The Efficient Government Initiative: 
a progress report – podcast transcript

Leon:  Hello, I’m Leon Thomson and I’m joined today by Graeme Greenhill, Senior Manager in the Public Reporting Group at Audit Scotland and we’re going to be discussing the report on the Efficient Government Initiative.  So Graeme, why has Audit Scotland prepared this report?
Graeme:  The Efficient Government Initiative is an essential part of the Executive’s programme of investment reform and modernisation of the public sector.  We’ve produced this progress report to bring to Parliament’s attention the scale of reported efficiency savings made to date and to provide independent comment on whether they are founded on robust processes and information.  

Leon:  I see, so what’s the main conclusion from this report?
Graeme:  The Scottish Executive reported efficiency gains of £442 million pounds in 2005/06 although more needs to be done to provide assurances on the accuracy of reported savings.  In particular, the Executive needs to make further progress on improving its processes for calculating efficiency savings and for ensuring that savings do not result in service cuts.  For example, there is a need to continue improving the development of robust baselines so that a line in the sand is provided against which improvements can be measured.  There is a need to better identify output quality measures in order to make that savings do not simply result in service cuts and there is a need to improve how efficiency gains are calculated, which includes the deduction of development costs and independent checks on the scale of reported savings.  

Leon:  The report questions the way in which some of the efficiencies reported by the Executive were calculated.  Can you give examples?
Graeme:  Yes, a good example might be the £122 million efficiency gains reported by local authorities.  This is based on a study which estimated efficiency gains of £83 million in 21 councils and this figure was then extrapolated across all 32 councils.  The £83 million comprises £37 million calculated from case studies at 6 councils and £46 million calculated from survey questionnaires completed by another 15 councils.  The 6 cases studies were subject to scrutiny and review but the survey data was not challenged and we would expect to see a greater challenge function in future years and for any extrapolation of savings to be robustly based.  Another example might be in the use of classroom assistants.  This is a project which is intended to increase staff productivity by releasing teachers form administrative tasks to allow them to spend more time with individual pupils.  The calculation of efficiency gains is based on the difference of the annual salaries of teachers and classroom assistants multiplied by the number of assistants employed but there are no measures in place to identify the extent to which teachers are used more productively.  

Leon: Now, without the appropriate measures in place how can we be sure that efficiencies aren’t being made at the expense of public services?
Graeme:  For a saving to be regarded as an efficiency gain there must be no decline in the quality of public services.  This report says that further improvements are needed in the way efficiencies are measured before we can be sure that services are being maintained.  That said the public sector is generally responding well to the initiative by embedding it in its day to day business.  

Leon: And going forward, how will Audit Scotland be involved in the Efficient Government Initiative?  
Graeme:  We will continue to monitor the development of efficiency technical notes, the level of efficiency savings reported and the implementation of the necessary improvements which this report highlights.  We will consider whether a further report is warranted and what it will cover in due course.

Leon:  Graeme Greenhill, thanks very much.