Councils could save more than £300m each year if they reduced the costs of social care assessments, a spending watchdog has reported.

An Audit Commision study – Reducing the cost of assessments and reviews – calculates if best practice was matched evenly by all councils, a sum equivalent to providing annual care packages for 20,000 elderly people could be released.

According to the Commission, the number and cost of assessments and reviews has soared significantly in recent years following policy changes such as moves toward the personalisation of care.

However, the report reveals the most efficient authorities spend about half the sum of the most expensive councils in undertaking individual assessments and reviews, despite carrying out a similar volume of work and attaining the same quality standards.

Managing director for the Audit Commission, Andy McKeon said the evidence suggests that councils can spend less and still do an excellent job in helping people receive the care that they need.

‘As councils struggle to meet the needs of a growing older population with less cash, any opportunity to save money and redirect it into care should be pursued enthusiastically, Mr McKeon said.

In response, Cllr David Rogers, chairman of the Local Government Association's community wellbeing board said the figures cited simply paper over the cracks, and warned ‘it would be wrong to suggest that efficiency savings alone will solve the immediate and growing funding crisis'.

‘The cost of social care already takes up more than 40 per cent of council budgets. Yet councils, who are already facing an estimated £1 bn reduction in social care budgets, and this year will have to find an additional £890m, will see a further £2bn added to the annual cost of adult social care in 2015 due to demographic pressures alone,' said Cllr Rogers.