What does the 'efficiency agenda' mean for local authorities?
As local authorities face up to the formal targets for efficiency gains at the same time as tackling the huge challenges involved in delivering recycling services and changing the way residual waste is managed, the prospects can seem pretty daunting. But is it really such bad news, or can something more positive be achieved? In a specially contributed article, John F Burns, Programme Director of DEFRA's Waste Implementation Programme (WIP), explains what the 'efficiency agenda' means for waste management
At its heart, the efficiency agenda represents an opportunity: a chance to identify resources capable of reinvestment in the frontline or to hold down Council Tax. In waste management, this means that improved efficiency should allow authorities to redirect the resources that are released to support the delivery of improved services and infrastructure - helping to meet their ambitions to set-up and boost recycling and cleaner ways of managing waste.
If the first returns under the Annual Efficiency Statement (AES) process are anything to go by, many local authorities do seem well prepared for identifying efficiencies in their waste management and street cleansing functions. But the key areas where there is scope for significant efficiencies may bear repeating.
DEFRA's new Waste Performance and Efficiency Grant is providing some additional funding to local authorities to support the delivery of their waste management functions. Advice is also available on the best ways to invest this funding, including strong encouragement to consider whether awards can be combined and used to support more effective partnership working. Collaborating provides a golden opportunity to share know-how and, where appropriate, to pool and even reduce the resources that go into procurement.
Scope for collaboration
For example, the view that efficiency gains can be achieved by greater degrees of collaboration between councils - including effective joint working between waste collection and waste disposal authorities - is becoming increasingly widespread. There are plenty of examples which show that co-operation between local authorities can work well - often through collaborative procurement or joint service delivery arrangements for some waste management services.
The Lancashire Waste Partnership incorporates 15 Lancashire waste authorities, at both officer and member level, in an active approach to integrated waste management across the whole county area. The partnership has been successful in securing funding that includes: £75 million PFI credit approval; more than £14 million through the DEFRA Waste Minimisation and the Recycling Fund, £3.2 million through Landfill Tax; and more than £1.1 million through WRAP. All members of the partnership have achieved BVPI targets for 2003-04 and are set to achieve their targets for 2005-06
Some significant work is in hand to help encourage more collaborative working. A strong example is the new Innovation Forum project to identify and then to tackle barriers to partnership working at local authority level.
Run by a group of "excellent" authorities led by West Sussex County Council, and supported by DEFRA, ODPM and the LGA, the project should help to assess and disseminate best practice and develop a range of models for joint working - from informal arrangements through to formally established partnerships.
DEFRA's Waste Implementation Programme (WIP) is one of a number of bodies providing guidance and advice to local authorities to help improve procurement skills and support successful engagement with the process overall, including PFI-based procurements.
A range of advice is available, including help with contract design and negotiation to
save time and money, and feed into effective contracts with industry and/or community groups.
With some exceptions for high-performers, local authorities in two-tier areas now need to put in place a joint municipal waste management strategy. This should provide a further platform for looking at collaborative working - to help in promoting better joint strategic planning and decision-making. DEFRA is issuing policy and practice guidance to help local authorities put in place effective and comprehensive strategies.
For example, in two-tier areas there may be scope to implement joint initiatives that support delivery of the waste disposal authority's obligations under the Landfill Allowance Trading Scheme (LATS). Alternatively, it may be possible to use the awards as an opportunity to look at establishing or improving local governance structures and decision-making arrangements for joint working. At the operational level, the grant could be used to implement common branding or common levels of service provision, to strengthen arrangements for shared operations or back office functions,
or to look at joint procurement of waste collection or disposal services.
The "Kelly" Programme within the Office of Government Commerce is currently working with the LGA, WIP, the Office of
Fair Trading and the Regional Centres of Excellence, taking forward a survey of local authority municipal waste services over the next few weeks. This should help to provide better information on current and future local authority demand for waste management services and treatment facilities across England.
The survey is not an end in itself. Information will be used to deliver a number of benefits, including help to improve strategic procurement in the municipal waste management sector by clarifying the need for new sites and facilities as landfill diminishes in importance. This should provide good information on demand requirements for waste services to support better capacity planning for bidding and delivery by suppliers. It should also help to advance the programme that WIP is delivering to promote best practice and standardise procurement operations. Ideally, it will assist in developing an efficient trading market under the new LATS too.
The publication of PPS10 by ODPM has provided a great opportunity to ensure that planning and strategy processes can be closely integrated. All this should help local authorities to plan more effectively and get the waste facilities on the ground that are needed to deal with waste that is being diverted from landfill.
This autumn, as communication from DEFRA about efficiencies becomes more active, WIP will publish an update to its Environmental Services Efficiency Toolkit to help local authorities identify and calculate the Gershon efficiency savings that are being achieved. The opportunity is there to get things right ahead of the mid-year update due from local authorities in November under the AES process.
We hope that the toolkit will help authorities to forecast, calculate and demonstrate the gains that have been achieved. It should also help authorities to understand how efficiency sits with meeting wider council objectives
on environmental services, which may be important in planning local waste management strategies.
The recent returns by local authorities under the AES process show that considerable progress is being made in delivering efficiency gains in the waste area already.
Our aim, in DEFRA, is to support and help to accelerate this process by providing the
right kinds of advice and support to local authorities.
It would be a mistake to pretend that the efficiency agenda does not present a considerable challenge. But, together, there is a great opportunity to meet the targets and, more importantly, to drive more effective and efficient waste management and move
towards our targets for managing waste more sustainably overall.