Magazine article Public Finance

Save Money, Save Face

Magazine article Public Finance

Save Money, Save Face

Article excerpt

The news that local authorities are on course to meet government targets for efficiency savings was announced with quiet satisfaction by the Office of the Deputy Prime Minister last month. This is understandable since there has been a relatively smooth transition from announcement to delivery, considering the trepidation in local government when it was announced that savings of £6.45bn had to be achieved by 2007/08.

This trepidation has been replaced with a renewed confidence in local authorities' ability to meet central government efficiency requirements. More impressively, local authorities expect to exceed the required £1bn in efficiency gains for 2005/06.

This is not to say the efficiency agenda is complete or that the remaining tasks are without challenge. Councils no longer own all the delivery mechanisms in their locality. Now they work with the private, voluntary and community sectors in pursuit of best value.

They are not alone. Governments across the world have long been seeking a more effective use of resources, moving them from backoffice functions to service delivery. The difference with the Gershon requirements is that, although they are not as stringent as some wanted, they have produced quantifiable results in a short time.

Examples abound of effective approaches to efficiency questions across the UK. Kingston-upon-Hull City Council, for example, has been successful in reinvesting money saved in streamlining back-office functions into frontline services. The authority has implemented a councilwide information communications technology system to amalgamate the procurement, finance and human resources functions into a single business process and transfer the saved resources to the front line.

'Gershon targets won't be met through marginal change', says Paul Jackson, Hull's efficiency manager. 'What will meet them is a fundamental rethinking of the relationships between a local authority and its customers. Gershon gives us the opportunity to reshape our organisational structures to respond more effectively to local stakeholders,' he says.

Historically, productivity has been driven up within organisations by the effective application of technology whether the horse-drawn plough, the spinning jenny or the personal computer. Local authorities are no exception and the use of technology, such as in Hull, has been a powerful catalyst for increased efficiency and greater value for money.

However, efficiency savings do not just mean more bang for your buck; their effect spills over into the areas of democratic renewal and community leadership. …

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