Whitehall protects its own as councils lead public sector reform

7 December 2011

Government departments have been given shelter from spending cuts, and as a result are falling well behind councils in reforming services and finding savings for the taxpayer.

Council funding has been cut by 28 per cent compared to only eight per cent for Whitehall departments. New research shows how councils are making the savings that allow Whitehall to protect itself from genuine reform and improvements to services, such as:

Of the 240,000 jobs lost in the public sector in the past year, just 33,000 have come from the civil service. In contrast, over four times as many local government workers have lost their jobs, with 145,000 staff being made redundant in the same period.

Despite the so-called 'bonfire of the quangos' in Whitehall, many still remain with overlapping remits and duplicated bureaucracy. For example, the government pays for two quangos, based in separate Government departments, to fund further education colleges – resulting in £100 million being spent on unnecessary administration costs;

Whitehall departments are missing a quarter of all their reform targets. The Cabinet Office, in charge of the Government's efficiency agenda, missed 38 deadlines in the past year – the highest from across Whitehall. 53 per cent of business plan targets were also missed by the Department for Health.

Meanwhile, a new nationwide study from the Local Government Association reveals how councils are protecting frontline services by delivering savings of £156.5 million from merging back offices. These savings come on top of the billions of pounds worth of savings councils made in the previous Spending Review, including £1.7 billion in 2008-09 and a massive £4.8 million every day in 2009-10.

Cllr Sir Merrick Cockell, Chairman of the LGA said:

“Councils are the most trusted and efficient part of the public sector, outperforming the rest of Whitehall, despite the challenging financial situation.

“Faced with significant budget cuts of 28 per cent – compared to just eight per cent across Whitehall, councils have delivered real value for money to taxpayers.

“Some central government departments are receiving real terms increases in their budgets, whilst funding for vital services in local government, such as adult social care, has been disproportionately cut.

“Whitehall now needs to turn the saving spotlight on itself, rather than offloading any further funding cuts onto councils, which could impact upon frontline services.”

Across the country, 219 councils are sharing services such as recycling and waste, I.T. and children's services, to save taxpayers money, including:

Association of Greater Manchester Authorities (AGMA) sharing procurement of goods and services, which has saved £18.5 million so far. This approach targeted existing AGMA contracts to find savings. In addition to this, AGMA have also managed to maximise opportunities for local suppliers at the same time.

Tamworth and Litchfield sharing the management and communication of waste services, which is saving £1 million per year. This new approach also led to much greater customer satisfaction through clearer information being passed on. This also brought benefits to the environment, through lower emissions and improved recycling rates.

Hammersmith & Fulham, Westminster and Kensington & Chelsea are using an exciting tri-borough approach. This involves merging a variety of services such as adult social care, corporate functions and children's services to avoid making reductions to frontline services. This includes working with 1,500 staff and pooled budgets of around £300 million. Savings of £33 million per year by 2015 are anticipated.

Notes:

- In order for councils to pool resources, 143 examples have now been plotted on an interactive map available online at http://www.local.gov.uk/better-for-less-po-map. 63 of the savings have come from sharing corporate functions, such as I.T. and payroll. Whilst traditionally these savings had come from back office functions, shared services are now moving swiftly into other council services.

- The latest Office of National Statistics figures show that local government has had to cut 145,000 jobs, compared to 33,000 job losses in the civil service.

- The two quangos with overlapping funding remits for further education are the Education Funding Agency and the Young People's Learning Agency.

- A report published in November by the Institute for Government indicates the Government is not meeting all of its efficiency targets. The Cabinet Office, who is responsible for the Government's efficiency agenda, missed 38 deadlines in the past year. The Department of Health also missed over half (53%) of its targets from their business plan for the Parliament. For more information on this report, please visit: http://www.instituteforgovernment.org.uk/publications/48/

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