North West Centre of Excellence

News Update

Week Ending 12th November  2004 
 

Funding

1.      Local Government Minister, Phil Hope, confirmed the release of at least £20 million for the next two years to Centres of Excellence to boost their capacity in facilitating efficiency gains across local government as well as supporting the implementation of the National Procurement Strategy.

2.      This good news is in line with our expectations that the annual budget for the Centre would increase to £1m and that bids for additional funding for ‘exemplar’ projects would be considered.

Efficiency Technical Note

3.      The technical note for local government has now been published and is available at -
http://www.odpm.gov.uk/stellent/groups/odpm_localgov/documents/page/odpm_locgov_032675.pdf.  It identifies the service areas from which efficiencies are sought and it shows where else they will be reported.  Details of the latter are available in the Technical Notes for each Government Department on the Treasury website – http://www.hm-treasury.gov.uk/Documents/Public_Spending_and_Services/publicservice_performance/pss_perf_table.cfm.

4.      In order to achieve the £6.45 billion per annum efficiencies Councils will need to produce efficiencies of 2½ % per annum of the 2004/5 net budget of which at least half must be cashable up to 2007/8.

5.      Cashable efficiencies are where reduced input and/or reduced prices produce the same output.  If with the same input and or prices more or better service is produced these efficiencies are non-cashable.  Quality must not suffer and there will be quality measurements e.g. customer satisfaction, achievement of standards, collection rates, turn-round/waiting times and CPA judgements.  Cost transfers, increases in charges and re-labelling will not be allowed.

6.      There are some options for consultation i.e. the timing of Annual Efficiency Statements and how they are prepared and evaluated.

7.      There will be two parts to the annual efficiency statements

Forward Looking – produced in April or June (starting 2005 for 2005/6) which will be a 2/3 pager outlining the strategy and key actions.

Backward Looking – produced in June (2006 for 2005/6) and audited by the Audit Commission as part of the CPA with results in December.

8.      Two approaches to the Efficiency Statement are put forward:

Self Assessment

Councils will say what they intend to do and will report on that.  There will be some mandatory quality indicators.  There may be some recognition of efficiencies made in 2004/5.

The Audit Commission would assess Councils in the light of benchmarked financial profiles.

Framework Assessment

Councils will report efficiencies based on a core-group of approximately 20 indicators relating to service sectors and Gershon workstreams.  Any efficiencies outside the core group would be based on self-assessment as above.

9.      A decision on which assessment will be used will be made in December.  No mention of Gershon Credits!

Information for Leaders and Chief Executives

10.  The ODPM has also issued a 62 page booklet which can be found at
http://www.odpm.gov.uk/stellent/groups/odpm_localgov/documents/page/odpm_locgov_032674.pdf.  This is useful for those people who have not been paying attention as it brings everything together.

11.  The Annexes are particularly useful in that they define the areas from which the Government expects us to make savings.

Corporate Services - simplifying, standardising and sharing functions such as Finance, HR, IT, Legal, Procurement, FM and Marketing and Communications.

Procurement - Improved contract management and aggregation of demand for energy, travel, vehicles, IT, temporary staff, professional services, office supplies and telecoms.

Construction - Procurement of construction and premises using best practice.

Productive Time of professional and front-line staff using improved methods, work patterns, reduced absence and new technology linking with the implementation of the new pay and workforce strategy.

Transactional Services focused initially on Council Tax, Housing Benefits and Business Rates, building on existing projects and using collaboration and outsourcing.

Service Categories –the expectations for each service area e.g. schools and adult care are detailed and some are more focused than others.

No sector targets have been set recognising that individual authorities will make more progress in certain sectors than others.  The Regional Centres are given a prime role to identify and disseminate best practice, promote partnerships, act as a focus for procurement consortia, strengthen training in procurement skills and monitor progress towards efficient ways of working across the region.

Paul Dowthwaite
12/11/04