AGENDA ITEM 7
BOROUGH OF POOLE
REPORT TO CABINET
27 SEPTEMBER 2005
DELIVERING EFFICIENCIES IN LOCAL SERVICES
PART OF PUBLISHED FORWARD PLAN: YES
1. PURPOSE
1.1 To inform Cabinet of the requirements of this Government initiative and seek adoption for the strategy contained within this report.
2. DECISIONS REQUIRED
2.1 That Cabinet support the adoption of strategy outlined in this report in response to the requirements of “Delivering Efficiencies In Local Government Services”.
2.2 That Cabinet support the adoption of the draft Corporate Planning Framework indicated in paragraph 11.3 and request that Resources Overview Group further consider this framework with a view to making recommendations to Cabinet regarding it’s adoption.
3. BACKGROUND
3.1 In January 2005 the Government published a paper on “Delivering Efficiencies in Local Services”. The paper
· Set a target for efficiency gains in Local Government of 2.5% per annum through three years to 2007/8. These gains to be measured against a 2004/5 baseline.
· Indicated that 50% of efficiencies were to be cashable and 50% non-cashable.
· Required the Council to publish a “Forward Annual Efficiency Statement” endorsed by the Leader of the Council, the Chief Executive and Head of Financial Services (which was produced by the 15 April 2005 deadline).
· Required the publication of a backward looking Annual Efficiency Statement for 2004/05 (which was produced by the deadline of 15June 2005).
· Requires a mid-year update to be made to the ODPM in November 2005.
3.2 The Council has an annual efficiency target of £2.5m for each of the next three years producing a cumulative target of £7.5m. Any efficiency gains identified must continue through to 2007/8, one off gains cannot be included in the target.
3.3 Cashable efficiency gains are achieved by reducing inputs (money, people, assets) for the same outputs OR reducing costs for the same outputs. Non-cashable efficiencies are achieved by increasing outputs or improving quality for the same inputs OR getting more outputs or improved quality when input resources are increased that is proportionally greater than the new investment..
3.4 Cashable efficiency gains can be reinvested in frontline services or used for holding down Council Tax. A strategy for efficiency is an important requirement of the Council’s Medium Term Financial Plan.
3.5 Not regarded as efficiencies are cuts that result in poorer services, increased income from higher prices or re-labelled activity.
3.6 Efficiency statements will be audited by the external auditor against ‘quality cross checks’ to provide assurance to the Government that the quality of the service delivery is maintained. Feedback from the government on the backward looking Annual Efficiency Statement for 2004/05, has been received.
3.7 The efficiency statements form a key element of the Value for Money assessment of the Use of Resources part of the CPA assessment. From 2006 an overall score of 3 for Use of Resources (Out of 4 – a requirement of being a “Excellent” authority) can only be achieved if at least a score of 3 (out of 4) is achieved on the value for money assessment.
3.8 Efficiency areas for Local Government are categorised as follows;
· Corporate Services
· Productive Time
· Procurement including Construction
· Transactions
· Adult Social Care
· Children’s Services
· Culture and Sport
· Environment Services
· Local Authority Social Housing
· Local Transport
· Non-School Education Services
· Supporting People
3.9 Government is supporting this agenda by the production of detailed guidance. It has also created Regional Centres of Excellence (CoE) which are intended to be the lead change agent organisation. The council has established and is developing it’s links with the CoE. Currently Poole are members of a task group relating to procurement.
3.10 The CoE has collated the 2005/6 Annual Efficiency Statements for council’s in the south west .These indicate some £100m of identified efficiencies 75% of which are cashable and 25% non-cashable. The top three areas identified for savings are Adult Social Services, Corporate Services and Children’s Services.
3.11 The Government’s efficiency targets creates real challenges for the Council. The Council receives a low grant settlement from Government, raises comparatively low tax levels compared to near neighbours and produces generally good services. A Council’s starting point plays no part in the consideration of efficiency which is based upon budgeted expenditure for 2004/5.
3.12 However, the desire to deliver quality services at affordable cost lies at the heart of the Council’s aspirations for the town. Achieving or exceeding the Government’s targets will be challenging and requires innovation, prioritisation, leadership, focus and determination. Given those qualities, targets are achievable
4. DEVELOPMENTS/GOVERNANCE
4.1 As indicated in 5 April 2005 report to Cabinet, a Policy Director leads on the strategic response to achieving the efficiency gains required by the Council.
4.2 A Working Group of Service Unit Heads has been formed to support this work. Chaired by a Policy Director, the Group comprises:
· Head of Financial Services
· Head of Transportation Services
· Head of Housing and Community Services
· Head of Environmental and Consumer Protection Services
· Head of School Advice and Support Services
· Head of Adult Social Services (Commissioning)
· Chief Executive, Poole Housing Partnership
· Head of Personnel and Training Services (Representative)
4.3 The Group will:
· Develop a robust strategy to deliver the required efficiencies.
· Advise upon and support implementation of the strategy.
· Test the effectiveness of the strategy in delivery terms.
· Advise and support any identified development or adjustment of the Strategy.
4.4 The initiative will be championed at the political level by the Leader of the Council supported by the Portfolio Holder-Resources and Cabinet will receive reports.
5. ORGANISATIONAL IMPLICATIONS
5.1 It is proposed that the Council adopt a horizontal and vertical orientated organisational approach to the efficiency process.
5.1.1 Horizontal
5.1.2 Identified efficiency processes will be amalgamated into the Corporate Business Planning Framework and be obligatory upon all service units. The current review of the business planning process will produce a coherent process that incorporates budget development, business planning, performance management, efficiency, value for money and other requirements into a single phased process. This process will begin it’s cycle in September and support the Council budget setting process.
5.1.3 Service Unit Business Plans will be exposed to a vigorous examination process through their development. This examination will clearly define the responsibilities of Service Unit Heads, Policy Directors and Portfolio Holders.
5.1.4 It will be the responsibility of Service Unit Heads to ensure that the service specific advice developed by Government Departments is applied to efficiency measurement. Planned efficiencies will be taken into account when budgets are set.
5.1.5 Efficiency requirements for specific service area’s will be identified annually in the Medium Term Financial Plan.
5.2 Vertical
5.2.1 Analytical processes will be developed to identify service elements, services, procured goods and services that have the potential to offer the greatest efficiencies. These areas will be prioritised for more detailed evaluation and examination.
5.2.2 The evaluation, examination and development of any potential options and action plans will be supported by officers from Financial Services. From time to time other support will be provided as required. Any additional financial implications of this activity will need to be considered during the budget development process
5.3 Cultural
5.3.1 The Council will develop it’s overall operating processes in a manner that encourages innovation and develops a more businesslike approach to it’s decision-making and general management practices. This will involve several measures:
· An examination of the rules based systems to ensure that the framework does not restrict innovation, adopts a balanced approach to risk in all it’s forms and encourages an efficiency culture to develop.
· Expose key officers to business based culture possibly by developing joint training opportunities with the private sector and short-term secondment placements.
· Develop shared events with potential public and private sector partners.
· Recognise and celebrate “efficiency” initiatives.
6. ACTION CURRENTLY BEING UNDERTAKEN
· Externalisation of aspects of Adult Social Services is being explored
· Leisure Centre Management private partnership
· Customers First
· Improved waste processing methods
· Reduction of homeless households in bed & breakfast
· Electronic government
· Merging of Financial Services and Revenue and Benefits
· Examination of the business case for service provision via strategic partnerships e.g. Building Consultancy Services.
· Joint commissioning of services e.g. some elements of Transportation Services.
7. CORPORATE PROCUREMENT
7.1 The Council expends some £76-80m in purchasing goods and services per annum. In doing so approximately 75,000 invoices are produced that subsequently require processing and matching to purchasing requisitions. The Corporate Procurement Strategy recently endorsed by Cabinet outlines a number of actions in this area, some of which are underway, including:
(i) Review procedures and practices to significantly reduce administration of the purchasing/payment process in particular by reducing significantly invoice numbers.
(ii) Robustly seek partnerships that will increase purchasing power with a view to reducing unit costs.
(iii) Where justified, integrate goods/services procurement on a corporate basis and introduce clear and transparent responsibility for achieving best value for those products or services e.g. utilities.
(iv) Set targets for the reduction in unit costs for specific goods and services with clear lines of responsibility.
(v) If necessary, realign and refocus the procurement policy to support this strategy.
(vi) If necessary, realign financial regulations/standing orders to support greater innovation and negotiation in supply matters whilst protecting the integrity and probity of the process via a targeted and risk-managed audit process.
(vii) To identify, prioritise and schedule “efficiency“ evaluations by goods and services where the greatest benefits are likely to be achieved, such assessment based upon value for money comparators, market intelligence, collated data and other means.
8. CORPORATE SERVICES
8.1 The Council expends in the region of £20m on corporate service annually. This expenditure includes large elements of Financial Services, Personnel and Training Services, Democratic and Legal Services, ICT and Business Support Services, Communication and Tourism Services, Property Services and elements of Strategic Planning Services and Revenue and Benefits.
8.2 National and Regional indications are that the majority of Councils are planning to generate significant elements of their efficiency targets from this area. This is particularly true of what are regarded as back office functions. The Council will:
· Critically examine corporate services to identify opportunities for efficiencies including structural elements.
· Improve processes to develop single data handling capability process with a view to reducing the overall number of transactions required internally e.g. car mileage, overtime claims.
· Identify service or service elements where external partnership working or outsourcing would be likely to deliver efficiencies.
· Endorse the partnership approach where appropriate and mandate the joint development and evaluation of the business case.
· Actively seek collaborations from any sector where efficiencies are a probable result of joint working including joint provision of services if appropriate.
9. ASSET UTILISATION
9.1 The Council has extensive capital assets ranging from freehold interest in retail facilities through beach huts for rent to infrastructure vital for service delivery such as public conveniences. We will:
· Conduct an appraisal of current asset usage with a view to developing a robust asset management strategy including, where appropriate, asset disposal.
9.2 The council occupies significant office accommodation. There is a mix of freehold ownership and premises occupied under commercial lease arrangements.
· The council will critically examine it’s office accommodation needs with a view to achieving a reduction in the total requirement. This will be achieved by several methods to include evaluation and implementation of home working, hot desking where appropriate, and a concerted drive towards Electronic Document Management.
· The council will seek to minimise it’s use of leased premises where this reduces overall costs.
· Electronic service delivery and support methodologies will be optimised.
10. PARTNERSHIP WORKING/COLLABORATIVE SERVICE PROVISION
10.1 Some examples of partnership working in the form of joint procurement and joint commissioning currently exist. These examples of best practices serve to demonstrate both the feasibility and potential benefits of this approach. However current activity merely scratches the surface of the overall organisational processes. A significant acceleration of this work is required on a wider and deeper basis.
10.2 To assist this process an event is being planned that will bring together key players in potential partner organisations. The event will examine and identify opportunities where a partnered approach offers potential benefits. It will articulate the perceived barriers to such working and seek to create a shortlist of services for detailed business case assessment.
10.3 The event will major on corporate /back office services with a selection of front line delivery services where identified potential exists. The event is to be supported and facilitated by the CoE who will draw upon examples of best practice and expertise from the south west and through the national framework where required.
10.4 Bournemouth represent an obvious potential partner and have agreed to support the event. Other organisations from the public sector will be represented where a service match to the topic areas exists. Additionally some key private sector organisations will be invited.
11. CORPORATE PLANNING.
11.1 For any organisation to be regarded as efficient it must clearly articulate it’s objectives, the resources to be used to achieve those objectives , how meeting the objectives will be measures and the targets which are to be achieved.
11.2 Poole’s Corporate Strategy is currently articulated in Striving For Excellence. This document is supported by a series of others including the Capital Strategy and the Medium Term Financial Plan.
11.3 It is proposed that these elements be brought together in a single coherent comprehensive “Corporate Plan”. A draft framework for such a document is attached at Appendix 1. If agreed it is intended that the framework be populated by the inclusion of the relevant existing documents with any inclusions or modifications added as they are developed. Such development would coincide with the review of Striving For Excellence.
12. HUMAN RESOURCES
12.1 The requirements placed upon the authority by this government initiative are significant and challenging. Clearly there are potential implications for individual employees and groups of employees. It will be important to ensure that communications with the workforce regarding the progress of this initiative is timely and open. Trade Union representatives will be briefed at appropriate times and any proposals will be subject to agreed trade union consultation processes.