Report of the Local Government Efficiency Review Group

support ongoing efficiency and value for money in the local government
sector, including:
• Financial management systems;
• Five-year multi-annual capital investment programmes;
• Value for money auditing;
• Shared services;
• Service indicators; and
• Aggregated procurement of goods and services.
11.6.2 However, as detailed in this report, the need for specific measures to
increase efficiencies is recognised. In this context the Group considers that
there is merit in putting in place incentives to support and reward best
practice in achieving efficiencies.
11.6.3 The Group recommends that local authorities should be incentivised and
rewarded where they achieve innovation and efficiencies in their operations
and services. To advance this agenda, the Group considers that a modestly
funded Innovation Fund should be established within 12 months to reward
authorities that can demonstrate these values in the local government
sector. This Fund should be financed from the efficiency savings to be
made in the context of the implementation of the recommendations
contained in this Report.
11.6.4 Local authorities could be invited to make submissions or bids for funding
from the Innovation Fund in respect of projects which, in their opinion, would
have the potential to improve efficiency and value for money in the sector.
Such projects should be part-financed through a local contribution.
Although local authorities would submit applications, the projects could
involve other publicly-funded bodies at local level, particularly where they
involve proposals for delivery of joint service initiatives as agreed by the
local County/ City Development Board CDB – see section 12.4). Given that
the potential for efficiency in local government spans significant areas of
activity, the Group considered that apart from some general provisos, the
terms of the Innovation Fund should not be too prescriptive as to the precise
nature of the area which would qualify for funding.
11.6.5 Some of the areas under which local authorities could put forward proposals
include:
• Feasibility studies/ seed funding – local authorities could be invited to
put forward feasibility study projects for consideration which they
consider to have the potential to yield efficiencies across the sector;
• Pilot projects to examine alternative delivery mechanisms, such as the
potential of shared services or joint service provision both between
local authorities, but also between local authorities and other publiclyfunded
service providers as agreed by the local CDB;
• E-government – projects that would improve customer service and at
the same time enhance efficiency within the organisation;
150