To ask the Chancellor of the Exchequer pursuant to the answer to the hon. Member for Meriden of 25 January 2010, Official Report, column 598W, on local government: cost effectiveness, what methodology was used to identify £550 million as the expected figure for savings from local government; and what arrangements will be made for local authorities unable to reach their targets for efficiency savings.

The 2009 pre-Budget report sets out a number of areas where local government will be able to find efficiency savings over the next spending period, of £550 million per year by 2012-13.

Departments have worked closely to explore potential savings across the different functions and service areas of local authorities, and the scope for local initiatives that have delivered savings to be taken up more widely. It is for individual local authorities to make efficiencies based on local priorities and use of resources.

During the CSR 2007 period, local authorities have been free to use savings to hold down council tax or reinvest in other services. Councils do not have individual targets, but where a council is failing to deliver the level of efficiencies expected of the sector as a whole, we would expect the Regional Improvement and Efficiency Partnership and local government office to play an active role in supporting the council.