Healey calls for greater efficiency from councils

Published	19 February 2009

In the current economy local authorities need to deliver vital services even more efficiently - and the Roots Review has shown millions more can be saved through improved procurement, the Local Government Minister said today.

Bill Roots carried out an urgent review of local government procurement to identify more ways to help councils reach their three per cent - over £1.5billion - annual savings targets. The last assessment took place back in 2001.

The report makes a series of recommendations to help councils generate more efficient procurement processes. In particular it identifies strengthened Regional Improvement and Efficiency Partnerships (RIEPs) as a key way to improve practical procurement advice and the 'best buy' information available.

Prompt action is vital to meet the needs of the economic downturn. The Government welcomes the stronger role for RIEPs and expects them and councils to act rapidly on the recommendations. A funded implementation plan will be announced in the Budget as part of the Operational Efficiency Programme.

In addition the Government will work closely with the Local Government Association, Improvement and Development Agency and RIEPs to implement a more creative, collaborative and co-ordinated public sector procurement.

John Healey said:

"In the current economic climate councils need to make every council tax pound stretch that much further, and one way efficiency savings can be found is through smarter procurement practices.

"In many cases councils are already delivering significant savings but, with everyone feeling the pinch, they must examine every function to see how they can work even more efficiently to keep council tax down.

"As with the rest of the public sector, councils now need to make at least three per cent (£1.5bn) annual savings - worth £90 off the average Band D council tax bill - without cutting vital services.

"The recommendations in Bill Roots's report are straightforward suggestions to help councils and using RIEPs to compare the best deals could make a real difference."

The Comprehensive Spending Review (CSR07) tasked English councils with collectively making £4.9bn of efficiency savings, with the expectation that nearly 60per cent (£2.8bn) would come from smarter procurement. Councils have considerable spending power - in 2007, local government spent £42billion on external contracts, 40 per cent of total spending.

Government has already ensured councils are getting the support they need through the £185million funding over three years for the nine Regional Improvement and Efficiency Partnerships (RIEPs), and has announced plans for a £115million Efficiency and Transformation Fund for councils.

The RIEPs are already helping councils reach their local targets and priorities, assist them in working collaboratively to make savings, and counsel each other how to overcome obstacles and challenges.

In addition, the formation of nine new unitary authorities will drive a root and branch improvement in the delivery of local services and help deliver savings of over £100m each year.

Notes to editors

1. Examples of help provided by RIEPs to councils include:

A procurement 'hub' run by the West Midlands RIEP has already saved £4.5m (expected to rise to £12m in two years' time) with 270 "best deals" on offer and growing.
In the East Midlands, 200 officers have been trained up for free in business process improvement techniques thanks to a partnership between the RIEP and Learning and Skills Council to provide staff training. They have already put the techniques into practice by identifying around £800,000 potential savings as well as future improvements to customer services.

2. Single, unitary councils responsible for all services across their area will mean closer joint working, more shared information and more efficient services. For example, Durham County Council is planning for around £10million efficiency savings through its restructuring, including £1.5million from a reduction in corporate spending alone - with more to follow.

3. Full details of the Roots Review: Review of arrangements for efficiencies from smarter procurement in local government are available on this website.

4. CSR07 arrangements for local government efficiency are set out in a Value for Money Delivery Plan, negotiated with HM Treasury, and supported by £0.5bn funding over the three years. There are separate arrangements for the fire and rescue service (including a National Procurement Strategy for that sector) and the housing sector.

5. Under the National Improvement and Efficiency Strategy (NIES), agreed with LGA, the Department has set out indicative funding of £185m for the nine RIEPs and, through Revenue Support Grant top-slice, the Department contributes to the funding of programmes delivered by specified bodies in the LGA Group (including 4ps and IDeA). The Department has also announced a £115m capital Efficiency and Transformation Fund.