Meeting documents
- Meeting of Finance, Performance and Resources Select Committee, Thursday 25th July 2013 10.00 am (Item 6.)
Nick Cave will update the Committee on Phase 2 of the Council’s Transformation Programme.
Minutes:
The Chairman welcomed Peter Hardy, Cabinet Member for Finance & Resources and Nick Cave, Service Director for Service Transformation, and explained that quarterly updates would be provided to the Committee. Members were advised that Phase 2 of the Council’s Transformation programme was being developed to achieve savings (£10m of the £45m total planned savings over the MTP period), and to make the Council better equipped to meet future challenges. A key aspect of Phase 2 was the development and implementation of a Target Operating Model (TOM) which sets out the future shape of the organisation. Nick Cave made the following points:
· The proposal was that there will be a leaner Head Office function.
· Members are at the heart of what they are trying to do.
· It was acknowledged that there was a very challenging agenda and that reducing costs will be difficult.
· Ideas and comments that members have about the TOM and how to reduce costs would be very welcome.
Members were invited to ask questions and the following points were raised:
· It was noted that a new approach was being proposed and with the benefit of hindsight what could have been done differently in Phase 1 and why.
· Nick replied that the action taken previously was a reaction to austerity measures and that in Phase 1 there had been limited vision for the future shape of the council. Tactical compartmentalised changes have aligned activities towards a vision going forward which enables people to get on board with the changes and understand the direction of travel to match the Target Operating Model (TOM).
· The Cabinet Member explained that previously business and process re-engineering took place, and that Phase 2 was about proposing a different shape for the council.
· The Member asked if the approach to tactical changes will be revisited in future.
· Nick replied that changes will be aligned to the TOM, the IT structure will be reviewed and consideration will be given to what will fit with TOM. Another question was whether SAP will still be required with a smaller operating unit.
· The Cabinet Member added that there will be a review to establish if corporate IT provides the best value.
· A Member expressed concern that as there was no plan until the end of Phase 1 what will be so different about Phase 2 and what benchmarking will take place to establish how much the operating model will save.
· The Cabinet Member replied that Phase 1 consisted of one cut after another and that the aim was that there will be more opportunities for employees.
· It was noted that plans were in place to make savings and that £65m has been taken out of the business. In Phase 2 the aim was that the TOM will provide staff with different opportunities and that help and guidance will be available to them through the process.
· It was noted that there were no plans for the future for staff and that a holistic approach was now being adopted.
· Nick replied that lessons had been learnt from previous plans.
· A Member noted that there had been a reference to outsourcing and that a small, lean corporate centre was considered to be a logical step forward and he recalled that IT had been reorganised approximately 2 years ago and kept in-house. He asked if the service will be radically reorganised.
· Nick replied that outsourcing had been considered and that in the new model there will be some outsourcing.
· The Cabinet Member added that IT must provide a competitive service in terms of quality and cost.
· A Member asked how the £10m target based saving was arrived at and why was it not £9m or £11m.
· Members were advised that £10m was set for transformation as part of BCC’s MTP before the CSR announcement.
· The Cabinet Member asked how the £21m transformation target was reached several years ago.
· A Member replied that this was the best professional advice at the time.
· The Cabinet Member explained that there was a £10m problem.
· The Member referred to the suggestion that SAP may no longer be appropriate and he recalled that SAP was very expensive at the time it was purchased but provided a Rolls Royce service.
· Nick replied that SAP was an appropriate ICT solution for a large organisation.
· The Member asked if the view could be that the multi- million pound investment on SAP was wasted.
· Nick replied that SAP may no longer be necessary because the new corporate HQ may have smaller facilities.
· The member asked if given the £20m gap to being self-sufficient over and above planned savings, was there scope to make further savings.
· Nick explained that this would involve difficult decisions about the transfer of services and the risks involved.
· The Cabinet Member explained that there was a need both to continue to save and simultaneously to generate money. He referred to a presentation given recently by himself and Gillian Hibberd at which some council’s wanted to offer services whilst others wanted to provide a service for others. The Local Area trading Company (LATC) and Bucks Learning Trust (BLT) were examples of the move towards this. In his opinion BCC could not be sustained just by making cuts but must also generate more income.
· A Member asked what could be learnt from other Local Authorities.
· Members were advised that the work of Oldham Council has been examined and a review has taken place as to how Serco have organised themselves.
· Another Member asked what programmes were in place to accommodate selling of services, if the skills of the contract managers’ skills contract management skills had improved and if a sales workforce will be recruited.
· The Cabinet Member acknowledged that there was a need to be more commercial.
· Nick added that a commercial skills programme was in place and that the CEO of BLT was from a commercial background. He considered that there was a great opportunity and that it was necessary to actively work to exploit it.
· A Member asked for an explanation of the Governance structure.
· Nick replied that the Chief Officers Management Team (COMT) was the main board and that there were officers who would be regularly reporting on a quarterly basis.
· In response to a question asking for a reassurance that the governance was correct members were advised that COMT and the Transformation Team would be used as a vehicle to ensure that this was the case.
· With reference to the suggestion that there would be a leaner organisation a Member asked if the best delivery vehicle had been explored and achieved.
· The Cabinet Member agreed that BCC has to get the right model in each case.
· Nick added that examples of various options being explored were the BLT and the creation of a Museum Trust.
· A Member asked for an explanation of what radical options were being discussed and he suggested the creation of a unitary authority.
· The Cabinet Member replied that the Cabinet’s policy is to wait for any decisions on unitary status coming from Central Government which will not be before the general election in 2015. He added that the LGA is giving consideration to bringing health and education authorities together although this would reduce the Central Government Cabinet by approximately 60 Members.
· Nick Cave explained that COMT did not discuss unitary options but looked at partnerships for between health and adult social care, example with Oxfordshire County Council and worked with the districts on waste.
· A Member asked how Transformation will help move the programme forward.
· Nick explained that the aim was to create a HQ function, move towards creating independent delivery vehicles as soon as possible and to put an operating framework in place.
· In response to a question it was noted that the effect of this on members was that there will be more member involvement in bringing residents needs into the different delivery vehicles.
· The Cabinet Member added that the members should always have taken the views of the residents into consideration and set the priorities accordingly.
· A Member asked whether the same quality of service will be delivered.
· The Cabinet Member replied that the quality of service will be improved because the right delivery vehicle will be in place.
· A Member agreed that members were central to the process and he added that the staff were equally important and he asked if the management team understood this. There was a request for feedback either positive or negative on what has been done and the goals.
· Nick replied that the feedback was mixed and that some staff embraced the change whilst others had not. It was noted that 500 staff had already left the County Council and acknowledged that it was important that staff understood the direction of travel. The message was difficult to communicate because there was a fear of threat.
· A Member asked how confident the officers were that the staff will buy into the changes.
· Nick referred to previous initiatives such as the BLT and noted that some staff have embraced the changes and flourished whilst others have left.
· The Cabinet Member supported the comment emphasising the importance of selling the new approach as being positive.
· Has the leadership team identified the non-priority areas where the staff could be reduced or would be no longer required?
· The Cabinet Member replied that the recommendations have been reviewed and the core elements in the HQ model will be considered before a decision is taken.
· A Member asked if a government grant was received must it be repaid if it is not all spent.
· This was dependent on whether or not the money was ring fenced.
· The Cabinet Member confirmed that the £10m was revenue budget and that a holistic approach was required.
· If there was a change in statutory duties there will be break clauses in the contract.
· A Member asked what type of report will be available at the meeting in December 2013.
· Nick replied there will be a clear map identifying key blocks of change, an understanding of the phases and how they planned out. Quarterly updates will be provided subsequently.
· A Member noted that in Phase 1 there was massive slippage and that it was necessary to catch up in the final year. He asked if there will be no use of consultants. The Cabinet Member replied that consultants will always be used.
· It was noted that consultants were currently being used for the external challenge and to help deliver the programme.
Supporting documents: