Annual Efficiency Statement

Sir Peter Gershon's report, published in July 2004, identified the opportunity to make £21.5bn of sustainable efficiency savings across the public sector by 2007/08. Of this total, at least £6.45bn would be achieved in local government in England, equivalent to 7.5% of spending in 2004/05. This figure was adopted as the official target for local government, as follows:

• total efficiency gains equal to at least 2.5% of expenditure in 2004/05 by the end of 2005/06, 5% by the end of 2006/07 and 7.5% by the end of 2007/08
• cashable efficiency gains equal to at least 1.25% of expenditure in 2004/05 by the end of 2005/06, 2.5% by the end of 2006/07 and 3.75% by the end of 2007/08

On that basis, the Government set the following targets for Lewes District Council:

• 2005/06 efficiency target - £309,000
• 2006/07 efficiency target - £617,000
• 2007/08 efficiency target - £926,000

The Government published detailed guidance on how efficiency gains were to be measured, and as part of the overall framework Councils were required to report on both their plans to make efficiencies and their achievements in doing so through the Annual Efficiency Statement (AES) process. At the start of each financial year, the Council was required to prepare a 'Forward Look' AES, setting out its intentions for the year ahead. At the end of each year, a 'Backward Look' AES was required, explaining the efficiency gains that were achieved. All AES statements were submitted to the Government, and were subject to review by auditors appointed by the Audit Commission.

The Council reported total efficiency savings of £966,900 over the three year period to 31 March 2008. Copies of the Council's AES Statements can be downloaded from the 'Relevant Documents' links on this page. Please note that an on-line tool was used to submit AES Statements to the Government's Department for Communities and Local Government (DCLG). Unfortunately this tool did not allow for the finished AES to be saved or printed in a well presented way.

The system of Annual Efficiency Statements has now ended. However, the Government's Spending Review 2007 continues to require the local government sector to achieve efficiency gains: for the period 2008/2009 to 2010/2011, annual cash releasing value for money gains of 3% are expected, although the Government has not set targets for individual councils. A 3% cash releasing efficiency gain for this Council represents £597,000 in 2008/2009 and £1,845,000 over the three years to 2010/2011. All councils are required to calculate the savings that they achieve and report them as a National Performance Indicator.

Further information on the Government's efficiency agenda for local government, including copies of all local authorities' AES documents, can be found on the DCLG website. See the useful link at the bottom of this page.