Local authorities wary of savings target

An article published today in FM World, the online magazine of the British Institute of Facilities Management, reported that local authorities are wary of savings targets.

More than eight out of 10 local government decision-makers believe the £5.5bn of efficiency savings by 2011 is “optimistic”, according to a survey by Interserve.

Also, 91 per cent of respondents expect a reduction in their government-allocated budget, noted the survey of 152 local government senior managers.

The responses underline the significant financial challenge that local authorities face, said the report. The efficiency target set by government for local authorities will require radical changes within local government, according to senior council employees.

Outsourcing is widely expected to be the answer to this problem. While total local government spend is expected to decrease, councils anticipate that spend on outsourced services will rise.

Almost three-quarters of respondents predict that outgoings to external service providers will increase as lower budgets and efficiency targets encourage councils to find economies of scale, specialist expertise and innovation from the private sector.

 However, opinion is split on other measures to increase local government efficiency, the report said.

The “Total Place” initiative has been seen as a way to improve or protect services while cutting costs, but half of respondents think that the programme will make no difference to services or will make them worse.

As a global leader in cost and purchase management, Expense Reduction Analysts are ideally placed to provide the specialist expertise councils are going to need to achieve these targets.