Councils resort to free labour in bid to achieve Gershon savings

MPs have raised concerns over methods used by local councils to meet the Government's target of finding back-office savings of £21bn over the next three years.

Among some the savings claimed there is £4,000 courtesy of a group of volunteers who improved a local park, and £500,000 from higher demand for car parking spaces.

All local councils have to submit the offers of cost saving to meet the target set by the Treasury following an efficiency review by Sir Peter Gershon.

It aims to take out 84,000 back-office civil services jobs either as job cuts or reallocation to the frontline, which along with other efficiency savings, should cut spending by £21bn by March 2008.

It was hailed by ministers as a way of pushing through IT and e-commerce as well cutting down on sickness rates and procurement costs. But evidence submitted to the Commons Treasury Select Committee showed councils' submissions included a wider interpretation of savings.

Fylde Borough Council in Lancashire included £4,000 that "equates to the cost of labour and other resources contributed by the Friends groups to improve Fairhaven Lake and Park View Playing Fields".

Leeds City Council said that £502,000 worth of car parking fees was "all revenue and all cashable" while Hampshire County Council extrapolated a saving of £4.5m from the use of speed cameras.

John McFall, the Labour chairman of the select committee, said it was doubtful that voluntary work for local people should be counted as a saving. "What we are looking for is an efficiency day out for volunteers," he told officials from the Treasury who were giving evidence to the committee.

"Dive into your local lake and you will save the Government and local authorities a hell of a lot of money. Is this what we are talking about?" Treasury officials have promised to give a written reply.

Mridul Brivati, the Treasury's director of public spending, said: "While I would not claim it is especially straightforward to trace these through, it is possible to ... understand how local authorities are contributing to the efficiency totals in that way."

Fylde council defended its submission saying it had helped it offer savings of more than £300,000 compared with its imposed target of £270,000. Alan Oldfield, its policy and change manager, said that as Gershon was still in its first year both councils and auditors were working out what could qualify as a saving. "It is innovative and it meets one of the key things that central government wants us to, which is to engage the local community," he said. "But the one thing we can't do is to cut a service.

"We don't want people to empty their own bins but even before Gershon came along we were looking at schemes like these.

"I strongly suspect [the auditors] will have a good look at the details and will ask whether some of these things are applicable."

The Treasury said all claimed efficiency savings would be audited by the relevant bodies, such as the National Audit Office, the Office of Government Commerce or the Office of the Deputy Prime Minister.

"There are checks and balances to ensure that what is being offered by various public sector bodies are legitimate savings," he said.

Creative cutting

'INNOVATIVE' SAVINGS ...

* Voluntary work by local groups to improve a local park and lake in Fairhaven, Lancashire, with the help of council training, saved £4,000 in time and equipment.

* Increased demands for car parking has delivered £502,000 of extra revenue net of price rises for one city council.

* One council said the Department of Transport's methodology showed that reduced accidents, injuries and fatalities following the installation of speed cameras would lead to a saving of £4.52m.

* A district council in the South-west used young adults to undertake works on the council's parks at nil cost, saving £3,000.

* The same council said its cultural services received 40 free staff hours of work week worth £10,000 from a probation group in exchange for giving them use of a floor of a council building.

... AND SOME CONVENTIONAL ONES

* A council that introduced networked photocopiers cut the the average cost per print to 0.4p from 4.2p.

* A new telephone system and a restructuring of the network and suppliers delivered a saving of £11,166.

* One city council saved more than £500,00 by reducing the number of days lost to sickness.

* A council saved £23,500 by putting its grounds maintenance contract out to tender at a fixed price.

* The renegotiation of a dog warden contract saved one council £9,000.

* The purchase of "suitable" software enabled a council to cut workstation support staffing costs by £1,230.