Within a fortnight of being formed in May 2010 the new coalition government announced its intentions to make savings in the public sector of £6.25bn in 2010-11 through an increase in efficiency.  The aim is to tackle the UK's record deficit in order to restore confidence in the economy and support the recovery.

As part of this savings total, local government has been asked to achieve £1.166bn savings in 2010/11.  Local authorities are to decide where their priorities and opportunities for efficiencies lie across the totality of their responsibilities.

This approach builds on previous work which stressed the need for greater efficiency in local government.

A government sponsored report by Sir Ian Byatt published in 2001 reviewed local government procurement, with the aim of considering the state of procurement skills and practice in the light of the Best Value requirements in the Local Government Act 1999.  The report, Delivering Better Services for Citizens, emphasised the critical contribution that procurement can make to the quality of public services.

In response to the report, the National Procurement Strategy for Local Government in England was published in 2003. This became part of a broader efficiency agenda for public services. The Gershon Efficiency Review, published in 2004, signalled the need for all public sector organisations to improve procurement skills and ensure better value for money from public care.  Some useful resources are provided below which address efficiency in local government.

Sources of further help - external links

The Audit Commission is a public body that aims to ensure public services deliver value for money. Their website at offers downloadable reports and interactive toolkits, including:

• Healthy Competition considers the potential for councils to use competition and contestability to improve services and generate cost savings. The report gives practical examples and and explores the pre-conditions that concils must have in place to make effective use of these mechanisms (November 2007).
• Learning the Lessons from Financial Failure in the NHS (2006) focuses on a small minority of NHS organisations that experienced very significant, and in some cases rapid, financial failure.
• Managing finances in mental health (June 2006) explores areas of financial management in which mental health trusts need to improve.
• Choosing well: analysing the costs and benefits of choice in local public services (May 2006) looks at whether greater individual choice can help improve local public services and how it can be implemented fairly and cost-effectively.
• Under Pressure: tackling the financial challenge for councils of an ageing population (February 2010) considers how councils should respond to this demographic change.
• Financial Implications of an Ageing Population (2008) sets out the process by which the Audit Commission reviewed the potential future costs for local authorities.

The Care Services Efficiency Delivery programme was set up by the Department of Health to support the implementation of the recommendations of the Gershon Review. The programme works collaboratively with local councils, the NHS and service providers to develop and support initiatives to gain sustainable efficiency improvements. Its website provides information on the current workstreams, which include: Effective Monitoring and Modernisation of Homecare Services; Better Buying; Referral, Assessment and Care Management.

The Centre for Health Economics at the University of York aims to undertake high quality research that is capable of influencing health policy decisions. Research reports downloadable include:

• Stephen Martin, Nigel Rice and Peter Smith (CHE, 2007, RP24) 'The link between health care spending and health outcomes: evidence from English programme budgeting'.
• M Miraldo, Maria Goddard and Peter Smith (CHE, 2006, RP19) 'The incentive effects of payment by results'.
• Stephen Martin, Peter Smith and Sheila Leatherman, (CHE, 2006, RP18) 'Value for money in the English NHS: summary of the evidence'

The Commission for Social Care Inspection - CSCI (now the Care Quality Commission) published Cutting the cake fairly: CSCI Review of eligibility criteria for social care. October 2008.  This is a comprehensive review of the eligibility criteria set by Local Authorities under the Fair Access to Care Services (FACS) policy and guidance. It presents the findings of the review, suggests different approaches to individual resource allocation and rationing and makes a series of recommendations. 

The Department for Communities and Local Government (DCLG) website has a section on Efficiency and Better Services which includes help on capacity building, the Business Improvement Package and updates on the National Procurement Strategy for Local Government.  However this has now been archived.

The Department of Health has a series of publications under the Delivering Quality and Value strategy.

• Delivering quality and value: focus on benchmarking (September 2006) highlights existing good practice, tools, techniques and data for benchmarking.
• A summary of the Gershon efficiency programme 2004 - 2008: High level delivery plan (March 2006) can be downloaded as well as the Efficiency Map, which presents initiatives to modernise service delivery, pay/workforce strategies and IT systems within the NHS in a coherent way, highlighting expected benefits to front-line NHS of delivering the wider modernisation agenda.
• Use of Resources in Adult Social Care: a guide for local authorities (October 2009) is intended to stimulate discussion on how to commission and shape services by making best use of resources.

The Department of Health Use of Resources in Adult Social Care: A Guide for Local Authorities has published a guide for senior managers to self-assess their use of resources and review their commissioning and purchasing arrangements to be in line with personalisation requirements.  There are useful case studies and good practice examples to draw from. October 2009.

Frontier Economics does research and consultancy work in Healthcare services and offers bulletins, papers and presentations on their website, including:

• A healthy choice: Managing demand in the new NHS (January 2007).
• Mind the gap: sustaining improvements in the NHS beyond 2008 (October 2006).

The Health Foundation is a charitable organisation that conducts research and seeks to influence healthcare decision-makers to promote improvements in the quality of patient care and inclaudes the publication Value for money in the English NHS: Summary of the evidence (December 2006).

The Improvement and Development Agency (IDeA) has a section on Efficiency, which has background to the efficiency review and links to government guidance.

The King's Fund commissioned Sir Derek Wanless to undertake a major review of social care. The report Securing Good Care for Older People: taking a long term view (March 2006) highlights the economic argument for refocusing investment on preventive approaches to care, reducing the future financial burden of longevity and population change. 

The NHS Evidence: Health Information Resource website (formerly the National Electronic Library for Health) provides links to quality-assured information on the cost and effectiveness of various healthcare interventions.

The Nuffield Trust offers downloadable publications, including Commissioning in the English NHS: the case for integration (March 2007) and Increasing NHS Efficiency (February 2007) from the Health Reform and System Change seminar series.

The PSSRU website offers some downloadable publications, including the research summary Paying for Long-Term Care for Older People in the UK: Modelling the Costs and Distributional Effects of a Range of Options (October 2006).

The Regional Centres of Excellence website has a section on efficiency, and links to many publications including Transforming council services through efficiency (March 2006) which describes 15 good practice case examples from around the country. Click here to go to Yorkshire and the Humber Centre of Excellence website.

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