Gershon Efficiencies
In August 2003, Sir Peter Gershon was tasked with undertaking a review of public sector efficiency. It focused on the Government's key objective to “release resources to fund the front line services that meet the public's highest priorities by improving the efficiency of service delivery”. Sir Peter Gershon worked closely with Government Departments and other stakeholders and published the results in July 2004. The report identified auditable and transparent efficiency gains of over £20bn in 2007-08 across the public sector.
Over half the gains identified by Gershon are “cashable”. These can be identified as those where there is a direct financial saving or benefit, with money released that can be spent elsewhere or recycled within a service to deliver better results. The remainder of the gains are “non-cashable”; those where gains do not necessarily lead to lower costs, but which can lead to improved performance for the resources used.
The Spending Review 2004 translated the outcome of the report into an efficiency target of 2.5% per annum over the next three financial years across the public sector. Every local authority will be expected to meet this target. Across the whole of Local Government the requirement is for efficiency gains of at least £6.45bn per annum by 2007/08. The target set for Bracknell Forest for each year of the three-year plan is £1.78m, with a cashable target of almost £900,000.
The Forward Looking Annual Efficiency Statement (AES) was produced by the Council in March 2005 that identified recurring efficiency savings of over £3.38m, of which £1.15m were identified as cashable savings. As such the Council is well on target to achieve the necessary savings over the three-year period. However it will be necessary to identify a further £1.178m of additional total savings in 2006/07 in order to meet the requirements of the Efficiency regime.
The 2005/06 Forward Look is for authorities to set out their strategy and planned actions to achieve efficiency gains and an estimate of what will be achieved in the forthcoming financial year.
The 2004/05 Backward Look is for authorities to set out the amount of efficiency gains actually achieved in that financial year.
The Council's most recent Comprehensive Performance Assessment (CPA) acknowledged that its strong alignment of corporate, service and financial planning ensures it directs resources to priority areas. Furthermore whilst there is a pressure on the Council's revenue budget, its medium term financial planning provides a sound framework to make the reductions required to achieve a balanced budget by 2007/08.
As such the Council's key strategy for securing the efficiency gains set out in the 2005/06 Annual Efficiency Statement will be through its Medium Term Financial Planning process. Within this framework and as part of the 2005/06 Budget Strategy the authority identified a funding gap of approximately £4.5m. With the re-introduction of the capping regime and the requirement to keep the 2005/06 increase to a low single-digit figure the Executive approved a package of proposals to reduce its budget gap over the next three years. The strategy was to focus on key service pressures and priorities whilst also seeking economies and efficiencies elsewhere. The overall approach to the budget process has been to make savings of almost £4m enabling further improvement and investment to be made in priority services and bridging the overall gap by £1.5m. This approach is therefore closely aligned with the Gershon principles.
The Council has demonstrated that its Medium Term Financial Planning is successful in realigning resources to meet the Council's objectives and priorities and the CPA recognised the achievements made in 2004/05 and its capacity to identify future savings.
A robust performance management and financial control system is embedded across the Council and a strong performance culture exists. The Council's ambitions set out in its 15 Medium Term Objectives are translated into specific measurable actions and targets in service and team plans, with clear links to the financial and staffing resources needed. Performance reporting is thorough. Quarterly departmental operational reports (QOR) are presented to all councillors and are comprehensive, reporting on all aspects of the performance framework including key budgetary and staffing information.
The Council's robust financial management practices will be key to identifying and delivering the efficiencies required to meet both its Gershon obligations but more significantly achieving a balanced budget over the medium term aligned with the delivery of improved and effective local services.
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