Despite a frantic search for fresh public savings during the recession, chancellor Alistair Darling this week managed to find just £1bn of new ‘efficiencies’, prior to next year’s general election.
However, as Mr Darling announced the findings of his Operational Efficiency Programme on the eve of the Budget, it emerged that local public services would be the focus of a radical £9bn annual savings programme, if Labour emerges victorious from the 2010 election.
Mr Darling revealed scope for £15bn of ‘new’ savings across the public sector. However, £9bn of the savings are earmarked for the spending review period beyond 2011. Of the remaining £6bn that applies to the current spending review period, which runs until 2010/11, £5bn was identified by Mr Darling in November’s pre-Budget report.
This means, in spite of a dramatic economic downturn since the PBR – which was expected to be reflected in a sharp deterioration in the public finances announced in Wednesday’s Budget – Treasury officials managed to identify just an extra £1bn in savings for the current spending review period.
Experts warned this left the Government with little ‘wriggle room’ over public services spending prior to the expected general election in 2010.
However, the Local Government Association said the limited scope for immediate fresh savings reflected the fact that councils, and other public bodies, had already slashed costs and were operating on limited budgets during the recession.
A LGA spokesman told The MJ: ‘The fact that there are not massive additional savings to be found is a recognition that councils have already cut back a huge amount over the last few years.’
What is clear, however, is the Treasury expects local public services to deliver much of the £9bn in annual savings beyond 2011. The ‘local incentives and empowerment’ strand of the OEP, co-ordinated by Sir Michael Bichard, recommends empowering local staff to ‘collaborate and innovate’ to deliver future savings.
This includes adopting the ‘Total place’ programme which maps flows of public spending across localities, making links between council, NHS, education and criminal justice services, for example, to reduce unnecessary duplication.
Birmingham City Council this week revealed plans to pilot this programme (see page 3).
A Treasury spokesman said: ‘The demand for additional public savings beyond 2011 will be great. Each of the OEP’s five strands will be expected to deliver vital savings.’
The four remaining OEP strands that will contribute to the new target are: Back office and IT functions; collaborative procurement; asset management and sales; and property management.
Under these plans, town halls could end up sharing head office sites with other local partners, such as police and health authorities, as the search for savings intensifies.
While the CLG’s place-shaping agenda could benefit, there could also be more work for the Audit Commission.
The OEP calls for an acceleration of joint working in local areas by reforming the National Indicator Set. It also urges strengthening of local area agreements and local strategic partnerships by aligning performance frameworks; joining up inspection; and value for money targets around Place.
In a joint statement, the heads of the five OEP strands said: ‘We have each sBudget efficiencies
l From page one
OEP’s five strands will be expected to deliver vital savings.’
The four remaining OEP strands that will contribute to the new target are: Back office and IT functions; collaborative procurement; asset management and sales; and property management.
Under these plans, town halls could end up sharing head office sites with other local partners, such as police and health authorities, as the search for savings intensifies.
While the CLG’s place-shaping agenda could benefit, there could also be more work for the Audit Commission.
The OEP calls for an acceleration of joint working in local areas by reforming the National Indicator Set. It also urges strengthening of local area agreements and local strategic partnerships by aligning performance frameworks; joining up inspection; and value for money targets around Place.
In a joint statement, the heads of the five OEP strands said: ‘We have each set out an ambitious set of recommendations to increase the value for money the public sector achieves from its activities.’
However, as Mr Darling announced the findings of his Operational Efficiency Programme on the eve of the Budget, it emerged that local public services would be the focus of a radical £9bn annual savings programme, if Labour emerges victorious from the 2010 election.
Mr Darling revealed scope for £15bn of ‘new’ savings across the public sector. However, £9bn of the savings are earmarked for the spending review period beyond 2011. Of the remaining £6bn that applies to the current spending review period, which runs until 2010/11, £5bn was identified by Mr Darling in November’s pre-Budget report.
This means, in spite of a dramatic economic downturn since the PBR – which was expected to be reflected in a sharp deterioration in the public finances announced in Wednesday’s Budget – Treasury officials managed to identify just an extra £1bn in savings for the current spending review period.
Experts warned this left the Government with little ‘wriggle room’ over public services spending prior to the expected general election in 2010.
However, the Local Government Association said the limited scope for immediate fresh savings reflected the fact that councils, and other public bodies, had already slashed costs and were operating on limited budgets during the recession.
A LGA spokesman told The MJ: ‘The fact that there are not massive additional savings to be found is a recognition that councils have already cut back a huge amount over the last few years.’
What is clear, however, is the Treasury expects local public services to deliver much of the £9bn in annual savings beyond 2011. The ‘local incentives and empowerment’ strand of the OEP, co-ordinated by Sir Michael Bichard, recommends empowering local staff to ‘collaborate and innovate’ to deliver future savings.
This includes adopting the ‘Total place’ programme which maps flows of public spending across localities, making links between council, NHS, education and criminal justice services, for example, to reduce unnecessary duplication.
Birmingham City Council this week revealed plans to pilot this programme (see page 3).
A Treasury spokesman said: ‘The demand for additional public savings beyond 2011 will be great. Each of the OEP’s five strands will be expected to deliver vital savings.’
The four remaining OEP strands that will contribute to the new target are: Back office and IT functions; collaborative procurement; asset management and sales; and property management.
Under these plans, town halls could end up sharing head office sites with other local partners, such as police and health authorities, as the search for savings intensifies.
While the CLG’s place-shaping agenda could benefit, there could also be more work for the Audit Commission.
The OEP calls for an acceleration of joint working in local areas by reforming the National Indicator Set. It also urges strengthening of local area agreements and local strategic partnerships by aligning performance frameworks; joining up inspection; and value for money targets around Place.
In a joint statement, the heads of the five OEP strands said: ‘We have each sBudget efficiencies
l From page one
OEP’s five strands will be expected to deliver vital savings.’
The four remaining OEP strands that will contribute to the new target are: Back office and IT functions; collaborative procurement; asset management and sales; and property management.
Under these plans, town halls could end up sharing head office sites with other local partners, such as police and health authorities, as the search for savings intensifies.
While the CLG’s place-shaping agenda could benefit, there could also be more work for the Audit Commission.
The OEP calls for an acceleration of joint working in local areas by reforming the National Indicator Set. It also urges strengthening of local area agreements and local strategic partnerships by aligning performance frameworks; joining up inspection; and value for money targets around Place.
In a joint statement, the heads of the five OEP strands said: ‘We have each set out an ambitious set of recommendations to increase the value for money the public sector achieves from its activities.’
