Local Authority Business Transformation Saves Up To £13 million for Council Tax Payers
Monday 9th June 2008, Tewkesbury, Gloucestershire, United Kingdom – Whilst talking with directors in local authorities, IMS Executive became increasingly aware that business transformation was being applied very differently from one local authority to another. As specialist management consultants, they were curious. Following the outcome of the 2007 Comprehensive Spending Review (CSR07) and the aim to minimise council tax increases with measurable targets of 3% savings annually, IMS Executive commissioned independent research. The research highlighted annual cost savings between £500,000 to £13 million achieved through smart procurement and service redesign aimed at benefitting those who pay council tax.
20% of local authorities responded, which is very high, so the research has delivered a comprehensive and in-depth picture of business transformation in the public sector, with several notable case studies. The research uncovered key findings:
• 43% of authorities have been running business transformation programmes for more than one year, with 37% running them for less than a year
• Estimated annual savings are relatively evenly spread but 30% of respondents expect to save between £500,000 and £3 million, with 13% saving over £10 million.
• 68% of respondents have engaged management consultants as Transformation Partners
• 34% were unaware of the DCLG’s business improvement programme
• The biggest cost savings were made by larger authorities who are better resourced
Most local authorities viewed CSR07 and efficiency targets as a negative burden – either because they perceive themselves to be very efficient already and resent the additional government targets, or they consider stiffer targets will result in cuts to already pressed services.
Many of the detailed and ordered responses came from the larger metropolitan, city and county councils. The larger local authorities were more likely to have clearly structured programmes, the ability to drive efficiency through economies of scale, purchasing / commissioning power, HR capital and assets.
Smaller local authorities stated difficulties accessing forward funding / pump priming resources to encourage and generate efficiencies. Many District Councils cited lack of capacity as delaying their ‘transformation’ although in many cases it was clear the commitment existed to drive change. Consequently the majority of advanced efficiency programmes are being delivered by larger local authorities.
Research confirmed no two local authorities start from the same place or have the same objectives so ‘one size of business transformation does not fit all’. The report features case studies including:
• Glasgow City Council expects £13 million annual savings after it redesigned 200 business processes and replaced 200 legacy ICT applications with a SAP-based system to deliver a joined up service approach.
• Peterborough City Council (£3.5m embedded savings in the first year)
• Walsall Metropolitan Borough Council (£1.4m embedded savings in the first year)
• East Lancashire Procurement pooled the resources of 5 district councils and reduced the cost of a basket of 145 purchased items by 60%
• Welwyn Hatfield District Council’s focus on IT asset management has delivered a 10% annual budget saving
According to Bristol County Council’s Director of Business Transformation, Ian Crawley ‘We need to understand the true potential for transformational change and the best ways of achieving it. We can all benefit from sharing our experiences more within and outside the local government family about successful transformation. This study is a very useful contribution to the continuous journey that we are all on, of learning how to deliver better services at lower cost.’
IMS provides interim managers and consultancy and has been working with the public sector for six years. Operations Director Neil Fogarty comments, ‘Clear political leadership and objective setting, coupled with good project and change management are keys to success – the more focussed the targets, the more likely the council is to deliver both efficiency savings and performance improvement.’
An advocate of knowledge sharing, IMS is active in effecting information exchange between local authorities as a way to propagate new thought and innovation. This report is available to senior executives in local authorities who contact email@example.com and Neil says, ‘The lack of capacity in smaller councils means the majority of advanced efficiency programmes are being delivered by larger local authorities but it is important that all local authorities benefit from the great work being done by so many.’
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Rhona Jack MIPR
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About IMS Executive Ltd
IMS Executive Ltd. is a business advisory organisation comprising Interim Management and Management Consultancy, with headquarters near Tewkesbury, Gloucestershire, and an office in London. It was established in 1993 and has over 4,000 interim executives and independent consultants in its Executive Network. Turnover is now £3 million annually. IMS Executive has an ISO 9001 accredited Quality Management System for the supply of Interim Executives and Management Consultancy.
Previously, Managing Director Chris Benbow was an interim executive, and a director in the NHS and in the construction sector.
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