Lessons from the Gershon era: findings from CIPFA Networks’ 2008 survey of annual efficiency statements

This paper discusses councils’ approaches to delivering efficiency, incorporating both quantitative and qualitative analysis and building on similar surveys we conducted in 2005, 2006 and 2007. It is based on backward-looking efficiency statements from 58 councils that participated in a survey conducted by the Performance Improvement Network together with its sister service, the Finance Advisory Network.

It shows that the participating authorities significantly underestimated the gains they expected to deliver in 2007/08. Indeed, if the rest of local government underestimated by a similar amount, councils will have actually delivered around £4.4bn in savings over the three-year period – 11% of their original budgets, and well above the original target of £3bn. However, councils will find it increasingly difficult to meet the more stretching targets that were set following the 2007 Comprehensive Spending Review, particularly given the economic downturn.

Our study found that councils achieved their savings primarily through some form of organisational change or by agreeing cheaper prices for goods and services. The biggest efficiencies were delivered in adult social services, corporate services and procurement.