Archived decisions
Appendix 3
Annual Efficiency Statement 2005/06 - Efficiency gains forward look
Strategy for securing efficiency gains
Efficiency improvements are a mainstream component of the County Council's established planning processes. Each department produces regular Service Plans which feed into workforce and financial planning. The framework for these plans incorporates the need to produce efficiency measures and to identify areas for efficiency review. This fits in with the review mechanisms which the Council already has in place and which typically pick up efficiency issues: best value reviews (mainly in cross-cutting areas) which complement the service planning processes; business plans for trading parts of the organisation; and consultancy reviews. Executive Members and Chief Officers as appropriate are given targets which they are expected to meet through such "normal processes".
The Council has given a strong emphasis to value for money which is built into budget, procurement and routine decision making by Cabinet and Executive Members. Business plans are required for all new service developments demonstrating how performance will be improved and value for money achieved.
In addition there are several overall themes and approaches which inform service plans and may also provide scope to generate additional cross-cutting efficiency gains:
· "good housekeeping" rules built into the budget process, principally the requirements that the net cost of increments will be absorbed and that where inflation in specific areas exceeds the corporate inflation allocation, this too will be absorbed so far as possible.
· exploiting the potential offered by the continuing phased implementation of an Enterprise Resource Management System (SAP). This leads to significant efficiency improvement opportunities in finance (by reducing double handling of data, automating processes and re-engineering procedures in-line with the new system), human resources (achieving economies of scale by electronically based centralisation of processes, especially recruitment), procurement (by better capture of all purchasing power to feed into corporate contracts) and IT (by ending the use of the mainframe and adopting a "thin client" technology). The costs and benefits of introducing a contact centre are also being considered.
· exploiting opportunities for corporate working and partnership, in particular with Health (through existing work focusing on adults and older persons and increasingly in children's services with progress from the Children Act), Police and Probation (eg crime and disorder partnerships and youth offending teams), District Councils (joint provision of services, with particular opportunities from extending the current waste disposal partnership arrangements to cover waste collection) and with all public bodies across the County through local strategic partnerships and the second generation of local public service agreements.
· movement to a new pay framework which will seek to provide stronger links between contribution and pay in the expectation that by better targeting rewards, it will be possible to achieve efficiencies.
· a business-driven approach to capital spending, emphasising the opportunities for "invest to save".
· `bottom up' processes such as suggestion schemes and cross-cutting working groups to complement the `top-down' style of analysis stemming from the Gershon Report.
The results of this activity will be assessed through the budget monitoring process, and verified by internal audit. Eventual efficiencies achieved will be reported on following the year end and incorporated into the Council's performance plan.
|
Expected annual efficiency gains (£) |
...of which related to capital spend (£) |
...of which related to other spend (£) |
...of which cashable (£) |
Adult social services |
5,126,000 |
2,563,000 | ||
Strategy: In line with overall strategy | ||||
Key actions: The biggest savings potential comes from ensuring that placements are targeted as tightly as possible, reducing the number of placements but increasing the impact of placements made (eg to reduce bed-blocking and consequent fines) and reducing the costs of placements. Key factors for this are adequate social work staffing (it is hoped to improve this through market supplements and a revised recruitment strategy), tight negotiation of prices and maximising the availability of lower cost care options. The Social Care budget also contains efficiency measures based around replacing more expensive agency staff, streamlining administration and unit costs through re-provision of uneconomic services. | ||||
Children's services |
1,654,000 |
827,000 | ||
Strategy: In line with overall strategy | ||||
Key actions: Significant savings potential comes from ensuring that placements are targeted as tightly as possible, reducing the number of placements but increasing the impact of placements made and reducing the costs of placements. Key factors for this are adequate social work staffing (it is hoped to improve this through market supplements and a revised recruitment strategy), tight negotiation of prices and maximising the availability of lower cost care options. The biggest potential is to shift children looked after from residential or independent sector placements to in-house foster care. To improve the chances of this a package of foster care recruitment, retention and support measures is being piloted in the first half of the year. The Social Care budget also contains efficiency measures based around replacing more expensive agency staff, streamlining administration and reducing unit costs through re-provision of uneconomic services. | ||||
Culture and sport |
926,000 |
463,000 | ||
Strategy: In line with overall strategy | ||||
Key actions: A programme of efficiency reviews is being developed, with initial concentration on procurement (especially of books) in libraries, reducing staff travel, pooling support functions, better use of operational transport and generation of increased trading income. | ||||
Environmental services |
1,122,000 |
561,000 | ||
Strategy: In line with overall strategy | ||||
Key actions: A thoroughgoing administrative review has taken place from which savings are now expected. Volume discounts are being pursued for road maintenance work. It is hoped to achieve more recycling output from the existing waste management investment. More efficient means of dealing with waste management capital assets are being examined, and savings are anticipated from the abandoned vehicles budget. Reviews are under way on the split between area and headquarters functions, on speed management and on discretionary services with a view to delivering efficiencies. New ways of resurfacing roads are being examined which it is hoped will extend the life achieved without increasing cost. A comprehensive review of community (Cango) and quality bus partnerships is being undertaken in order to identify the scope for reducing bus subsidies. The Environment Department manages major capital spend: given that this is ring-fenced, efficiency efforts will be directed towards achieving more than the targets prescribed for the given spending and from increased developer contributions. | ||||
Local transport |
2,435,000 |
1,247,000 |
1,188,000 |
1,218,000 |
Strategy: In line with overall strategy | ||||
Key actions: A thoroughgoing administrative review has taken place from which savings are now expected. Volume discounts are being pursued for road maintenance work. It is hoped to achieve more recycling output from the existing waste management investment. More efficient means of dealing with waste management capital assets are being examined, and savings are anticipated from the abandoned vehicles budget. Reviews are under way on the split between area and headquarters functions, on speed management and on discretionary services with a view to delivering efficiencies. New ways of resurfacing roads are being examined which it is hoped will extend the life achieved without increasing cost. A comprehensive review of community (Cango) and quality bus partnerships is being undertaken in order to identify the scope for reducing bus subsidies. The Environment Department manages major capital spend: given that this is ring-fenced, efficiency efforts will be directed towards achieving more than the targets prescribed for the given spending and from increased developer contributions. | ||||
LA social housing |
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|
|
|
Strategy: | ||||
Key actions: N/A | ||||
Non-school educational services |
1,036,000 |
518,000 | ||
Strategy: In line with overall strategy | ||||
Key actions: Potential improvements are being investigated in home-to-school transport contracts and management of children with special educational needs to avoid expensive non-county placements by more economic internal arrangements. The possibility of reducing insurance costs is also being examined. These major areas are being complemented by budget holder reviews, as it is believed that there is scope for small percentage reductions across all budgets. | ||||
Supporting people |
861,000 |
430,000 | ||
Strategy: Driven by grant reductions | ||||
Key actions: It is hoped to achieve significant net reductions in the supporting people programme, by reducing those budgets through contract renegotiation by more than any compensating amounts picked up in the core Social Care budget. | ||||
Homelessness |
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|
|
|
Strategy: | ||||
Key actions: N/A (except so far as incorporated in Supporting People) | ||||
Other cross-cutting efficiencies not covered above | ||||
Corporate services |
1,066,000 |
533,000 | ||
Strategy: In line with overall strategy with particular emphasis on making the best use of new Enterprise Resource Management System to drive process improvement, increase productive time and achieve more economic procurement (the latter picked up primarily in individual target areas). | ||||
Key actions: Improved efficiency in construction and contractor procurement, for example through how construction waste is managed and through e-tendering. There is thought to be scope to reduce staff absence and travel costs and to improve productivity in inspection and laboratory processes. There is also scope for more efficient use of office accommodation including more flexible working approaches. The buildings' capital programme will be managed to achieve cost savings and there will be an emphasis on revenue savings as a result of capital investment. There are already substantial benefit realisation proposals from the introduction of the enterprise resource management system which will secure savings in finance, human resources, IT and procurement from the elimination of duplicate and manual transactions, and re-designed business processes. In addition, there is further improvement anticipated in meeting | ||||
Procurement |
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|
|
|
Strategy: See corporate services | ||||
Key actions: Covered elsewhere, but will also incorporate Capital savings | ||||
Productive time |
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Strategy: See corporate services | ||||
Key actions: Covered elsewhere | ||||
Transactions |
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|
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Strategy: See corporate services | ||||
Key actions: Covered elsewhere | ||||
Miscellaneous efficiencies |
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Strategy: See corporate services | ||||
Key actions: Covered elsewhere | ||||
Total |
14,226,000 |
7,113,000 | ||
NB: The ODPM electronic template requires transport capital targets to be identified but prevents any similar identification for other services, therefore figures are not consistent across services.