Councils slash back office costs by £1.2bn

Local authorities have saved a total of £1.2bn through changes to back office functions such as HR, according to the public sector spending watchdog.

The Audit Commission said reforms to functions like human resources, IT, facilities management, finance and legal services had resulted in a quarter of the £4.3bn efficiency savings made following the Gershon Review in 2004.

But the Back to Front report warned that councils face an uphill struggle to contribute to a further £4.9bn of savings, detailed in last year’s Comprehensive Spending Review, before 2010.

Making more savings behind the scenes needs a strategic and long-term ‘transformational’ back-to-front approach, delivered in a tighter economic climate, the report said.

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Audit Commission chairman Michael O’Higgins said: “Back office efficiencies aren’t exactly headline-grabbing, but they are essential if councils are going to deliver quality services in a climate of cut-backs.

“Councils must take a long hard look at what they are doing: £4.9bn is a lot of money, but it has to be saved, and services must not suffer.”