Efficiency savings during the SR04 period (2004/05 to 2007/08)

The Government's 2004 Spending Review set every council the target of 2.5% efficiency gains in their non-schools expenditure each year for 2005/06, 2006/07 and 2007/08 - with 2004/05 acting as a base line. At least half of the efficiencies identified should be cashable in the form of lower costs. The remainder of the gains are non-cashable; where gains may not lead to lower costs, but result in improved services.

Councils' plans for future efficiencies were submitted to the Communities and Local Government (CLG) as an Annual Efficiency Statement (AES) Forward Look. Efficiencies achieved during a financial year were declared in an AES Backward Look. Relabelling of activities, cuts resulting in poorer service and increasing charges to give a decrease in net spend, are not allowable as efficiency improvements in the AES.

During the SR04 period Hampshire County Council achieved efficiency savings of around £72 million, of these nearly £52 million were cashable savings. The value of any ongoing cash-releasing gains in SR04 that are over and above 7.5% of the County Council's 2004/05 baseline may be carried forward into CSR07. This enabled the County Council to carry forward £8.2 million to 2008/09.