed in to the wider public sector senior pay review report due ahead of Budget 2010.

It will also use the existing expertise of Regional Improvement and Efficiency Partnerships (RIEPs). The East of England RIEP are helping 20 different district councils find collective savings of £2.7m a year through seven shared service projects including libraries services, Revenues and Benefits services, Senior Management Team mergers and Choice Based Lettings.

Mr Denham has confirmed that local government would be included in the Senior Salaries Pay Review Body's review into senior pay across the public sector. Councils are also expected to deliver the agreed public sector pay cap of 1 per cent for 2011/12 and 2012/13 in line with the Pre-Budget Report announcement.

New legislation introduced last week will require councils to publish named individuals earning more than £150,000 in £5,000 bands bringing them in line with the Government's new public sector pay transparency commitments.

In addition the Audit Commission's probe, called for by John Denham, into so called 'Boomerang Bosses' - Chief Executives who walk off with big severance pay-outs after falling out with the council's political leaders - to see if practices are robust enough and offer value for money. It will report in the New Year.

Notes to Editors

1. The ten current shared Chief Executives are: Adur and Worthing; Hambleton and Richmondshire; Suffolk and Waveney; South Oxfordshire and Vale of White Horse; Bromsgrove and Redditch; West Devon and South Hams; West Oxfordshire and Cotswolds; Staffordshire Moorlands and High Peak; Havant and East Hants; Essex and Brentwood.

South Oxford and Vale of the White Horse now share a chief executive and have cut directors from five to three and service heads from fourteen to eight saving £750,000.

The Improvement and Development Agency for Local Government (IDeA) report into sharing chief executives and senior management can be found at: http://www.idea.gov.uk/idk/aio/14197204

2. Further examples of where the Government supported Regional Improvement and Efficiency Partnerships (RIEPs) are helping address organisational and service inefficiencies to find cost savings are:

• Collaborative procurement by 10 authorities for insurance premiums will save over £1m per annum from 2010/11.
• The West Midlands RIEP has recently led a pilot study on asset management, which has identified potential savings of £540m - from both capital receipts and reduced revenue costs - across the region over a 10 year period.
• A partnership between Tamworth and Lichfield will deliver around £1m a year through a combination of new waste collection methods, increased productivity and reduced overheads.
• East Midlands Property Alliance - £4.8m savings made, through collaboration and framework agreements for the procurement of design and build large/medium schemes, minor works and property maintenance, non cashable savings have also been delivered through client and contractor training and development.

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