The Gershon Review identified scope for 2.5 per cent. per annum efficiency gains in local government during the 2004 Spending Review period, and this figure was adopted by the Government as a target for every local authority. This equated to £1 billion of new efficiency gains from councils in each year. At least half of these gains had to be cashable, i.e. release cash that could be reallocated by councils to meet local priorities. The Gershon Review set no targets for headcount reduction in local authorities.
Councils reported that they achieved £1.2 billion of new efficiency gains during 2005-06, of which £0.9 billion were cashable. They are due to report on the new gains achieved during 2006-07 in the summer. Information on the efficiency targets for individual councils, and the gains they have achieved so far, is available on the Department’s website at:
http://www.communities.gov.uk/index.asp?id=1134484