CBI’s ‘estimated savings are pie in the sky’ – LGA

Thursday September 27th, 2012

www.govopps.comThe Local Government Association (LGA) has responded to a report, published by CBI, saying ‘the estimated savings are pie in the sky’ and ‘ludicrous.’

The report – Open access: Delivering quality and value in our public services – calls for more public services to be opened up to competition.

Councillor Peter Fleming, Chairman of the LGA’s Improvement and Innovation Board, said: “The estimated savings are pie in the sky. Councils already outsource more than any other part of the public sector and are examining every avenue to provide value for money for taxpayers. However, the CBI calculation assumes that cost is the only criteria councils have to consider, and rickety methodology means fresh savings are being claimed for services which have already been outsourced.

The Open access report underlines major savings that the government can achieve when public services open up to a range of diverse providers. Stating savings would come primarily from efficiencies and productivity improvements. Much like the current strategy, but to a higher standard and at a lower cost.  

Also, the analysis highlighted that more could be done if independent providers were given the opportunity.

“Local authorities routinely look at how services can be delivered better and more cheaply. In some cases the private option is the best and in others councils find better value, a superior service and more control over standards by keeping services in house. A narrow ‘private good, public bad’ approach just doesn’t add up for local communities.”

“This is an important debate and we need to base it in reality. A blanket assumption on the savings that can be delivered by opening services to tender is ludicrous. Clearly when it comes to essential, big cost areas like social care the drive to save money has to be tempered by the need to maintain high standards and ensure strong lines of democratic accountability.

“The public sector does need to make sure it is providing value for money. That means not only opening public services to private providers when appropriate, but also tearing down the barriers between different parts of the public sector.

“Public services are more accountable, efficient and in tune with the needs of local people when they are delivered locally. A radical devolution of power could deliver enormous savings through pooling budgets at a local level, stripping the public sector of swathes of bureaucracy and unnecessary regulations.”

To view the CBI report, click here.

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