Government says councils 'ahead on Gershon savings'

18 June 2006
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19 June 2006 | Paul Snell

Local government could achieve Gershon efficiency targets a year early - by including savings made before the review was even published.

The Gershon review of efficiency in the public sector, Releasing Resources for the Frontline, was published in July 2004 and organisations were given until spring 2008 to hit the target of £21.5 billion savings.

Local authorities must achieve £3 billion of the total and had from April 2005 to the end of March 2008 to do so. However, the government has said councils may also include savings achieved in the 2004-05 financial year.

In 2004-05 local government achieved £758.9 million savings. In 2005-06 councils hoped to save £1.1 billion - the government will publish results in September. This year it has told government it expects to produce £1.3 billion savings by the end of March 2007. If achieved, it means local government will exceed its £3 billion target a year ahead of schedule.

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In a statement, Phil Woolas, a minister in the Department for Communities and Local Government (DCLG) - set up to replace parts of the Office of the Deputy Prime Minister - said: "Local authorities are well on their way to achieving the £3 billion of efficiency gains by 2007-08. The figures are significant and show that, if delivered, the Gershon target will be met a year early."

Procurement is expected to account for £137.8 million of the savings this financial year, of which £121.9 million will be cashable. Savings in procurement are expected to be the third highest, behind adult social services, which hopes to save £213.5 million and corporate services, which is expected to save £197.2 million. In the same period last year, procurement was expected to save a total of £111.5 million.

Progress made by councils toward these figures will be revealed in a mid-year update published in December.

SMjun2006

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