Councils must move from simple efficiency gains to 'truly transformational' services during the credit crunch, or face an 'uphill struggle' to achieve their ￡5bn savings target, the Audit Commission has warned. A report by the watchdog, published on 8 October, warns councils against 'complacency' over the Treasury-imposed savings target for 2010. Michael O'Higgins, Audit Commission chairman, told The MJ: '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 mustn't suffer.' But, having delivered ￡4.3hn in savings between 2005 and 2008, some councils have indicated they could struggle to deliver more during the economic downturn. Some investment projects, such as IT overhauls, have been delayed while officials assess declining resources. Mr O'Higgins said authorities should still take brave steps in overhauling 'back-office' functions such as finance, HR, IT, procurement and legal functions. While many councils reconfigured back-office functions between 2005/08, by in-sourcing and merging departments for example, Mr O'Higgins said they needed to move from these 'easier' gains to truly transformational support services 'where efficiencies also feed through to frontline services'. Sarah Furlong, author of the study, added: 'Shared services are an integral part of that.'
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