Labour Party shadow ministers today announced proposals to drive further £500m back office and shared service efficiencies from local government.

Savings identified in the ‘zero-based’ review (ZBR) of Government spending would deliver more than £500m budget cuts from the Communities and Local Government budget.

This would include more than half a billion pounds annually from 2016/17 through shared services and back office collaboration and the abolition of the New Homes Bonus – with cash reallocated within the sector.

A further £100m would be shaved from the £320m Transformation Challenge Award in cash pot 2014/16 and the merger of some of the 46 Fire and Rescue authorities in England to deliver savings of up to £84m annually.

Multi-year budgets – announced by chancellor George Osborne in last week’s Autumn Statement - would allow authorities to meet the up-front costs of public service reforms to maximise savings that would protect the front line, the plans state.

Councils would also enjoy greater freedom over budgets and ring-fences and greater powers over wider areas of public services, the plans which build in the work of Labour’s local government innovation taskforce and Lord Adonis’ growth review suggest.

Chris Leslie, shadow chief secretary to the Treasury, said: ‘Labour’s Zero-Based Review has identified more than £500 million a year of savings in the Communities and Local Government budget which will help to better protect frontline services as we get the deficit down.”

Shadow secretary of state for communities and local government, Hilary Benn said: ‘Services locally should be built around people and places rather than institutional and administrative boundaries, which lead to inefficiencies and higher costs.

‘By passing powers and resources down from Whitehall to local communities we can make savings and ensure that the money we have is better spent.’