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Written Statement - Review of Local Authority Administrative Costs

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Research looking at moving resources currently spent on administrative functions within Local Authorities to support the delivery of front line services.
Leighton Andrews, Minister for Public Services

I am publishing today the report of the independent review on local authority administration costs. I commissioned this review to establish the scope to move resources currently spent on administrative functions within Local Authorities to support the delivery of front line services in Wales.

 
The report shows that in 2013-14, local authorities spent around 5.9% or £470 million of their total expenditure on administrative activities. This means that overall performance in Welsh local authorities is below the average for the sector compared to England. But it also shows that this administrative expenditure varies considerably across Wales, from 4% in Conwy and RCT to 10% in Monmouthshire.
 
This report identifies potential annual savings of up to £151 million, prior to any local government mergers. Of this, around £33 million savings could be achieved by authorities standardising their approach to the average in Wales, and an additional £45 million by standardising to the average sector level in England.
 
The report’s main recommendations focus on five key areas:
• Development of a pan-Wales ICT strategy;
• Consideration of moving transactional activities into larger processing centres;
• Adopting a best practice operating model for core functions of Accountancy and HR;
• A pan-Wales review of property management and estates.
• Rationalising legal services, strategy, communications functions across Authorities.

The KPMG report includes recommendations for Welsh Government and Local Government as a whole, as well as specific information for individual local authorities. Over the coming months, I will be working with local government to develop an action plan to take forward these recommendations and realise the savings available.