Efficiency Savings – a Good Practice Guide

Background

Efficiency is one of three criteria used to assess value for money, alongside economy and effectiveness.

Efficiencies are secured through smart use of public money, in one of two ways:

• less is spent to achieve the same or greater outputs and outcomes; or
• the same (or sometimes more) is spent but correspondingly greater outputs and outcomes are realised.

It does not include decisions to reduce costs with the intention to achieve less – these are non-efficiency savings.

This Good Practice Guide is written to be relevant at all levels of public sector planning and delivery.  It aims to provide insights and practical approaches to maximise success in identifying and implementing efficiency savings.

Scope

The Guide is structured into three key areas:

• Identifying efficiencies
• Planning to achieve efficiencies
• Embedding efficiency gains

It clearly sets out steps to identify, evaluate, implement and realise the benefits of efficiencies savings opportunities.

In Identifying efficiencies, the Guide examines:

• Efficiency savings in the context of public services
• Identifying efficiency opportunities
• Types of efficiency savings initiatives
• Tools for identifying commissioning and procurement efficiency savings opportunities; and
• Other practical considerations.

Planning to achieve efficiencies, considers:

• Selecting initiatives to pursue
• Consistent evaluation
• Quality of information
• Maturity
• Effective communications; and
• Other practical considerations.

Embedding efficiency gains highlights:

• Leadership and ownership
• Support and opportunities
• Benefits realisation
• Focus on continuous improvement; and
• Planning for success.

Conclusions

The Guide highlights efficiency savings opportunities in key areas such as:

• budgeting
• digital
• service evaluation, planning and delivery; and
• procurement.

It concludes with a sample evaluation framework and an example checklist and points for reflection, intended to help secure successful efficiency savings initiatives.