Councils set to beat savings target

24 August 2005
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25 August 2005 | Rebecca Ellinor

Local authority buyers secured £56.7 million of efficiency savings in the latest financial year.

According to figures released this month by the Office of the Deputy Prime Minister, councils saved £757.6 million, of which £56.7 million - just under 8 per cent - was a direct result of procurement.

The government said it anticipated that together with the amount local authorities expect to save this year (see News, 9 June), they will exceed the 2005/06 target of £1 billion and make total savings of £1.9 billion.

But the Local Government Association (LGA) warned the government against "exploiting" councils' achievements.

Councillor Sir Jeremy Beecham, vice-chairman of the LGA and chair of its efficiency task group, said local authorities had already included the savings in their 2005/06 budgets and still faced a £1.5 billion deficit in their budgets for 2006/07.

Peter Howarth, chief executive of the Society of Procurement Officers in local government, said although £56.7 million was a small percentage of the total savings, procurement made a significant contribution to efficiency improvements in other areas.

He said some of the savings should be invested in training purchasing and non-purchasing staff. "Without this investment, it is unlikely that gains will be sustained," he warned.

Howarth added: "Public-sector effort alone will not achieve the targets. It is incumbent on the private and voluntary sectors to realise their contribution."

SMaug2005

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