Alongside the Comprehensive Spending Review 2007 (CSR07) announcement in October, central government also published a new document titled 'Delivering Value for Money in Local Government - Meeting the challenge of CSR07', which sets out the changes to the reporting requirements for efficiency gains (see link on left).

The 2007 spending review requires councils to achieve 3% cashable efficiency gains per annum.

From 2008-09, the only information that all councils will be required to report to central government about their efficiency performance is National Indicator 179: Value for Money - the total net value of ongoing cash-releasing value for money gains that have impacted since the start of the 2008-09 Financial Year. The value of this indicator is akin to the figure currently reported in the Annual Efficiency Statement (AES) for total cumulative cash-releasing efficiency gains.

The rest of the reporting requirements in relation to the AES are no longer required. Thus, for external reporting purposes, it will not be necessary to break the indicator down by service sector and there will be no accompanying text to describe actions taken or information on service quality.

Councils will be required to submit a figure for the value for money indicator twice in each year. On the first occasion, starting from October 2008, councils will report their forecast for the position at the end of the financial year. This is akin to the output of the Forward Look AES (No Forward Look AES will be required in April 2008, as was previously the case).

On the second occasion, starting from July 2009, councils will report the actual position as at the end of the financial year that ended on the previous 31 March. This is akin to the output of the Backward Look AES.

It will still be necessary, however, to ensure that robust processes are in place to identify and monitor efficiencies to provide a sound evidence base for the value for money indicator.

There will also be no mandatory VfM (Value for Money) target for all councils in CSR07. They will only exist if they are negotiated as one of the Local Priorities in a Local Area Agreement, which is the case for seven councils in England for 2008/09.

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