Councils may be facing the squeeze between tight settlements from above, and higher expectations on the ground, but John Healey argues efficiency savings are not a rod to beat councils further – they are the solution to finding more resources to invest in local services Why does any debate about efficiency so often become a figure-toting, finger-pointing wrangle? Council taxpayers expect their authority to provide both excellent services and good value for money. They are right to do so. And many councils are now meeting these expectations. As the new CPA results show, local government is demonstrating improvements it can be rightly proud of – 83% of authorities rewarded for their efforts with three or four stars, and four in five councils improving well or strongly, last year. These achievements shatter the slur on local government put around by some who say people are getting less not more from their council. On the contrary, councils continue to deliver more and deliver better, backed by more investments from central government. Earlier this month, I confirmed the 11th consecutive year of inflation-busting grant increases for local government, with every council getting an increase in core funding each year for the next three. A total government grant increase for all services, of £2.7bn next year alone. And, for the first time, I have put in place a three-year settlement, giving councils the certainty they need to plan and manage their future budgets. I am also removing all strings on funding, with an extra £5.6bn moving into area-based grants over the next three years, just as local government had asked. By 2011, councils will be receiving 45% more from central government in real terms than they did in 1997. However, in line with expectations for other parts of the public sector, I am also looking to councils to make 3% efficiency savings each year for the next three. This could save as much as £1.5bn next year alone, money directly available for councils to reduce pressure on council tax bills or to invest in local services. That's why efficiency is an important opportunity for councils, and more essentially, for the local residents they serve. It is also a continuous challenge, not a one-off saving. For these reasons I have so little truck with those who try to raise scare stories about cuts in services or try to argue that local government has made efficiency gains in the past, so more can't possibly be done in future. We can and will do more to support councils in their efficiency challenge. From the centre, I've announced more than £380m to invest in council improvement and efficiency over the next three years, including £185m for local government-led regional partnerships. That work will spread the best examples across the country. We know there are some excellent examples of innovation, improvement and efficiency across the country. And such initiatives are introduced by councils of all types and all political control. For example: l nine councils in the North West came together in October 2005 to buy 450,000 wheelie bins by e-auction, saving 20% on pre-auction prices. More local councils have since joined in l Havering LBC produced a toolkit with the London Centre of Excellence, on how to recruit temporary and interim staff more efficiently, saving £3.2m l Worcestershire CC worked with nine district councils and the Department for Work and Pensions to launch a mobile ‘one-stop shop' offering advice to older people on benefits and services, saving £4.5m since its launch in 2005. Councils can also improve the management of their land and buildings, the second-costliest resource to local government after staff. Fifty pilots are now under way for the transfer of assets to local communities, which can offer the dual benefit of empowering local groups and saving money for the council. The best examples around the country show innovation and efficiency do not, and should not, mean cuts in local services. They show the challenge is to deliver services in different ways, more effectively and efficiently. Councils must look for these improvements and efficiency savings not because ministers say so, but because it frees up cash for councils and is therefore directly in the interests of local services and local people. New council tax bills will soon be hitting doormats, with taxpayers questioning whether the key local services they use are worth the money they pay for them. They will expect their council to avoid setting excessive increases, and I am clear there is no excuse for any council to do so. With increasing government grant, more financial freedoms and a three-year settlement, and with increasing support and scope for efficiency, it is now for councils to plan ahead to continue the improvements local government has shown over the last few years. John Healey is local government minister
