On this page:
- Background to the efficiency measures
- The 25 efficiency measures
- Guidance to monitoring and reporting
- Frequently asked questions
A project was undertaken during 2006/7 to develop a set of measures for use by Scottish local government as the basis for monitoring efficiency improvement in future years.
The aim of the project was to provide a transparent method for local authorities to measure efficiency gains and to account and report on them in a consistent manner.
The measures were developed by local authorities themselves using a highly collaborative process. This included a three-day event in October 2006 involving 25 councils, wider consultation through an online discussion forum and in-depth discussions with relevant professional associations.
This section provides background to the project and links to the measures themselves.
Further information and advice on the measures are available from Mark McAteer at the Improvement Service on 01506 775558.
Further information
Scottish local government efficiency measures service framework (This classification was used to structure the October event and focus discussion by the event participants. It is not intended to proscribe actual organisational structures, which remain a matter for individual councils.)
Scottish Executive Efficiency Technical Notes
Guide to Leading Practice Performance Management
During 2005/06 the Improvement Service, with the support of COSLA and SOLACE commissioned research by Bishops Consulting and IPF. The research found that an estimated £122m efficiency savings had been achieved across all local authorities in Scotland in that year. In light of these findings, COSLA Leaders committed to the development of a common template and set of measures as the basis for monitoring efficiency improvement in future years. COSLA Leaders also made a commitment that an annual efficiency statement would be prepared by each Council.
The Efficiency Measures Project
The project to develop a national set of Efficiency and Productivity measures was primarily commissioned to provide a common framework for councils to calculate efficiency improvements so that the Annual Efficiency Statement can be populated on a consistent basis. The focus of the project therefore was to develop a broad set of measures from which each council would be free to select those indicators that it felt it was relevant to report against in any given year.
Efficiency in the context of the ‘Efficient Government’ programme is defined in two broad ways:
-
Achieving the same or a higher level of output on a lower input (cashable) or;
-
Achieving a higher level of output on the same input (non-cashable).
When did the project take place?
A project to develop the efficiency measures was initiated in mid 2006, with work formally starting in September 2006 and running through to March 2007. The project was formally completed and signed off by COSLA Leaders in April 2007. The key stages in the development of the measures were:
-
October 2006: The initial set of draft measures were developed at a large scale collaborative Event attended by 60 participants from 27 Scottish councils, together with representatives from COSLA and the Improvement Service.
-
Mid November – December 2006: The draft set of measures were opened to consultation by all councils and other stakeholders through an on-line discussion forum.
-
November 2006 – January 2007: Detailed definitions were developed for each measure through in-depth discussions with the relevant professional bodies.
-
End January – mid February 2007: A second round of consultation was run through an on-line discussion forum for all stakeholders in which to review and comment on the measure details.
-
Mid February – April 2007: Following final refinements as a result of feedback from the second round of consultation, the project was signed-off by COSLA Leaders in April 2007.
-
Mid May 2007: the measures plus supporting guidance and other information was placed on the IS web site.
Outcome of the project
The project has identified 25 high-level measures that will enable councils to track efficiency and productivity savings and which span all the major service areas.
Who can I get further advice from?
Further advice can be gained from
at the Improvement Service on 01506 775558.
Unit cost measures
Total cost measures
Sickness absence
| CM3 | Days lost through sickness absence expressed as a percentage of total working days available |
Guidance on monitoring and reporting
The 25 efficiency measures have been developed to enable local authorities to produce annual efficiency statements in a transparent and consistent manner. These statements will add to the accountability arrangements for each council locally and nationally. The statements should also prove to be of great benefit in the sharing of best practice across the local government community and so further accelerate progress of becoming ever more efficient.
A framework document has been produced to assist local authorities in preparing efficiency statements for 2006/07. Efficient Government reporting - a framework for local authorities in Scotland provides guidance on the structure of efficiency statements and their publication, and includes an efficiency savings template for use by local authorities.
Frequently asked questions (FAQs)
Why was the project initiated?
In 2005/06 the Improvement Service, with the support of COSLA and SOLACE commissioned research by Bishops Consulting and IPF in which it was estimated that £122m efficiency savings had been achieved across all local authorities in Scotland in that year. Following this research, an undertaking was given that a common template and set of measures would be developed as the basis for monitoring efficiency improvement in future years. In addition there was a commitment by COSLA Leaders that an annual efficiency statement would be prepared by each Council.
Who were the sponsors?
The project was sponsored by COSLA and had the backing and support of SOLACE, Audit Scotland, the Scottish Executive and the Directors of Finance.
Who led and carried out the project?
To ensure that the project was a success a Steering Group with representation from COSLA, SOLACE, Audit Scotland, the Scottish Executive and the Directors of Finance, as well as from the Improvement Service, was set up to lead and monitor delivery of the project. Aspiren Ltd, a leading consultancy specialising in performance management, were commissioned to partner with us to deliver the work and provide support and expertise.
What is the definition of efficiency?
Efficiency is about raising productivity and enhancing value for money. An efficiency gain is made when, for a given area of activity, an organisation is able to:
-
Reduce the level of inputs for the same outputs;
-
Get greater outputs for the same inputs;
-
Increase outputs by a proportionately smaller increase in inputs;
-
Decrease outputs in return for a proportionately larger decrease in inputs;
-
Realise improvements in service quality for the same inputs.
When did the project take place?
The project was initiated in Summer 2006, with work formally starting in September 2006 and running through to March 2007. The project was formally signed off by COSLA Leaders in April 2007.
How were the measures developed?
The key stages in the development of the measures were:
-
October 2006: The initial set of draft measures were developed at a large scale collaborative Event attended by 60 participants from 27 Scottish councils, together with representatives from COSLA and the Improvement Service.
-
Mid November – December 2006: The draft set of measures were opened to consultation by all councils and other stakeholders through an on-line discussion forum.
-
November 2006 – January 2007: Detailed definitions were developed for each measure through in-depth discussions with the relevant professional bodies.
-
End January – mid February 2007: A second round of consultation was run through an on-line discussion forum for all stakeholders in which to review and comment on the measure details.
-
Mid February – April 2007: Following final refinements as a result of feedback from the second round of consultation, the project was signed-off by COSLA Leaders in April 2007.
The diagram below illustrates the key phases of the project: 
What were the objectives of the Event?
-
Understand and agree the importance of the efficiency agenda to local government
-
Agree the role of performance management to deliver improvement
-
Validate service area classifications and agree key outcomes
-
Build and agree a framework of appropriate efficiency and productivity measures that enable better customer outcomes
-
Through collaborative working, demonstrate and share leading practices on genuine efficiencies across local authorities to maximise opportunities
-
Collectively agree and commit to the way forward
What happened at the Event?
Participants worked intensively and creatively to produce a draft set of efficiency and productivity measures. In total 38 draft efficiency and productivity measures were developed, which sat across eight key service areas: Children's Services, Corporate Management, Corporate Services, Cultural Services, Environmental Services, Public Protection & Regulation Services, Regeneration Services and Social Work. At the end of the event all the participants signed up to the measures as a demonstration of their buy-in and commitment to take them further. Many of the participants also volunteered to continue to actively support the project and to work with the Improvement Service and Aspiren to gather the views of their colleagues on the draft measures and to develop the detail required for their implementation. Was there wide consultation on the draft measures?
Following the Event two rounds of consultation were conducted through an internet-based discussion forum. All council chief executives and senior managers were invited to engage in the consultation process and to comment on, challenge and improve the measures. In addition extensive face-to-face meetings and teleconferences were held with relevant professional bodies to get their input to the development of the measures.
Was the consultation successful?
The level of engagement in the consultation process was excellent. Across the two rounds of consultation there were over 5,100 views of the measures and over 410 items of feedback, ranging from comments on specific measures from individuals to full corporate responses on the complete set of measures. All 32 councils got involved in the consultation in some way, and feedback was received from 29 of them.
How do the measures relate to the Statutory Performance Indicators (SPIs)?
The Accounts Commission for Scotland have agreed to a moratorium on the SPIs to 2008 to give the local government community the opportunity to develop an alternative framework for local authority performance management and reporting. The development of the efficiency measures has been prioritised ahead of the wider SPI development due to the need to have a reporting framework in place now. However the work that has been done will feed into the wider SPI development project to ensure that these measures are used and that there is no duplication of effort.
Where do I find the details of the measures?
A full set of the measures are available on the Improvement Service website.
The measures seem to focus on inputs. What about quality of service delivery?
It is important to ensure that any reported efficiency gains have been achieved as a result of a genuine improvement in efficiency as opposed to as a result of cutting costs through service cuts. So when claiming efficiencies councils will need to demonstrate that quality of service delivery has been maintained at the local level. This assurance is provided by the quality crosschecks that have been identified for each measure.
Many of the measures are high-level and thus do not provide the operational detail that is required to drive performance. Why is this?
It was recognised that the way in which councils pursue efficiency improvement will be highly varied. In addition it was never intended that a small set of national indicators should ever substitute local management information. As a result the emphasis throughout the project has been on developing a small number of high-level tracking indicators that can be uniformly adopted by all councils and that capture the outcome of local efficiency initiatives over time.
To supplement this high-level focus though, a number of drill down indicators have been identified for each measure. These are suggestions of indicators that managers may want to use to provide the additional information and insight required to explain movements in the high-level measure.
How do I calculate the efficiency gains from the unit costs?
A detailed guidance document has been produced to explain how the information from the measures should be used to calculate the overall efficiency savings that need to be reported in the annual Efficiency Statement. This can be found on the Improvement Service website.
Will all councils be using the measures?
In 2006/07 the use of the measures will be optional although it is hoped that councils will use them to determine their baseline unit costs for subsequent years. From 2007/08 there will be a requirement for councils to produce an annual Efficiency Statement, and they will need to use the measures to populate this.
Will all measures need to be reported on?
It is recognised that each council will have their own plans for efficiency improvement focussed on particular corporate and front line services. As a result councils will not be expected to report against each measure every year, and will instead only be required to report on those measures relevant to their plans.
Will performance against the measures be reported publicly?
The Scottish Executive requires only a composite figure from the 32 councils. It will be up to each council to decide what to report to their residents.
Will performance between councils be compared and league tables produced?
There is no intention to develop any league tables. However the absence of any such tables should not prevent any council from comparing itself to another on a ‘like for like’ basis when it wants to. It will be for each council to decide which other authorities are relevant to it when seeking to make such comparisons either across the entire range of measures or across specific ones. Such information will hopefully be used to raise good practice issues between relevant councils so that they can learn from each other. Therefore any benchmarking voluntarily undertaken by councils will be focused on process and other issues rather than on a set of statistical returns.
What is the CIPFA Best Value Accounting Code of Practice (BVACOP)?
The aim of the code is to modernise the system of local authority accounting and reporting to ensure that it meets the changed and changing needs of modern local government; particularly the duty to secure and demonstrate best value in the provision of services to the community. It provides guidance on financial reporting for stakeholders. The overall framework supports the objective to establish the widest range of financial reporting requirements, so that data consistency and comparability is achieved. The Best Value Accounting Code of Practice in particular aims to meet the demands of the Best Value initiative and its various stakeholders. We have tried to adopt CIPFA cost definitions wherever possible to avoid the development of any conflicting standards and to minimise the work-load for councils when reporting on the measures.
Where can I find information on good practice in performance management?
A guidance document has been produced by Aspiren, the consultants who helped develop the measures, and can be found on the Improvement Service website.
Who can I get further advice from?
Further advice can be had from
at the Improvement Service on 01506 775558.
