Explanation of efficiency comparisons in the 2009/10 budget leaflet

The Government required local authorities to include prescribed information about efficiency savings on the 2009/10 council tax bill and the accompanying leaflet.

This included a requirement to present efficiency savings expressed in terms of a Band D council tax and compared with the average for county councils. Despite the fact that the County Council’s forecast efficiency savings as a % of the budget in 2008/09 are higher than the County Council average (3.5% compared with 3.4%), expressed per Band D council taxpayer efficiency savings are below average (£47 compared with £53).

This is for two reasons:

• Firstly, authorities with low spending per head of population such as Hampshire County Council, achieve smaller cash savings from a given % increase in efficiency than a higher spending council, and

• Secondly, expressing the savings per Band D taxpayer is significantly affected by the level of the council taxbase in a particular area and adversely affects authorities like Hampshire County Council with a relatively high council tax base.

The table below illustrates how a 3% efficiency saving is expressed quite differently in Band D council tax terms depending upon the local authority area.

	3% Efficiency saving as per Band D council taxpayer
	£
Surrey	35
Hampshire	40
North Yorkshire	61

For these reasons the County Council takes the view that expressing efficiency savings per Band D council taxpayer is a misleading measure of comparative performance.