Appendix 2

1. 2005/06 Budget comparisons

1.1 The annual efficiency statement is on a different basis to the efficiency savings and redeployments built into the 2005/06 budget.

1.2 Total continuing savings identified in the budget were:

Table 1: 2005/06 total savings

	£m
Cash savings
· efficiency and other savings	8.4
· additional savings	3.0
· total cash savings	11.4
Increments etc absorbed	4.5
Total Savings	15.9

1.3 Of the total £8.4m savings identified, £1.3m definitely count, and over £4m do not. The balance will be examined again in the context of the Government's developing guidance to see what scope emerges from service budget reviews. £1.1m of the additional savings of £3m count but the remainder does not. Increments will count towards the non-cashable target.

2. Savings identified

2.1 Only £2.4m of the 2005/06 budget savings meet the annual efficiency statement requirements as shown in Table 2.

Table 2: 2005/06 budget savings which definitely meet the indicative efficiency savings targets

	£'000	£'000
Cash efficiency and other savings:
Environment:
Term maintenance contract	300
ICT savings	86	386
Social Care:
Reduced delayed discharges		200
Cross cutting:
SAP benefit realisation
- County Treasurer's	250
- IT	200
- Human Resources	50
Procurement (agency contract)	250	750
		1,336
Additional savings:
Procurement savings on all non-pay budgets (except schools)	1,000
Cost of member meetings	100	1,100
Total cash savings identified		2,436

2.2 Environment savings of £386,000 and Social Care savings of £200,000 are expected to be achieved within budget plans. Similarly there are firm benefit realisation plans to achieve the corporate/cross-cutting savings of £750,000 on SAP.

2.3 Firm plans/actions are required to achieve the projected £100,000 savings on the cost of members meetings; presumably by reduced administrative staffing.

2.4 A target of £1m for procurement savings was set in the budget, but has not yet been allocated in budget terms across services. These exclude school budgets.

2.5 The Director of Property, Business and Regulatory Services is making a progress report on corporate procurement savings to the Buildings, Land and Procurement Panel on 5 April 2005. This assumes the target is increased to £1.15m to provide for extra procurement staff to take the programme forward.

2.6 Savings anticipated from current activity in that report are £1.1m, broadly in line, but including £250,000 on the agency contract already built into the budget as part of the SAP benefits realisation. This reduces the amount identified to £850,000, against the £1.15m target. Other savings may need to be split between schools (which will not count unless a rebate is effected or a premium charged) and other budgets. These include:

Table 3: Identified procurement savings

2.7 Potential savings on procurement are also identified in that report from:

Table 4: Potential procurement savings

2.8 Total procurement savings could be around £1.4m, but when discounted for schools will require concerted action to get to the £1.15m target.

2.9 Cabinet in April will wish to ensure that firm plans are set to achieve the specific savings incorporated in the 2005/06 budget, against which performance can be monitored during 2005/06, and to identify which savings can be added to the action plans to support the annual efficiency statement (AES).

3. Other savings, related to 2005/06 budget reductions

3.1 Other potential savings will continue to be reviewed an the detailed actions adjusted during the year. This section of the report concentrates on potential cashable savings against the annual efficiency statement indicative targets derived from the remaining potential scope within the savings identified within the 2005/06 budget.

3.2 Non-school Education Services

· annual efficiency plan indicative target - £400,000 cashable

· 2005/06 budget requires £420,000 of "efficiencies" to be identified; other savings identified in budget process of £700,000 do not count for the AES.

3.3 Environmental Services and Local Transport

· plan indicative target - £1.2m cashable

· achieved £386,000

· 2005/06 budget savings identified £2m, most of which do not count (transfers to capital, income)

· but potential from developers' contributions

· and £300,000 from bus subsidies by reducing unit costs (the guidance suggests for local transport: "there is real potential through better procurement, sharing of best practices and better targeted delivery to make services more efficient and effective. Priority areas for improvements include looking at tendering of subsidised bus services and the forward delivery of capital schemes.")

· substantial amount still required to be identified (£0.5m)

3.4 Culture and Sport

· plan indicative target - £400,000 cashable

· budget identified £730,000 of savings required, of which £320,000 do not count

· cash efficiency savings of £410,000 are still required to be identified in the budget

3.5 Social Care

· plan indicative target - £4.1m cashable, covering adult social care (£2.8m), children's services (£0.9m) and supporting people (£0.4m)

· 2005/06 budget included £3.1m of required savings of which £200,000 from reduced delayed discharges is expected to be achieved and is included in the AES.

· 2005/06 budget identified the following savings which might potentially be cashable if they are actually achieved and are not double counting agency staff or other procurement savings:

Table 5: Potential efficiency savings in social care

	£'000
administrative staff	160
agency staff	380
peripatetic team to reduce agency costs	400
more cost effective placements	546
reduction in residential placements	124
streamlining assessment	150
reduction of unit cost through re-provision of uneconomic services	130
reduced debt write-off	50
reduced management costs	300
keen price negotiations	260
	2,500

· improvements in productive time and procurement are essential on social care as the largest non-school budget.

3.6 Cross-cutting (corporate services, procurement, productive time, transactions)

· indicative target £0.6m cashable

· £750,000 achieved (SAP benefit realisation) and £1.25m planned (procurement £1.15m and members meetings £0.1m)

· 2005/06 budget identified £1.2m for Policy and Resources. Efficiency savings of £380,000 remain to be identified in the 2005/06 budget for Policy and Resources, mainly across Property, Business and Regulatory Services, and Chief Executives

3.7 Capital

· indicative capital targets (cashable) are £1.8m (Environmental Services/Local Transport) and £0.8m across the remaining buildings programme.

· no `savings' as yet identified.

4. The longer-term, bigger picture

4.1 The AES for 2005/06 will be general and just about meet the requirement. But a three-year plan is required to demonstrate 7.5% efficiency gains on a recurring basis covering the budget years 2005/06 to 2007/08. Further work will be done to discuss/scope targets over the following areas:

Cross-cutting

4.2 Corporate services

· contact centre

· rationalisation of central services - reception, cleaning, post room etc.

4.3 Procurement of commodity goods and services

· further savings on off-contract buying

· e-Government projects

4.4 Construction procurement

· case studies

· efficiency improvements from re-thinking construction, framework contracts etc.

· energy and facilities management savings in new buildings

· redevelopment of Ashburton Court, office accommodation rationalisation

4.5 Productive time

· use of new technologies

· mobile/flexible working

· improved staff management absence

· business process reviews

· pay and benefits

- benefits rationalisation programme

- reduction in travel rates to Inland Revenue rates

4.6 Transactional processing

· e-Government targets

· any further shifts from manual to electronic processing

Service Sectors

4.7 Cultural and leisure services

· public library procurement and efficiency

· cultural pathfinder programme

4.8 Education and children's services

· productive time, procurement

· rationalisation of management structures, use of accommodation and ICT with introduction of Children Act

· multi-disciplinary teams, better workforce deployment and capacity

· common assessment and information sharing processes

· partnership working with health and others

4.9 Adult care services

· commissioning/procurement of adult care services

· Enhance

· rationalisation/reviews with Green Paper

· use of new technology

· `re-provisioning' residential adult care accommodation which is not cost effective

4.10 Supporting People

· improvements in value for money,

· use of new technology

· procurement capability

4.11 Local transport

· procurement - revenue and capital

· tendering of subsidised bus services, deletion of routes which are not cost effective

· LTP - `planning' guidelines focus on core priorities, best value for money

· `realistic low cost alternative' to preferred major schemes for LTP support

· procurement arrangements to `encourage more efficient and less costly procurement of light rail schemes' - if SHRT goes ahead

· collaborative roads procurement - Highways Agency

4.12 Environmental services

· procurement and market shaping (WRAP)

· improving planning process for waste facilities

· single waste collection contract across districts

· sale of surplus materials recovery facility (MRF) capacity and savings on landfill tax

· refinancing of waste contract

· local public service agreement (LPSA) and other targets to improve recycling, resources management, disposal of cars, electrical goods etc.

4.13 It is also important that all staff secure efficiencies in the way that they work to complement the strategic approach and a staff suggestion scheme is being considered for this purpose.