AGENDA ITEM: 5 Meeting Date Subject Report of Summary

Page nos. 1 58

Cabinet 6 July 2009 Future shape of the Council Leader of the Council
The Future Shape of the Council Programme commenced in May 2008 and concluded its first phase in December of the same year. This is the first report to members under Phase 2. It responds to the feedback received with regard to the Phase 1 report and sets out the overall direction for the programme. A final report on Phase 2 will be forthcoming in October 2009.

Officer Contributors

Nick Walkley, Chief Executive; Max Wide, Executive Director, Organisational Development; Siobhan Haugh, Programme Manager; Hester Fairgrieve, Research & Programme Manager Public All Appendix 1 Future Shape of the Council: Interim Report Cabinet Executive Not Applicable

Status (public or exempt) Wards affected Enclosures For decision by Function of Reason for urgency / exemption from call-in (if appropriate)

Contact for further information: Max Wide, Executive Director, Organisational Development (Email: max.wide@barnet.gov.uk)

1. 1.1

RECOMMENDATIONS That the following three aims be adopted as the strategic basis for making future decisions: o o o A new relationship for citizens; A one public sector approach; A relentless drive for efficiency.

These aims will be used to inform the 2010/11 budget process, the refresh of the Sustainable Community Strategy, the development and delivery of the Corporate Plan and our relationship with partner organisations. 1.2 That a phased approach to delivering the Future Shape Programme is adopted which is based on the three stages of consolidate, commission and provide. That the immediate consolidation of activity in the areas of property, support and transact are endorsed. Specifically that the following are agreed to: a. Strengthen the governance arrangements for strategic property decision making and redesign the corporate client function, creating a central single property unit for estate, capital projects and facilities management. An accelerated programme of consolidation of support functions into one centralised unit. Consolidate the front office into one Customer Service Organisation Take forward the Transact proposals for delivering efficiencies and improved outcomes by grouping services initially through internal reorganisation and then developing business cases for alternative forms of provision. Extended work on understanding the community needs and skills necessary to commission improved services by developing a shared intelligence function with partners. This work will inform future recommendations arising from the Future Shape Programme.

1.3

b. c. d.

e.

1.4 1.5

That the immediate and ongoing staff engagement and consultation on the change programme are approved. That the production of an organisational development strategy for achieving the programmes outcomes is endorsed. This will be brought to Cabinet in October 2009. RELEVANT PREVIOUS DECISIONS Cabinet agreed the establishment of the Future Shape of the Organisation programme at its meeting on 6 May 2008 (decision item 5).

2. 2.1

2.2

Cabinet agreed the programme structure for the next phase of the future shape programme and that a detailed assessment of the overall model for public service commissioning, design and delivery be undertaken at its meeting on 3 December 2008 (decision item 5). CORPORATE PRIORITIES AND POLICY CONSIDERATIONS The Corporate Plan 2009 2010 states that: Efficiency has always been important to us but when there is even less to go around we have to squeeze all the value we can out of taxpayers money. We will focus relentlessly on the efficiency of what we do to ensure we deliver ever increasing value for money. The proposals made in this report will assist the council in meeting all the outcome objectives outlined in the Corporate Plan. Policy considerations are set out in more detail in section 9 of the appended report. RISK MANAGEMENT ISSUES Quality of life in Barnet: In a challenging economic climate the council faces a number of issues for which it will not be fully prepared if it fails to implement the recommendations outlined in this report. Maintaining current ways of working through the current delivery model is not financially feasible in the long term. Currently Barnet is a three star authority but in order to meet the complex challenges of the current and future contexts, the council needs to develop a different, more sophisticated and joined up approach to ensure that the quality of services delivered to Barnet citizens does not suffer as funding across the public sector inevitably reduces. Utilising the power and the benefits of partnership working and facilitating citizen self-help through behaviour change as outlined in this report will do much to ensure this. Strategic leadership: The council and its partners will need to develop stronger alliances and at a strategic level adopt a pan-public sector one Barnet approach to citizens in order to achieve the strategic leadership and re-configuration of services required. Closer ways of working with Local Strategic Partnership (LSP) partners as recommended in this report will allow the council to commission better outcomes for its citizens based on a shared understanding of peoples needs and priorities across the borough. High quality service delivery: With the potential for more services delivered by organisations other than the council, there is a need to develop strong alliance management skills and build on the Councils effective performance management systems to ensure it has leverage across a network of providers. In addition and as outlined in detail in the appended Future Shape: Interim Report, the procurement of certain special purpose vehicles could enable the council to bring in significant expertise in areas where management and structures are complex, thereby reducing significantly the level of risk to the Council and enhancing its existing skills and systems

3. 3.1

3.2

3.3

4. 4.1

4.2

4.3

4.4

Member-service user relationships Casework could become more complex in the proposed model and the council would need to provide support for Members in navigating the system of service provision. Also, the role of ward councillors as advocates and other elements of community engagement would need to be strengthened. Procurement and contracting skills: Poor procurement and contracting skills as well as leadership capacity constraints in the council could limit the ability to obtain the desired efficiencies and service improvements. Key future shape activities would include focused work to develop the councils contracting and procurement expertise as well as the development and implementation of a public sector leadership development programme directly to address and mitigate these risks. A full risk log with mitigating action is contained in the appended report. EQUALITIES AND DIVERSITY ISSUES The 2009/10 Corporate Plan states that the council has a strong strategic commitment to making equalities and diversity integral to everything it does The proposals in this report aim to improve the Councils capacity to understand the changing nature of Barnets population and to develop responses that ensure that all sections of the community are served and involved by the public sector in Barnet. The proposals will aim to enhance Barnets reputation as a good place to work and live. The business cases developed will specifically look at equalities and diversity issues to assure the Council that there will be no differential service outcomes for different communities. Delivery of any proposed new services or functions will also aim to increase satisfaction ratings amongst different groups of residents. If, as a result of the business case development, Council employees transfer to another employer, the usual procedures ensuring equality of treatment will apply. USE OF RESOURCES IMPLICATIONS (Finance, Procurement, Performance & Value for Money, Staffing, IT, Property, Sustainability) Finance: Cabinet over the past year has very clearly communicated the importance of achieving significant savings through the Future Shape Programme. This is in recognition of the fact that poor grant settlements have been received in recent years and significant efficiency savings have already been achieved through traditional budgeting measures (a total of 81m efficiencies, increased income and savings having been budgeted for over a seven year period).

4.5

4.6 5. 5.1

5.2

5.3

5.4

6.

6.1

The Future Shape report identifies three phases:- (i) consolidate to achieve further savings in the short term; (ii) commission to establish community needs, develop required skills, and begin commissioning new service delivery arrangements; and (iii) provide improvements managing new alliances and delivering on these new service delivery arrangements. Financial implications are assessed over these three stages. Phase 1: Consolidate Although Support, Property and Transact Groups are progressing faster, consolidation can still be considered beyond these areas. PwC consider that consolidation for property and support could yield up to 4.7m. This work can proceed immediately as it does not require any external procurement, and if a substantial efficiency saving can be achieved it can contribute significantly to the 2010/11 resource gap identified in the Financial Forward Plan considered by Council in March 2009. Alternatively, or in addition, a proportion of these savings can be earmarked as a budget for the establishment of the project resource to deliver consolidation and other Future Shape implementation activities. Phase 2: Commission PricewaterhouseCoopers (PwC) initial assessment of efficiencies suggests that between 8m and 16m will be achievable, incorporating savings achieved through the consolidation phase. These savings are based on around 20 other councils they are currently working with. These figures are gross savings they exclude the cost of delivering these efficiencies, which PwC estimate to be in the region of 1m to 2m. Delivery costs are substantially less than the one-off benchmark costs in other councils because the benchmark costs for other councils include substantial investment in IT, which Barnet has already largely undertaken. The fact that the benchmark councils have not undertaken this investment raises a concern that the upper range of savings PwC believe is achievable (16m) may be beyond our reach, given that our IT investment has been in place for some time now and has been a contributing factor in the efficiency savings already delivered in Barnet. It is essential, therefore, that the next phase of the Future Shape Programme delivers robust business cases that drill down through the PwC analysis and incorporate market testing, leading to realistic savings targets being identified alongside realistic delivery costs. Phase 3: Provide Improvements There are a range of financial implications and risks associated with Phase 3, which this section of the report sets out, but it is imperative that these are taken fully into account in the commissioning phase to ensure that any financial imperatives (e.g. budget savings) are delivered and that minimisation of financial risks forms an integral part of the design of future service delivery.

These are: the level of savings to be achieved, or more importantly the scope to continue delivering new savings year on year business continuity risk, and the financial implications of a disruption in critical services being delivered from outside the council the scope already mentioned to generate income from trading within new service delivery arrangements. the risk of financial control failures within key business processes when services are not directly managed within the council. two of the largest services within the council are local taxation and benefits, collecting 255m in income, making 187m in payments, and claiming 185m in subsidy every year. As these have a significant impact on council finances, any proposals for these services that emerge from the Transact Group need to be extremely carefully risk assessed. Other Considerations Any new arrangements which lead to a reduction in the directly employed council workforce may have implications for the Pension Fund, which will need to be assessed. The Property Group raises questions about the extent of the councils ability to ensure all its assets are employed to best use in serving the community. The biggest proportion of the councils estate is schools; consideration needs to be given to opening up a dialogue with schools about wider community benefits that can be achieved from these assets. There a large number of contracts for goods, works and services re-tendered every year. Many of these will come within the scope of Future Shape, so decisions will need to be taken on an ongoing basis on whether contracts due for re-tendering from this point on should be deferred, resulting in potentially a large number of waivers of Contract Standing Orders being required to extend existing contracts for a time. The council may need to invest in enhanced contract monitoring arrangements. 6.2 Procurement: External advice will be required to develop the business cases proposed for the next phase of the programme. Staff: There are likely to be implications for staff as the programme moves into the later stages. However, there will be close consultation with HR, unions and staff in all instances where staff are likely to be affected. If there was future movement of staff from the council to joint ventures and other vehicles, TUPE would apply, and the Council has signed up in principle to the Code of Practice on Workforce Matters. It is proposed that a people workstream is created and an organisational development programme established. This will help to ensure that the initial directions proposed by the groups can be developed to achieve the savings and improvements identified

6.3

6.4

IT: The future provision of IT has been reviewed as part of the future shape programme and it is recommended that the service forms part of any new delivery model for support services. This recommendation is subject to a full business case being developed which explores the identified delivery options. As part of this business case, the Council will need to decide whether to retain ownership of the IT infrastructure in the future model. The contract for the Councils current managed IT service has been extended for a two year period and is due to expire in July 2010. Property: Property has been reviewed as part of the future shape programme. Savings have been identified from consolidating fragmented property teams, standardising processes and eliminating duplication and from a new sourcing model, with improved contract and supplier management. Working with commercial and strategic partners will have an impact on our office accommodation requirements, resulting in fewer operational buildings, more co-location and more customer orientated facilities. These benefits will be realised across the estate of the Council and its strategic partners. However, until detailed business cases are developed it is not possible to estimate the exact impact. Performance and value for money: Business cases will be developed to explore the identified options. The recommended option will be the one which offers value for money for the Council and Barnets citizens and customers. Risk to performance will be considered as part of the business case development. LEGAL ISSUES The Local Government Act 2000 (the LGA 2000) introduced a power which permits a local authority to do anything which it considers likely to promote or improve the economic, social or environmental well-being of their area" (the well-being power). There are a number of restrictions which are attached to the use of the well-being power set out in section 3 of the LGA 2000, the most relevant of which are: the well-being power cannot be used to raise money; and the well-being power cannot be used to "circumvent prohibitions, restrictions or limitations contained on the face of legislation".

6.5

6.6

7. 7.1

7.2

The use of the well-being power has been subject to scrutiny by the courts in the Risk Management Partners Limited v London Borough of Brent and the London Authorities Mutual Limited (LAML2) case. This particular case considered the ability of local authorities to enter into partnerships, adopt arrangements for shared services, and/or form joint ventures, and the extent to which the well-being power may be relied upon for contracting arrangements to promote or improve the economic, social or environmental well-being of the area. The judgement itself confirms that the well-being powers are very wide and have been designed to be so. However, the judge

did find that the financial well being of a local authority itself was not the same as the economic, social or environmental well-being of its area. That judgement was very recently the subject of an unsuccessful appeal. The Court of Appeal confirmed in a judgement given on 9 June 2009 that the wellbeing power does not allow local authorities to embark upon schemes that are just about reducing costs. Saving costs of itself without having the object of using the savings for an identified purpose to promote or improve well-being is not within the scope of the power. 7.3 As confirmed by the LAML2 judgement, the Council, should it seek to exercise the well being power at a future date, must have regard at that time to the provisions of its Sustainable Community Strategy and show that there is sufficient nexus between the Sustainable Community Strategy's aims and the intended outcomes of the transaction it enters into. Therefore, if the Council wishes to rely on the well-being power to implement different delivery vehicles or instruments, the Council's Sustainable Community Strategy prepared under section 4 of the LGA 2000 will need to have been revised to contemplate this. 7.4 The LAML2 case demonstrates that frequently there are complex legal issues pertaining to a local authoritys powers to participate in joint venture, shared service and/or trading operations. The details of each arrangement will always be critical and require separate legal analysis of the specific circumstances, the statutory powers under which the activity will be carried out, relevant statutory guidance, the link to the sustainable community strategy and the relationship between action and outcome. Therefore, prior to the development of any specific proposals, further consideration and advice will be given as described and specifically upon the legal implications for the exercise of the well-being provisions consequent upon the Court of Appeals very recent judgement referred to above and the use of other statutory powers which may facilitate the Councils participation in different mechanisms for service delivery including Section 111 of the Local Government Act 1972; Section 70 of the Deregulation and Contracting Out Act 1994; Section 3 of the Local Government Act 1999 and Section 95 of the Local Government Act 2003. Such legal consideration and advice will accompany each and every recommendation for alternative arrangements for service delivery. 8. 8.1 CONSTITUTIONAL POWERS Constitution, Part 3 Responsibility for Functions - Section 3 Responsibilities of the Executive. BACKGROUND INFORMATION The Cabinet initiated the Future Shape Programme in response to a challenging set of changes in Barnets operating environment. These included a changing national policy context, a changing Barnet, declining grant settlements, static public satisfaction and intractable problems where public expenditure seemed to have little effect.

9 9.1

9.2

The global economic recession and satisfaction levels with local government overall make it even more important that the Council addresses the challenges of the future. The appended report (phase 2) is an interim report which incorporates the feedback received from the initial scoping of the Future Shape Programme which formed phase 1 between May and December 2008. It proposes a high level direction, supported by a number of work streams that will enable the Council to work with its partners to help the people of Barnet to achieve the outcomes that matter to them within a significantly constrained public funding settlement. Barnet Council has enjoyed substantial success in recent years; it has proved in the past that it knows how to make fundamental changes. Looking ahead it will need to be prepared to change again if it is to reduce costs, increase satisfaction, enhance the prosperity of the area and help to build a more responsible active society. To meet the challenges of the future, the findings of the interim phase indicate that the Council should adopt three aims across all of its activity to inform all of its work in the future: 1. A new relationship with citizens In which citizens will have a much greater involvement in designing services and actively participating in improving their lives and Barnet. 2. A one public sector approach In which our strategies and services and those of our public sector partners are integrated and aligned, so that we can work together to improve outcomes for people in Barnet. An important aspect will be placing democratic accountability at the heart of it all. 3. A relentless drive for efficiency In which the Council plays a leading role in ensuring that public services as a whole are as efficient as they can be.

9.3

9.4

9.5

To achieve these aims the Future Shape Programme needs to take a phased approach, building the skills and capacity to enable the Council to o o o consolidate its current position and deliver identified savings in the short-term develop the understanding of community needs and skills necessary to commission improved services manage the alliances we develop and ensure that they can provide improvements for the citizens and the area as a whole.

9.6

To achieve these objectives, Phase 2 of the Future Shape Programme has established a number of officer groups that having been working across the organisation and across partner organisations. Some of these are reporting findings now, with the remainder due to report in October 2009. These groups have set out to establish an evidence based approach to the changes needed.

9.7

The Property Group have found evidence that there are substantial opportunities available to the Council, arising from its ownership of a property portfolio worth in excess of 500m. By adopting leading practices in this area there is an opportunity to improve the way we manage our property. In the longer term, the Council of the future should, the group believes; explore the possibility of establishing a partnership with the private sector. Based on high level data and industry benchmarks there is an opportunity to realise between 1.4m and 2.4m gross cashable savings per annum, rising to between 2.5m and 4.9m cashable savings per annum through a partnership with leading private sector organisations partnership. The Support Group have found evidence that whilst progress has been made in recent years in the development of a centralised support services model, more could be done to consolidate outsourced services and devolved services in directorates. The Group have found evidence that, for the future, in-house improvement alone is not a sustainable option given the scale of the budget pressures and the opportunity to work more closely with partners. This could achieve up to 2.3m gross cashable savings per annum with the opportunity to improve on this, up to 4.4m per annum through partnership and potentially more through trading. The Transact Group have found that Council retains a substantial amount of in house provision compared to many other Authorities, and that there should be an ongoing debate as to whether, in the context of the changing role of local government, it can continue to do so. There is evidence that the exploration of alternative approaches to providing services in clusters, linked to specific outcomes, would be worthwhile and that this could deliver savings of between 4 and 5.8m per annum in addition to 0.4m - 1.1m per annum of income generation. The Access Group are due to report in October but are already identifying that the citizen experience in Barnet is frustrating owing to the fragmented nature of provision. Early data suggest that through consolidation of existing staff and systems, an improvement in the citizen experience could be accompanied by savings up to 2.3m per annum. The group are recommending that the bigger prize would be the establishment of a single customer services organisation including partners, to truly transform the service. The Assessment Group are due to report in October but have already identified that the citizen experience of the assessment process is very mixed; that there is considerable duplication in our current processes and there are potential savings, though a figure is not available at this time. The Group is exploring a number of themes including the establishment of a Barnet Assessment organisation to pull together staff from across the Council and partner organisations whose focus is on assessment. Reforming this area of work has huge potential for transforming the citizen experience and delivering significant savings. The Strategy Group are due to report in October but have already identified the need for much closer links and potentially integration between the Council

9.8

9.9

9.10

9.11

9.12

10

and partner organisations, to develop a joint view of needs and aspirations of people in the local area, to devise a common strategy and identify efficiencies.
9.13

The Vehicle Group are due to report in October but have already identified that a single vehicle for the delivery of all Council services, as was proposed previously, is not feasible. The group is developing a blueprint for the Councils approach to commissioning services in the future. It is clear that achieving the predicted savings and improvements will be a considerable organisational task, requiring the use of significant capacity and some new capabilities. Careful attention will need to be paid to the phasing of activity if the Council and its citizens are to reap the rewards being identified. The full interim report of the future shape report is contained in Appendix A. LIST OF BACKGROUND PAPERS Relevant background papers to this report are:

9.14

9.15

10.

10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8

Strategy Group Interim Report, June 2009 Vehicle Group Interim Report, June 2009 Support Group Report, June 2009 Property Group Report, June 2009 Transact Group Report, June 2009 Access Group Interim Report, June 2009 Assessment Group Interim Report, June 2009. Any person wishing to inspect these documents should telephone 020 8359 7011

Legal: JEL CFO: CM

11

A new relationship with citizens; A one public sector approach; A relentless drive for efficiency;

Future Shape Interim Report

12

Future Shape; Interim Report 1. Introduction

This is the first report under Phase 2 of the Future Shape Programme. Section 2, the executive summary, sets out the background of the Future Shape Programme and the main findings of the interim phase. This is followed by section 3 which explains the original drivers for the programme, changes that have occurred since its inception and the case for change. Section 46 set out the detailed findings to date and specifically the outcomes of the Transact, Property and Support Groups. The conclusions and recommendations arising from the interim phase of the Future Shape Programme are outlined in section 7.

2.
2.1 1.

Executive Summary
Background We started the development of the Future Shape Programme in response to a challenging set of changes in Barnets operating environment (phase 1). Feedback from the end of the first phase, in November 2008, from Members, partners and staff has been incorporated into this report. The global economic recession and satisfaction levels with local government overall make it even more important that we address the challenges of the future. This document (phase 2) is an interim report with a final report to follow in October, proposing a high level direction, supported by a number of work streams. The programme will enable the Council, working with its partners, to help the people of Barnet to achieve the outcomes that matter to them, within a significantly constrained public funding settlement. Barnet Council has enjoyed substantial success in recent years; it has proved in the past that it knows how to make fundamental changes and has both improved performance and made efficiencies. Barnet itself is a successful place with the vast majority of residents happy with it as a place to live. To continue to deliver this success. we believe that the Council will need to be prepared to change again if it is to reduce costs, increase satisfaction, enhance the prosperity of the area and help to build a more responsible and active society. Findings To meet the challenges of the future, the findings of the interim phase indicate that the Council should adopt three aims across all of its activity to inform all of its work in the future: 1. A new relationship with citizens In which citizens will have a much greater involvement in designing services and actively participating in improving their lives and contributing to a better Barnet. 2. A one public sector approach In which our strategies and services and those of our public sector partners are integrated and aligned, so that we can work together to improve outcomes for people in Barnet. An important aspect will be placing democratic accountability at the heart of the public sector. 3. A relentless drive for efficiency In which the Council plays a leading role in ensuring that public services as a whole are as efficient as they can be.

2.

2.2 3.

4.

To achieve these aims the Future Shape Programme needs to take a phased approach, building the skills and capacity to enable the Council to: o consolidate its current position and deliver identified savings in the short-term

13

o o 2.3 5.

develop the understanding of community needs and officer skills necessary to commission improved services manage the alliances we develop and ensure that they can provide improvements for the citizens and the area as a whole.

The Work of Phase 2 To achieve these objectives, Phase 2 of the Future Shape Programme has established a number of groups that having been working across the organisation and across partner organisations. Some of these are reporting findings now, with the remainder due to report in October 2009. These groups have set out to establish an evidence based approach to the changes needed. The groups work show that significant savings are possible, as set out below. Savings are on a gross, cashable basis. Some investment would be needed to deliver these savings early estimates suggest that 1m-2m investment would be needed across the first two years to deliver the savings identified for the three strands identified below. The aim would be to use savings generated in the early phases of the work, built on consolidating and improving existing provision, to fund investment. The Property Group have found evidence that there are substantial value for money opportunities available to the Council, arising from its ownership of a property portfolio worth in excess of 500m. By adopting leading practices in this area there is an opportunity to improve the way we manage our property. In the longer term, the Council of the future should, the group believes, explore the possibility of establishing a partnership with the private sector. Based on high level data and industry benchmarks there is an opportunity to realise between 1.4m and 2.4m gross cashable savings per annum, rising to between 2.5m and 4.9m cashable savings per annum through a partnership with leading private sector organisations partnership. The Support Group have found evidence that whilst progress has been made in recent years in the development of a centralised support services model, more could be done to consolidate outsourced services and devolved services in directorates to deliver better services and better value for money. The Group have found evidence that, for the future, in-house improvement alone is not a sustainable option given the scale of the budget pressures and the opportunity to work more closely with partners. This could achieve up to 2.3m gross cashable savings per annum with the opportunity to improve on this, up to 4.4m per annum through partnership and potentially more through trading. The Transact Group have found that the Council retains a substantial amount of in house provision compared to many other Authorities, and that there should be an ongoing debate as to whether, in the current and future operating context, it can continue to do so. There is evidence that the exploration of alternative approaches to providing services in clusters, linked to specific outcomes, would be worthwhile and that this could deliver savings of between 4 and 5.8m per annum in addition to 0.4m 1.1m per annum of income generation. The Access Group are due to report in October but are already identifying that the citizen experience in Barnet is frustrating owing to the fragmented nature of provision. Early data suggest that through consolidation of existing staff and systems, an improvement in the citizen experience could be accompanied by savings up to 2.3m per annum. The group are recommending that the bigger prize would be the establishment of a single customer services organisation including partners, to truly transform the service. The Assessment Group are due to report in October but have already identified that the citizen experience of the assessment process is very mixed; that there is considerable duplication in our current processes and there are potential savings, though a figure is not available at this time. The Group is exploring a number of themes including the establishment of a Barnet Assessment organisation to pull together staff

6.

7.

8.

9.

10.

14

from across the Council and partner organisations whose focus is on assessment. Reforming this area of work has huge potential for transforming the citizen experience and delivering significant savings. 11. The Strategy Group are due to report in October but have already identified the need for much closer links and potentially integration between the Council and partner organisations, to develop a joint view of needs and aspirations of people in the local area, to devise a common strategy and identify efficiencies. The Vehicle Group are due to report in October but have already identified that a single vehicle for the delivery of all Council services, as was proposed previously, is not feasible. The group is developing a blueprint for the Councils approach to commissioning services in the future. It is clear that achieving the predicted savings and improvements will be a considerable organisational task, requiring the use of significant capacity and some new capabilities. Careful attention will need to be paid to the phasing of activity if the Council and its citizens are to reap the rewards being identified. An organisational development programme should be established that will ensure that the initial directions proposed by the first 3 groups initially can be developed to achieve the savings and improvements identified. This strategy should encompass the three phases set out in point 4 above.

12.

2.4 Next Steps 13.

14.

2.5 Recommendations Members are asked to approve the following recommendations: 1. To adopt the following three aims as the strategic basis for making future decisions: o o o A new relationship with citizens; A one public sector approach; A relentless drive for efficiency.

These aims will be used to inform the 2010/11 budget process, the refresh of the Sustainable Community Strategy, the development and delivery of the next Corporate Plan and our relationship with partner organisations. 2. 3. To adopt a phased approach to delivering the Future Shape Programme which is based on the three stages of consolidate, commission and provide. To endorse the immediate consolidation of activity in the areas of Property, Support and Transact. Specifically to agree to: a. Strengthen the governance arrangements for strategic property decision making and redesign the corporate client function, creating a central single property unit for estate, capital projects and facilities management. b. An accelerated programme of consolidation of support functions into one centralised unit. c. Consolidate the front office into one Customer Service Organisation d. Take forward the Transact proposals for delivering efficiencies and improved outcomes by grouping services initially through internal reorganisation and then developing business cases for alternative forms of provision. e. Extended work on understanding the community needs and skills necessary to commission improved services by developing a shared intelligence function with partners. This work will inform future recommendations arising from the Future Shape Programme.

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4. 5.

To approve immediate and ongoing staff engagement and consultation on the change programme. To endorse the production of an organisational development strategy for achieving the programmes outcomes. This will be brought to Cabinet in October 2009.

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3.

Overview of the Future Shape Programme

The Future Shape of the Council Programme commenced in May 2008 and concluded its first phase in December of the same year. This is the first report to members under Phase 2, responding to the feedback received with regard to the Phase 1 report that we received from Members, Trades Unions, partners and staff, and setting out the overall direction for the programme. A final report on Phase 2 will be forthcoming in October 2009. 3.1 What were the original drivers for the Future Shape Programme? The original Future Shape of the Council Programme was based on the view that whilst the Council had enjoyed considerable success in achieving four-star status, it needed to understand and respond to future challenges to maintain that success. A number of changes were identified as being in need of a response. A changing national policy context

The Local Government and Public Involvement in Health Act, 2007 and the statutory guidance on Strong and Prosperous Communities, coupled with the new inspection regime of Comprehensive Area Assessments, meant a growing emphasis on the role of local authorities as strategic commissioners, securing the best outcomes for their local communities by making use of all available resources without regard for whether services are provided in-house, externally or through various forms of partnership1. This change in role was also being reflected in the rest of the public sector. The Primary Care Trusts (PCT) commissioning role, for example, is already being strengthened through the implementation of the recently published vision from the Department of Health on World Class Commissioning (WCC). A changing Barnet

The original report in May 2008 noted the predicted large scale regeneration and development. The overall population growth from, 335,000 to 360,000 and the growth in the economy by 11%, make it the fastest growing suburban borough in London. Mention was also made of the increase in the ethnic minority population from 31% to 36%. The growing numbers of young people and people aged over 65 could have a substantial impact on the need for services, as could the predicted 3.2% increase in the number of income deprived people. Declining grant settlements

The report predicted poor and worsening grant settlements from central government, with little or no prospects of improvement a 10m deficit each year for the next three years. Static satisfaction

Despite improvements in the quality of services and the Councils rise through the CPA scoring system, the levels of public satisfaction with the services the Council delivers has remained static. Intractable problems

Despite considerable spending on service provision there were a number of examples where the Councils expenditure seemed to have little effect, and citizen behaviour was not changing, causing an ongoing drain on resources. For example a significant health gap remains in the borough. The Council spends 16 million each year on 300 children in the care system. Yet their life chances are still substantially worse than people outside the care system.

Creating Strong, Safe and Prosperous Communities. Statutory Guidance: Draft for Consultation. November 2007

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3.2

What has changed since the inception of the Future Shape Programme?

In the intervening period, between May 2008 and June 2009 a number of changes have emerged that are additionally in need of a response Recession and the deterioration in the public sector funding picture

In the autumn of 2008, the UK and other major world economies began to experience a recession so severe that it has changed the outlook for the future of public sector finances, and reshaped the public sector marketplace. Public sector finances have been severely affected by the recession and the level of Government borrowing. According to one estimate from PriceWaterhouseCoopers (PwC), We estimate a fiscal gap of over 40 billion at todays values (around 3% of GDP) which would have to be closed to achieve current budget balance by 2013/14. The report goes on to say that closing this gap will require a real reduction in total public spending of 1.4% per annum in the three years to 2013/14; this would avoid the need for additional tax rises, but the scale of public spending restraint would be unprecedented historically and would require even larger cuts in departmental spending given fixed commitments on debt interest and many social security benefits Barnet has been on the grant floor for 3 out of the last 5 years and current local indications suggest that the budget gap over the next 3 years could amount to necessary savings of between 12 and 15m year on year. The recession has also had an impact on private sector providers. Historically the private sector has fulfilled a need for additional capacity in local government by investing substantially in partner authorities and securing pay back for this investment over a number of years. But the number of providers is shrinking with some in real trouble and others seeking a much shorter return on investment. Additionally the appetite for the market to take on risky ventures outside of areas of core competence has diminished. The Cabinet report of May 2008 sought permission to explore the idea of a Special Purpose Vehicle to procure and arrange the delivery of services on behalf of the Council. The recession has severely curtailed the capacity of the market to be able to respond to such a challenge. Deterioration in public satisfaction

Whereas at the outset of the Future Shape Programme the available data suggested that satisfaction was static, latest figures show that between 2006 and 2009, public satisfaction with local authorities fell from 52% to 45%. In Barnet the figure has dropped from 57% in 2006/7 to 51% in 2008/9. Perceptions that the Council provides value for money have also deteriorated. In 2008/9 one third of residents agreed the council provides value for money, an 8% drop since this question was last asked in 2006/7. This is despite ever improving results in the industry standard CPA ratings and despite a general increase in peoples satisfaction with their local area; up on average for 75% to 79%. In Barnet this figure has increased from 78% to 80% 3.3 3.3.1 The Case for Change Dealing with the change in local governments role

Whereas CPA was primarily a judgement on the activity and effectiveness of a Council, CAA provides a risk assessment based on the extent to which the Local Strategic Partnership: Understands and assesses the needs of its communities, now and in the future Uses this understanding to inform its local priorities Organises itself and ensures it has the capacity to deliver these priorities

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Ensures effective arrangements to identify and manage the risks to achieving priority outcomes

The critical judgement is based on how successfully the partnership is delivering outcomes for the community. The quality of our partnership working increases in importance and hence brings this area of our work into greater focus. The recent IDeA Peer Review identified some real opportunities in our partnership working: The council is seen as a focussed organisation but partners feel that more could be achieved with greater openness and collaboration There are real opportunities to enhance service provision/efficiency by working with the evident talent and enthusiasm in partners and residents There is potential to further develop cross-organisational joined up services The work that the council has done could be enhanced by further collaboration with partners and other councils

What needs to change? We will need to develop our people to realise a step change in our partnership, culminating in a one public sector approach, through: 3.3.2 Developing better ways of letting the public in to the process of service design and development. A shared understanding, through the Joint Strategic Needs Assessment and other activities, of the needs of our area, based on shared information and insight. A robust strategy jointly devised and implemented so that our efforts combine to achieve the best outcomes possible. Shared services where practical and advantageous. Combined development of leaders, especially at a middle management level, for the Barnet area, so that we can work together more effectively at a practical level. Dealing with an approach to savings

Barnet Council has an approach to savings as part of its annual business cycle. In the main, target figures expressed as a percentage are cascaded to departments, who look for ways to realise savings through service reductions and efficiencies. The Key Priorities Board is the relatively new forum where all of these services come together to look at potential cross cutting efficiencies. Through this approach Barnet has reduced costs by 80.9m over the last 8 years, an average of approximately 10m per annum. However the challenges of the future mean that an approach based on departmental efficiencies will be increasingly difficult to maintain. What needs to change? We will need to find new ways to make savings, based on organisational and interorganisational efficiency; taking advantages of economies of scope and scale; cutting out duplication and role overlaps and redesigning our processes. We will need to take decisions about service provision based on a deeper understanding of need. We will also need to develop strategic alliances with public and private sector organisations where these are advantageous, and become adept at procuring and managing those alliances. 3.3.3 Public satisfaction It has historically been difficult to pinpoint the key to increasing satisfaction. The evidence to date suggests that it is more than just the development of better services; indeed as satisfaction

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with services increases this seems to have little impact on the overall level of satisfaction with the Council. The commercial world has made considerable advances in the ways that it invites people to interact with it. Increasingly business provides opportunities for customisation and personalisation, enabling value added options on top of basic services. We have also seen a growth in the capacity to self-serve and interact 24/7/365. Much of this interaction is technologically based. We can shop, research and plan routes to destinations through handheld devices, and find help and advice through online encyclopaedia and search engines. Part of the answer to the satisfaction conundrum may be that these developments have not been matched by public services. Access to services is still arranged around a presumption of problem solving by specific services, rather than life challenges and life events or through enabling people to help themselves. Without fundamental changes to this picture public satisfaction is unlikely to increase. What needs to change? In our future shape we will need to develop ways that citizens can access help without having to waste their and our time contacting different agencies telling multiple versions of the same story. We will have to act as a hub for diverse sources of help to a community who will have increasingly varied needs and preferences. The development of greater opportunities for independence and choice in adult social care indicate the scale of the challenge ahead but also the big opportunities that this approach can deliver. As an organisation we need to ensure that provision across the public sector is designed from a citizen perspective. This will mean being able to show that public services are offering value for taxpayers money and that we can enable people to co-create services and get help from other sources. 3.3.4 Dealing with growth and recession - looking outwards not inwards At the outset of the Future Shape Programme the major challenge was managing growth. Some of that may still happen, but the added challenge now is slowing the decline; from place shaping to place shielding. This should not be a recipe for government interference or to prop up lost causes or encourage dependence. It should be based on facilitation of communities own efforts to build greater prosperity. What needs to change? In our future shape we will need to become much more focussed on and connected to the area we serve. We will need to have much more systematic ways of gathering information, and listening to what people say about the area not just our services. We need to make the time to listen and act by becoming strategic commissioners of services. This means that rather than provide and manage everything ourselves, we develop the skills and capacity to arrange for services to be provided, and we hold those services accountable for achieving outcomes on behalf of the public. 3.3.5 Getting to grips with the intractable issues helping to change behaviours In the past there has been a tendency to develop a culture where people see the Council as the provider of all services and the solver of all problems. In one stark example, a survey by the Henley Centre found that 78% respondents held parents to be responsible for childhood obesity, yet when it came to asking who was responsible for doing something about it the same number said government. In many professional circles there is widespread agreement that changes could come from a more active and responsible community. Whether in health, crime, education, safety or carbon reduction, they key is in the hands of citizens. Barnet has been in the forefront of addressing this issue through its work with CLG. Currently we are running a programme aimed at exploring how residents can be supported to achieve the sustainable uptake of environmental behaviours. The programme is comprised of three pilot projects, each focused on a different environmental challenge: household carbon reduction, household waste minimisation, and street litter

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prevention. The implementation of the pilots will serve as a learning exercise to develop the councils understanding about the principles, methods and measurement of behavioural change What needs to change? In our Future Shape we will need to understand how we develop the combination of incentives and boundaries that help people to understand and change their behaviour. We will need a new contract with citizens that encourages self-help and networking. We will need to ensure that we do the early work that encourages people to be active and responsible citizens. We will need to design our services so that they are based on evidence about what achieves good outcomes rather than focussing, simply, on the quality of our services.

3.4

Strategic Findings

Making the changes described above to meet to the challenges we face will require a transformation of our organisation and culture. Phase 1 of Future Shape aimed to clearly describe what this shape would be in the future. But it has since become clearer that the challenges we face are both substantial and uncertain for instance we dont know now what the economy will look like in 5 years time, or what citizens will expect from services. So Phase 2 of the Future Shape Programme aims to describe the journey we need to go on. Whereas before we have been focussed on what the Council will end up looking like, if we want Council activity to be shaped by citizens, then right now, we do not know what this end shape will be. That would be to predict the outcome of the new direction we are headed in, where we will be open to far more external influences to shape our development than ever before. For this reason beyond the October report, Future Shape activity will become part of the core activity of the Council and its partners, shaping the work of our staff in pursuit of improved outcomes for Barnet. The transformation will require us to work to a new set of organisational and partnership objectives 1. A new relationship with citizens developing a deeper understanding of community needs, aspirations and capacity connecting citizens with each other to encourage self-help enabling citizens to choose and personalise services working with the public to change harmful behaviours

2. A one public sector approach collaborative leadership; beyond organisational boundaries, with democratic accountability at the heart of it all retain only those things that add value to the public joint strategies to decide how resources are used jointly commissioning services through specialist vehicles to achieve better outcomes

3. A relentless drive for efficiency developing the space to think strategically and commission services ensuring a greater proportion of expenditure is preventative working with public, private and third sector partners to lower costs trading and gaining revenue through value added services

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4.
4.1

Planning for success; phase 2 of the Future Shape Programme

Rationale for the approach we took

To achieve successful change, the method by which we get there must be consistent with the new way we want to work. Accordingly we set out to look at the Council in a very different way, and to work closely with partners. 4.1.1 Developing a cross cutting architecture The way public services have been designed, incentivised, targeted and developed in the past is as a series of silos. Much work has been done to bring those silos together so that there are particular areas of deep co-operation; between adult social care and health for example, and between childrens services and schools. But separate services are still the building blocks of provision and the units in which we set out to reduce costs and develop services. Diagrammatically it can be represented like this;

We set out to cut across this silo-based approach by looking at what people did instead of what department they were in. We established a set of groups that were based on functions that cut across departments and which involved partners. It can be represented like this:

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Each of the horizontal arrows represents a group that, with Council sponsorship and external expertise has been working to deliver savings and improvements and to think about the future shape of the Council. 4.1.2 Counting the Council in a different way Working with our partners, PwC, we set out to count activity in the Council in a different way. We conducted an activity based cost analysis based on data provided by staff about the way they spend their time. The traditional way of counting the Council shows staff numbers per department:

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Whereas counting the Council by activity yields a different picture

This enabled us to better understand how the organisation operates as a whole, with a focus on the processes that take place across the organisation. It also helped us to identify opportunities to simplify, standardise or share processes across the

organisation.
The activity based costing exercise was mapped onto the future shape groups, enabling them to have a view from the outset, about how much was being spent on the area they were exploring. The exercise also enabled the groups to consider the potential for savings from changing practices in each area. 4.1.3 A note on the savings figures emerging from the Groups In section 7 of this report potential savings are identified that could accrue from both in-house improvement activity and external partnerships. The potential efficiencies quoted are gross and they do not take account of the potential costs of implementing the initiatives required to generate the savings. Early estimates suggest that these costs might be 1m 2m in the first 2 years to implement the findings of the Property, Support and Transact Groups. The aim would be to use initial savings to fund this investment. The estimates are based on high level analysis and have not yet been validated in detail at this stage. They are, however, sufficiently robust to ensure that further exploration will provide a good return on investment. These figures represent the view that savings in these areas are possible because: The current spend in Barnet on these activities is higher than in other Authorities that have been counted in this way. There is considerable duplication of activity, for example where there are places within the Council that perform a large number of processes within a single function, implying a large amount of duplication and fragmentation and presenting opportunities to simplify, standardise and share processes. There is a significant gap between current practice in Barnet and leading practices elsewhere. Where this is the case there are opportunities for securing greater efficiencies. The use of private sector investment and contractual partnership structures have produced better value elsewhere.

These figures do not however take account of the following:

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The cost of novating any existing contracts. The detail of how savings will be realised. The extent of the effort required to achieve savings.

Though we will need to do further work in order to quantify the exact figures that are achievable, we are confident that the groups have found that there are sound developmental reasons for pursuing the course they recommend, and sound financial reasons as well. 4.1.4 The Future Shape tests Each group generated a number of options for development. These options were tested against a number of criteria known as the future shape tests; to develop approaches to our activity that Cost significantly less. Take a different view of need, based on engaging with our population as citizens rather than customers of specific services. Are strategic and integrated, ensuring that resources are targeted to achieve priority outcomes. Facilitate greater self-help and service co-creation amongst members of our community. Are based on a clear contract between the citizens and services. Inspire behavioural change amongst our residents and businesses Can be accessed on the basis of residents life challenges. Help citizens to achieve better outcomes in their lives Are democratically accountable

4.2
4.2.1
Group

The work of the Groups

Remits
Focus How we engage with and determine the aspirations and needs of the people of Barnet and how we set about achieving the outcomes people want Potential areas for exploring how savings and improvements can be made From the integration of staff responsible for developing strategy From sharing the cost of gathering necessary data From identifying the areas where alternative approaches to costly provision could be pursued through, prevention, early intervention and behavioural change amongst citizens This group will initially be focused on disadvantaged families to prove the concept. The group will: Look at the current approach to supporting disadvantaged families and evaluate it from a citizen and an organisational perspective Redesign the way in which better outcomes could be achieved Consider the cost implications of the redesigned services The outcomes will be used as an illustrative example in discussions with potential organisations that could become vehicle partners.

Each group was given a remit and a set of identifiable phases to work through

Barnet Strategy

The Vehicle

Testing out the concept of adopting a different approach to tackling strategic issues in Barnet by designing a vehicle capable of achieving better outcomes for residents.

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Group Barnet Support

Focus Examining the potential for improvements and savings in support services in line with the aims of future shape. Incorporates the full range of back office functions including HR, ICT, Legal, Finance, Audit, Procurement To optimise the use of property assets and management resources in terms of service delivery, community benefit and financial benefit.

Potential areas for exploring how savings and improvements can be made Economies of scope and scale from combination with other partners Enabling greater self-service amongst customers Potential to trade with other Councils and/or our partners Potential to maintain and develop prosperity by becoming a resource to start-ups, the third sector and SMEs Reducing our need for property Reducing our staff/desk ratio Sharing property with public sector partners Changing the way we plan and manage our assets

Barnet Property

Barnet Access

How citizens access the range of services available across the public sector To identify those Council services that are deemed not to be a core competence or part of the value chain of the Council, and, where appropriate, to seek to find alternative delivery models to provide these services. To look at the costly area of complex assessments of citizens needs

Moving more back office processes into the front office Greater customer self service and self-help Shared access costs with partner organisations

Barnet Transact

Identification of services that could provide quick wins Non-core services for which there is a ready market Identification of more efficient ways of doing business with the Council e.g. cashlessnes self-service

Barnet Assessment

Through increased self-assessment practices Through engaging citizens in self-management of budgets Through cutting out duplication in the assessment process Through a unified communications approach which enables easier working between professionals

The outcomes of the work of these groups are detailed in section 5

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5.
5.1

Group findings and recommendations

Property Group

Where are we now? The Group found that: The Council owns or occupies over 550 properties with a total value of approximately 520m. Despite the size of this estate, the Council does not have the accessible good quality data required for strategic asset management and decision-making. The property organisation is fragmented; 187 FTE staff involved in property and facilities management (FM) are spread across the Council.

How do we compare against leading practices? The Council has a number of strengths in managing property, including its approach to office workspace planning and management. Programme and project management is also good, particularly the approach to delivering the Primary School Capital Investment Programme. However, there are also a number of areas that present an opportunity for improvement. These include: Managing the property function - design of the property function; governance; policies and standards; performance management; data Managing operational property/ managing office workspace and customer access facilities - strategic asset planning; property and facilities management; procurement and supplier management; programme delivery; energy efficiency Managing non-operational property - commercial estate; community and voluntary sector tenancies

Opportunities The PwC Property Diagnostic tool was used to quantify the size of the opportunity for each subprocess. Confidence in the baseline data is weak and gaps in the data have been populated using proxies and benchmarks. However, the quantification is intended to provide an indication of the art of the possible. This suggests that between 1.5m - 2.4m of cashable revenue savings are available from in-house rationalisation and reconfiguration and between 3.0m 4.9m from working with private sector partners. The table below shows where these savings would come from. Further work is required to test the size of the benefit opportunity.

Baseline

Total

Activity spend External spend Operating costs Energy Capital programme* Capital receipts** Avoidance of future costs Reduced environmental impact Backlog maintenance Carbon emissions (tonnes)

5.5m 5.8m 27.2m 3.9m 34.8m 173m 24.1m 34.5k

0.4m~0.6m 0.2m~0.4m 1.7m~2.9m 0.8m~1.1m 1.2m~2.4m 26.8m~40m 3.9m~8.1m 4.8k~9.3k

Cashable revenue savings

Capital savings

* Includes non-cashable savings on the capital programme **exl. Non-operational assets

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One public sector - opportunities with partners While the Property Group included representatives from partner organisations it was evident that the Councils property needs are distinctly different and the opportunities to work together would vary on a case by case basis. However, there exists opportunities to work on specific projects (e.g. to co-locate services together at Brunswick Park, and, if the Council is successful in its Building Schools for the Future application, with other new schools). A strategically focused Property Group would also engage with directorates and partners when considering specific opportunities for shaping the estate and supporting the delivery of services. Realising the opportunity recommendations and next steps Securing the benefit opportunity requires the adoption of leading practices in managing property and enabling the operation of good processes e.g. appropriate governance, policies, data and performance management. It also entails exploiting opportunities for asset rationalisation and reconfiguration. A two step process is recommended, as set out below. Step 1: Internal focus Strengthen the governance arrangements for strategic property decision making Redesign the corporate client function creating a central single property unit for estate, capital projects and facilities management services, with strong demand challenge processes, corporate standards, improved data, a performance management system, energy management and contract management. Invest in strategic asset planning processes across service departments and the wider public sector.

Step 2: Engage the private sector There are a wide range of opportunities to access the property supply market and there are a spectrum of delivery models that could be used from outsourcing to joint ventures and strategic partnerships. The Council should seek to: Engage third party private sector expertise to manage the routine estate management activities and FM processes including the commercial portfolio, enabling senior property management to focus on strategy. Use increased senior management capacity augmented by the private sector providers to implement a coordinated corporate approach to property, strategically plan and manage council assets and provide expert land development support. Continue to identify opportunities to co-locate services in space efficient but better customerorientated facilities, by disposing of existing buildings and recycling receipts to fund replacement Consider sourcing third party expertise using a Strategic Property Partnership that is incentivised to provide fit for purpose accommodation, drive out revenue costs and realise value from the Councils operational assets.

Seek to use private sector investors and contractual partnership structures to enable the Council to leverage asset value, sustain and enhance revenue income, share in future uplifts in Barnets land values and help fund and deliver the place shaping agenda.

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5.2

Support Group

Where are we now? The Councils support services have improved considerably over the last few years; significant investment has been made in supporting infrastructure which in turn has benefited front line services. Benchmarking data indicates that Barnet provides a low cost, high performing support service. Nevertheless, there are further opportunities for improvement and cost reduction. How much do we spend on support? The 2009/10 revenue budget for the main support services provided by the Council is 14.3m2. Sums included in Barnets base budget for support services Legal Services Internal Audit Strategic Finance (inc. devolved Head of Finance) Shared Services Finance Support and Payments Shared Services Information Systems Shared Services Human Resources Procurement 2009/10 Budget Estimate m 1.3 0.5 1.0 1.9 7.5 1.6 0.5

While on the surface the Council appears to have a centralised support model in operation, in practice the model is a hybrid of centralised functions, outsourced services and devolved services in directorates. These figures are therefore unlikely to provide a true picture of actual support costs. To address this, we analysed current support activity of the Council by process to understand the costs of hidden or devolved support. This identified significant support activity outside the Resources and Corporate Governance Directorates which is likely to result in duplication of effort and non-standardised processes:
Support FTE summary by Directorate
Resources Corporate Governance PHR E&T Adults Childrens

Support Support

264 48 26 82 51 169

Further work was undertaken to compare FTEs and FTE costs associated with standardised support processes in Barnet with the same analysis carried out in 15 other UK unitary authorities. This analysis suggests that Barnet has more people undertaking support activity across the Council (ranking 12 out of 15) and pays more for these people (ranked 14 out of 15).

This is not an exhaustive list but is useful indication of the cost of providing key support functions to the Council.

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While some of this may be a consequence of higher London salaries (none of the comparators were London Boroughs), this is clearly an area for further exploration. Where do we want to be? Future Support Transforming support services is a key facilitator to a wider transformation programme that enables Future Shape; having the right support services in place to help deliver better outcomes to citizens cannot therefore be underestimated. The group agreed that support services in 2014 will need to respond to a messier environment with multi-partners and customers across a wider base, mainly accessing services remotely. A more commercial and customer focussed mindset with a sustained focus on on-going savings will therefore be required. Opportunities It is recognised there will be efficiencies from centralising all support services and reengineering and standardising processes. However, given the complex future environment in which support services will need to operate, coupled with the scale of future budget pressures, in-house improvement alone is not seen as a sustainable option over the longer term. We believe that developing this piecemeal and in-house is unlikely to unlock the additional benefits around service improvements and transformation that a strategic partner typically delivers. Strategic partners can spread innovation and good practice from their experiences with a range of clients. They can also accelerate the pace of change within organisations, bringing skills and capacity to deliver the required change. It is therefore recommended that, whilst the Council should initially (and quickly) improve the coherence and consistency of its internal support services through in-house improvement, a different delivery model utilising the skills of a strategic partner is considered to transform support services and enable the authority to meet the future shape tests. The chosen model should also enable the Council to trade to organisations in the public and voluntary sector and potentially the private sector over time. This is seen to have considerable potential given that there is currently no joint venture or similar model operating in London local government. To make the offering more attractive to a wider pubic sector market and increase the potential for cost reduction and service improvement from the outset, it is recommended that the Councils support services should be joined with at least one other public sector partner in Barnet. The size of the opportunity depends on the option that the Council decides to pursue; it is estimated that establishing a joint venture company or similar delivery model could deliver up to 4.4m worth of efficiencies, compared with up to 2.3m from in-house improvement alone. Further work is required to test the size of the benefit opportunity. Recommendations and Next Steps It is recommended that the Council: 1. Develops an in-house support services improvement and efficiency plan that: responds to support services/costs still operating in devolved functions lowers operating costs through service re-design and rationalisation of activities responds to fragmented outsourcing contracts for some limited numbers of support services and re-align activities

2. Tests existing service cost and quality for support services against the following four delivery options: Joint Venture Partnering contract Limited Liability Partnership Social enterprise and shared service

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Subject to agreement of recommendation 2, a business case will be developed in collaboration with public sector partners interested in sharing services. This will also inform the development of an in-house improvement and efficiency plan.

5.3

Transact Group

Where are we now? Currently a large proportion of Council services are delivered in-house compared to some other comparable local authorities; the only notable exception being Adult Social Services where the council largely operates as a service commissioner. The debate about in house and outsourced services The Groups remit was to consider whether some of these services could be improved and costs reduced by finding alternative provision in the market place. There are important philosophical as well as pragmatic issues in this debate. Philosophically, the Council needs to determine its role in the future and the balance between what is provides itself, directly through in house provision and those things it either stops providing or looks to others to provide. In the current climate there are several factors that point toward the Council adopting a position whereby it provides services itself only where there is a clear strategic imperative (i.e. where the service is central to the organisations purpose and could not be entrusted to anyone else) or where the market place is incapable of delivering comparable levels of service, cost or continuous improvement. First, there is an increasing recognition that the role of local government is to achieve outcomes for place, rather than simply deliver services, as shown by the move from service-focused regulation through Comprehensive Performance Assessment to Comprehensive Area Assessments, which looks at outcomes in the borough as a whole. Second, there is an argument that the unique competence of local government is understanding and championing the needs of its community. When other organisations can demonstrate the required capability to deliver services, continuing to provide them in-house might actually obscure this unique competence. There are a number of examples of services that historically local government provided that have now been handed over to other organisations, for example, water, gas and electricity services and health care. Third, while the current delivery models are seen to be operating effectively in most areas of the Council, there is a risk that the performance of services will begin to diminish as budgets are inevitably cut further at the same time as demand for services continues to rise. This could have a negative impact on both community outcomes and customer satisfaction because there is limited potential to deliver significant further savings in the majority of services without considerable service redesign. In addition, in a number of areas the Council does not have the commercial expertise to exploit opportunities and build capacity. Where it does, each annual budget cycle and efficiency drive is potentially reducing funding for specialist expertise such as environmental based technical and professional officers. In other areas, the Council is failing to benefit from economies of scale from joining with other providers in the public, voluntary and private sectors. In the view of this, there is a good case for the Council to explore whether alternative delivery models would be able to: Deliver better outcomes for the citizens of Barnet by working more effectively with partners Raise performance through third party and particularly private sector business innovation Deliver efficiencies through economies of scale and service transformation Create sustainable specialist pools of expertise that can be shared and funded over a sustained period

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Free up the council to focus on its strategic and place leadership role as well as partnership building Generate additional income by optimising current fee earning services and by identifying new traded services opportunities.

Where do we want to be? The review of services using a filtering assessment model showed there is significant potential over the next three years, including some quick wins in the next 18 months, to meet these outcomes by focusing on a number of alternative delivery models for prioritised council services. We anticipate that such an approach would also enable additional income generation through additional fee income through the provision of better services, the opportunities to provide services to other public sector bodies on a tradable basis and through provision of value-adding services which could be charged for. We are recommending a waved approach to developing alternative delivery models for specific services or, where appropriate, larger service bundles. This takes account of where services are currently, the maturity of the provider market and the potential benefits available. The size of the opportunity depends on the option that the Council decides to pursue and the service bundles chosen. We believe that between 4m 5.8m per annum could be saved from pursuing new delivery models. This does not take into account the additional income generation opportunities available. Even erring on the cautious side, given current market conditions, these could range from 0.4 1.1m. Services recommended for these waves, and the potential efficiencies available from new delivery models are shown below:
Wave Wave 1 Transport Services 466 699 (10 -15% of total current costs) Bundle 1 - Street scene Service considered in scope: Engineering services and highways maintenance Street cleaning Street enforcement CCTV Parking Grounds maintenance Tree management Public conveniences All other E&T services (excl. transport or waste/recycling). Bundle 2 - Environmental development and regulatory services Service considered in scope: Trading Standards and Licensing Environmental Health & Pest Control Building Control Planning Enforcement and Processing Land Searches Public mortuary School catering 105 (100% of total current costs) 200 - 400 35 71 (5-10% of total current costs) 115 - 200 1,051 1501 (7 10% of total current costs) 100 - 500 Potential Efficiency Saving (000) Income generating potential where applicable (000)

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Wave Registrars service Residential care (in-house provision)

Potential Efficiency Saving (000) Savings not quantified at this stage 521 781 (10-15% of total current costs)

Income generating potential where applicable (000)

Home care (new contractual arrangements for existing outsourced provision) Wave 2 Council tax, benefits and rates (this could also include financial assessment activity and income collection being undertaken in Adult Social Care) Bundle 3 - All Housing services Service considered in scope: Housing services Housing stock Housing management (currently Barnet Homes) Allotments Bundle 4 - Refuse and recycling

983 1475 (8 12% of total current costs)

311 466 (10-15% of total current costs)

Savings not quantified at this stage

Savings not quantified at this stage 491 701 (7-10% of total current costs)

Recommendations and Next Steps It is recommended that the Council: 1. In the consolidate phase, develop an approach which groups services together in line with the clusters set out above, and drives savings by identifying areas where duplication can be stopped and where standardisation and reconfigured processes can be adopted. Verifies the figures and tests savings assumptions through a soft market testing exercise. Develop a business case that shows which delivery methods can best meet the Councils and residents needs where appropriate.

2. 3.

Subject to agreement of this recommendation, a business case will be developed for each identified service/service bundle. All business cases will need to demonstrate added value and will be subject to consultation.

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Update on Groups reporting in October

The following groups have yet to complete their work and are due to report back in the final report in October 2009. However, from their initial meetings they have developed some initial findings and some hypotheses about the future.

5.4

Access Group

Where are we now? Whilst there are some excellent examples of the Council working in a joined up way with partners in relation to access activity, customer feedback suggests that this approach is not always applied consistently. Customers report sometimes struggling to navigate their way around complex organisations and getting lost in multiple transactions. The quality of service can feel inconsistent across departments and customer data is at times limited, thus limiting the degree to which customer need and preference can drive policy and planning decisions. In a fragmented context the technologies currently employed by the Council and its partners are not always fully exploited and group discussion highlighted areas of duplication and waste resulting from information and process flows between organisations which are not as efficient as they could be. In addition, customers now expect to be able to access public services through a variety of channels yet the deployment of multiple channels varies between organisations. Work indicates that in the Council alone there are approximately 300 people involved with customer facing processes with an estimated resourcing cost of 12.9m. This does not include the additional costs associated with approximately 100 systems used to process and collect customer data. In their comparison work with 14 other unitary councils we found that Barnets staff costs for access processes were higher than the majority of other councils and that the number of FTEs employed in access activity was also comparably high. Work is being undertaken to further validate these assertions but even at an estimate stage we gain an indication of the size, scale and budget associated with delivering services in this fragmented way. Where do we want to be? The Council could consolidate its access arrangements straight away, achieving efficiencies and savings in the short term by building on the successful work done to date. Centralising all access arrangements, standardising structures and processes, deploying technology on an invest-to-save basis and channelling management and workforce development would allow the Council immediately to begin to make savings in the short term (data suggests this could be as much as 2.3m, realisable within the next 12 months). However, limiting improvement activity to Council access arrangements also limits the potential savings and efficiencies realisable. These could be made significantly larger by moving beyond organisational boundaries and gaining access to substantial economies of scale. Simplifying access arrangements across a range of services and self-help functions across the public sector in Barnet is likely to require significant investment and significant savings would not be made within the first two years of operation. However, adopting a one public sector approach to access arrangements offers multiple benefits to Barnets citizens and new ways to resolve issues identified by the Council and its partners as common challenges. A future model which is flexible and intelligent enough to capture the changing needs and expectations of customers would enable our customer insight to develop beyond demographic information into a rich picture of our citizens, driving even more effective policy and service improvement. In a significant step towards this, the Council and its partners could consolidate the front office into one Customer Service Organisation (CSO). This single CSO would be responsible for providing services on behalf of the public sector organisations to the citizens of Barnet. It would:

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Have a clear mandate for customer service Represent the voice of the customer: By creating one CSO, the currently fragmented voice of the customer could be presented as an integrated whole. Use customer data to build a fuller picture of customer need which would drive policy, planning and service improvement Focus on quality assurance: Performance management and monitoring would be integral to the CSO Develop and adopt new technologies to provide increasing choice for customers.

Delivery Models Post Consolidation A range of alternative options for delivering a CSO are available:
Delivery Option Summary

Council remains the main delivery vehicle

Strengths/ Opportunities Council remains in control and can actively influence the shape/ direction of the CSO Can align CSO activity with other corporate functions Tend to recruit locally so staff have a commitment to the borough and the people they serve Basics already in place to build on: contact centre technology, CRM ) Relatively low risk but could still bring about improvement and efficiencies

Key Risks and Threats Co-ownership model (Employees, Customers, Members are the major shareholders) Investment required to improve radically Difficult to create a new brand/ new relationship with customers when operating with a legacy Making the model attractive to partners Success very dependent on workforce development, cultural change + business process improvement long term changes

Strengths/ Opportunities The ultimate purpose is the happiness of all its members, through their worthwhile and satisfying employment in a successful business, this success is translated in to a share of the profits This creates a context where innovation and entrepreneurial skills are central to the culture/ philosophy of the organisation Can develop a strong commitment to social responsibility for the communities served Increase productivity and retention of staff (reduce recruitment costs) Long term goals as well as short term objectives are every ones business Build a brand that can be trusted by customers Creates space for customer involvement and exchange of ideas Clear governance structure established

Key Risks/ Threats No precedence of this in local government Financial reward can become the focus rather than quality Not easy to reverse should the operation start to fail Creates a different democratic relationship could be sense of loss of control

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 Joint Venture / Outsourcing

Success relies on standardisation so investment would be required Industrial relations issues and impact on things like pension fund

Strengths and Opportunities Partnering can spread cost and risk Can gain access to expertise in specialist areas for example technology Lessons to be learned from other organisations who have been through this process Could be opportunities to take on additional work/ markets and grow the business Flexibility can be built in to a JV so the areas of high volume/ low cost are covered and more detailed case work for example can be excluded Can overcome organisational boundaries

Key Risks and Threats Perception about JV and possible negative media attention Need to be clear about our strategy are we about consolidating and delivering or about growth in Customer Service Investment needs to be made in building relationships with partner organisation Maybe an imbalance/ difference between the culture of the partner and the council creating a difficulties in governance, integration and decision making etc Contracts need to be flexible what we need in years one and two will change over time

Next steps Further work to quantify the potential level of savings and the likely costs as well as work to test out the merits and feasibility of these delivery models will be carried out by the group in subsequent meetings and reported in the final report in October 2009.

5.5

Assessment Group

The Assessment Group aims to develop, in relation to assessment activity across the public sector, proposals with potential private, public and voluntary sector partners for the reconfiguration of services in the borough. These proposals will include a detailed assessment of costs and potential savings, and when they would accrue. The group is focussed on assessments which are: Currently conducted by the public sector and have as their subject a member of the public Involve a degree of judgement that would exclude them from being undertaken by Access Barnet Relate to issues that have the potential to be effectively and efficiently managed in a cross-cutting or multi-disciplinary manner.

The group is also analysing how models of assessment would support highly disadvantaged families, on the assumption that lighter models of assessment can be developed from proposals about how to tackle such complex situations. Where are we now? What the Council and its partners are telling us: The group discussed with partners their experiences of public sector assessment in the Borough. Key themes that emerged are that: The assessment process works best where a good relationship has been built up with the members of the public involved.

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Tone used is important to the client experience of assessment processes Multi-agency responses are positive in tackling issues effectively. People had generally positive experiences of the work of lead professionals, case managers or brokers Some people report that assessment could be better coordinated Many assessors in Barnet are involved in customer contact activity and the line between these two functions can be blurred.

What the data is telling us: The early analysis of Council assessment activities needs further validation but from their work we can get an idea of the scale of the resources currently spent on assessment activity. The equivalent of 5.8% of Barnets complement of FTE is dedicated to assessment. This is the lowest proportion of staff effort dedicated to assessment that PwC have found in 10 authorities where they have used the same methodology to measure allocation of effort3. Over 30% of the organisational units included in our analysis undertook assessment activity. Many of these units were also engaged in a large number of the other processes (for example, the Benefits Fraud Investigation team were involved in 72% of the 36 processes). Whilst more detailed analysis is required to draw conclusions about the work of any one team, these figures could support an argument that our assessment activity is in parts fragmented across a number of mini businesses, with skilled assessment staff being diverted into a number of areas of work which do not depend on their expertise. Whilst there has been a lot of excellent work to rationalise administrative processes in relation to assessment, the number of FTEs spent on administrative activities in some areas remains high. More detailed analysis is required to reach any conclusions about specific units, but this indicates that there are still some labour heavy processes and IT systems which could yet be improved. Where do we want to be? The data presented above indicates that whilst there are some excellent examples of assessment activity in the Council, there are some areas which could be improved through a revised model of assessment which: i) Focuses on our relationship with people being assessed, potentially mainstreaming casecoordinators, to ensure efficient and effective assessment ii) More clearly focuses the assessment function: specialised staff time is spent on cases which require expertise, as opposed to more generic contact management or administrative tasks iii) Brings together groups conducting assessment across the Council and the public sector to benefit from efficient information sharing and coordinated activity. Early proposals Informed by the information about the current model of assessment in Barnet and by detailed analysis of leading assessment practice (see the detailed Assessment Group Report) the group developed some initial proposals: Theme 1: Develop One Barnet Assessment and drive it from a strategic level Issue: the needs and aspirations of individuals and families do not fit neatly into current organisational units. The Council has made significant progress in its assessment activities but partnership working could still be improved through better information sharing and a more joined up approach to assessment.
3

Comparator sites were not London boroughs

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Theme 2: place prevention and early intervention at the heart of assessment Issue: Our current assessment activity is largely focused on assisting people in a period of crisis. Whilst they are often the people who most urgently require assistance, we could improve our approach to include better fine tuned tools to identify the weak signals of early-stage problems that can be prevented. This could reap significant savings in the long term: the cost of resolving a fully developed crisis is significantly more than the cost of corrective action in relation to lesser, contributory problems. Early intervention is likely to have a better impact on customers quality of life. Theme 3: providing people with greater control over assessment Issue: An effect of uncoordinated assessment is people not having an understanding of, or control over, the support they receive. This is problematic for three reasons: It may decrease the degree to which they make use of the support, thus decreasing its efficacy; It may mean that the support is less well coordinated and less effective overall; It may mean that people are not clear in expressing their preferences, meaning that they receive support that is not as effective, and possibly more expensive, than that they would have chosen for themselves.

Next steps The group will now develop the proposals outlined in this report. There is clearly more work required to validate and to cost the size and scale of the operations that currently exist across the LSP and voluntary sector and the appetite for change across Barnets public sector needs to be determined. In addition there is work to be done to determine the size of investment needed to implement the improvements proposed and the potential savings delivered by a one Barnet approach to assessment.

5.6

Strategy Group

A key objective of the Strategy Group is to assess what we would need to do across public service organisations in Barnet collectively to understand local need and future challenges, and to reflect these in the boroughs strategic priorities. Where are we now? The Strategy Group agreed that there are some excellent examples of good strategy making within individual organisations and departments across the public sector in Barnet. It concluded however that we do not yet work consistently as public bodies in as joined up a way as possible and that in going forward and in the context of a challenging economic climate, there are a number of strategic challenges which we may struggle to meet using current ways of working. These include: Population change and its related challenges- managing growth, changing demographic, the need to change infrastructure Inequality- the polarisation between wealthy and deprived across the borough Sustainability: waste, pollution. Community cohesion Prevention and safeguarding A growing number of things to do: how do we prioritise? What do we prioritise? How do we find the space to tackle the biggest and most difficult issues - climate change, obesity etc?

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Impact of the recession.

Where do we want to be? The strategy group has developed a very clear consensus that partners should work towards a common intelligence function without delay in order to underpin commissioning decisions for 2010/11. This proposal to move forward with detailed planning for how to bring about a common intelligence function has also emerged from other recent partner discussions about the future of public services in the borough, most notably work on CAA self-evaluation. The arguments in favour of common intelligence activity are relatively straightforward: Understanding the challenges the borough faces requires the combined intelligence of each partner organisation and the differing perspectives that each brings. Each partner organisation already has a strong strategic role that involves intelligence gathering, analysis, priority setting and policy making. Joining up these activities across partners should both create more integrated and weighty analysis and policy making as well as generating efficiencies. Many of the challenges we face are complex and understanding them requires the combination of a range of knowledge, research and analysis techniques, none of which are held in sufficient capacity in any single partner organisation.

What is meant by a common strategic intelligence function? The word intelligence, like strategy has many different interpretations, so we need to create a framework to clarify what it is we mean. Importantly, the group does not envisage the proposed function simply as a quantitative data observatory. Rather, it is an opportunity to build a function with the skills, tools and methodologies to combine various forms of intelligence, from analysing large Mosaic-type data sets, through consultation feedback, to the softer stories and anecdotes residents tell about their views and aspirations. The following three areas of activity are offered as a starting point for developing a common intelligence framework for the borough: Understanding the people and the place understanding at a fine level of detail, what life is like for people in Barnet. It requires an understanding of the interplay between the hard data, the qualitative analysis and anecdotal evidence. Understanding the future challenges for people, communities and the place as a whole what will change and what will remain. Creating analyses on which to base innovative approaches to addressing the most intractable and/or least well understood social, economic and environmental challenges and developing a strong evidence base for what works.

Next steps The detailed outputs from the group in the coming months will be: An analysis of partners current strategic intelligence activity Proposals for potential future models that increase the value of this activity and reduce the costs An analysis of the potential costs and savings of implementing these new models.

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5.7

The Vehicle Group

Remit of Vehicle Group The Vehicle Group is testing how we commission approaches to tackling complex and costly strategic issues in Barnet such as obesity, waste reduction and disadvantage. The focus is on working across organisational boundaries and alongside residents to design vehicles capable of achieving better outcomes for the people of Barnet. A vehicle is defined as the entity that manages a process through which we take a complex issue that needs a response, design a solution, develop sufficient capacity and organise the implementation of the new approach. This is shown visually below:
Naming the problem, taking a different view of the problem, designing a new solution (disruptive thought)

Private Funding if necessary

Utilising existing and attracting additional capacity - Staff, s, technology, political leadership

Public Funding

Implementing a new approach

The vehicle concept is similar to the current model of joint commissioning where two or more agencies pool their resources to implement a common strategy for providing services. However, there is a greater focus on taking a completely different view of a complex issue and looking at how a wider range of organisations and people with a stake in the problem can work together to design innovative solutions. The vehicles will also be used as a means to attract additional investment from the public and private sector. To prove the vehicle concept and develop a blueprint for a new approach to commissioning, it was agreed that the complex issue of disadvantage and its human and economic impacts should be considered by the group. The majority of the groups work is being undertaken between June and September 2009. Testing the vehicle concept With such a complex challenge, the group, which includes a range of public and voluntary sector partners, has reviewed the plethora of national policies and academic research. The group is applying design thinking to consider a new approach which starts with the people and thinks about the business implications at the end. Ethnographic day in the life research is being undertaken to understand the experience of disadvantaged residents within the borough. This ensures that any silo thinking around issues is quickly broken down and a layer of disruptive thought is added. It also enables public service managers to look at the issue afresh and challenge existing notions of what does and does not work. Next steps Work will be undertaken by the group between now and September 2009 to: Develop a proposal for addressing disadvantage in Barnet Identify how roles / organisations might need to change Identify what needs to be done at macro and micro levels Design the vehicle for achieving better outcomes

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Consider in partnership with the strategy group how the Council and its partner organisations should in the future develop the capacity to understand other issues and develop different approaches. It would appear at this early stage that a dedicated commissioning resource will be recommended to look at an issue in a completely different way. New approaches will be grounded in the expertise not of officers but of residents of Barnet.

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6.

Helping the change happen; an Organisational Development Strategy

A number of themes emerge from the work of the Future Shape groups and the organisational transformation journey mapped out in section 5. Firstly, we are not starting from a blank sheet. Many of the initiatives around property, support, assessment and so on have already begun. Substantial progress has already been made on personalisation and choice; central support services are driving the adoption of modern ways of working, which is having an impact on the scale of our property needs. There is already collaboration between departments putting vulnerable people at the centre of their endeavours. There is already work ongoing on self-assessment, self-service and so on. We are well placed to make the changes necessary; it is a matter of taking current innovations in individual Council departments, learning from them and spreading good practice across the whole organisation. Secondly, the amount of activity in the departments suggests that the Council is, in parts, already aware of the direction it needs to go in. There is a substantial amount of development within the organisation; the challenge is to bring this activity together at sufficient scale to convert this into organisational development. This will require the transformation journey to be understood and owned by all people within the Council and to be reflected in all our activity. There are number levers for change illustrated in the diagram below. An essential pre-requisite for change is for all of those levers to pull in the same direction. This will ensure that the message that members, staff, partners and the public is consistent and shows the momentum for change.

The third theme, emerging particularly from the work of the Future Shape Groups is that before we take the bold steps toward alternative forms of service provision there is a period of consolidation and capacity building required. The data we have on the cross cutting areas is that considerable improvements could be achieved by putting out own house in order first. Indeed this will be an essential precursor to pursuing any more wide-ranging agenda. What is indicated therefore is a phased approach to development over the next three years.

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6.1

Organisational development phases

6.2
6.2.1

Next steps for the Future Shape Programme

Build the current workstreams into a coherent organisational development programme

The Future Shape Programme has been driven by a small group at the centre of the Council and through the commitment and enthusiasm of the group leaders and the staff members and partners who have joined the debates. The Programme now needs to develop into a major coordinated change programme that is focussed and resourced to move through the three organisational development phases outlined above. The Groups will need to be reconfigured, strengthened and will need to ensure representation across Council departments, Trades Unions and partner organisations. The Programme Board will also need to ensure that the links and dependencies between the groups are mapped and maintained. 6.2.2 Reconfigure the groups Develop a people workstream

It has become apparent over the last few months that despite the obvious progress and exciting opportunities being developed through the Future Shape Groups, there is a stream missing, a people development stream. Such a stream is necessary for a number of reasons: Achieving the necessary transformation will not be done without development in the perspectives and skills of senior and middle managers across the Council. Moreover many of the developmental areas will require closer working relationships with partners. We also, in the midst of all of the emerging proposals for alternative service delivery vehicles, need to think about how we build our commitment to good employment practices and staff development into any partnership arrangements we develop. Develop a commissioning workstream

The group currently named the Vehicle Group has been affected most by the changes in the direction of the programme brought about by shifts in the local government market and by the feedback on the original proposals in December. In its current configuration it is essentially working out our approach to commissioning using our approach to disadvantage as a case

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study. The recommendations of this group will be key to ensuring that Barnets approach to commissioning is genuinely innovative: When the current Vehicle Group has reported it should then be renamed Barnet Commissioning and its membership strengthened. It should then take on four tasks o To co-ordinate in conjunction with our partners, the participation of citizens in priority areas so that they can take part in a genuine partnership to deepen our understanding of need and to discover what works in achieving better outcomes. To specify with our partners the outcomes that will meet the aspirations of the community, and to develop the governance arrangements necessary to ensure democratic accountability. To research and define leading practices in the governance arrangements of services provided through partnerships, so that services are still subject to democratic accountability, and so that contracts are managed in the spirit of genuine partnership. To co-ordinate a programme of procurement exercises that will develop the partnerships necessary to deliver better outcomes for people in Barnet. Re-name Barnet Access as Barnet Connect

The Future Shape proposals outlined in this paper envision a society in which citizens are more active and assume greater responsibility for the way in which they conduct their lives. The growth of the Internet and more recently the development of Web 2.0 technologies have seen a significant growth in citizen self-service. Furthermore, the development of different forms of networking has seen a huge rise in the capacity of citizens to offer help to each other. The name Barnet Access still gives the impression that the work of this group is solely about improving the way in which people get access to services and doesnt include self-help and networking. Changing the title to Barnet Connect will much more accurately convey the groups remit. Once the groups have been reconfigured and their membership strengthened each of the groups will then work through the three steps outlined in section 8.1 above. We will develop a process for each of the groups which will require them to make the business case for funds to support invest to save or procurement activity.

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6.3

Outcomes of the Organisational Development Phases

Putting together the group findings, recommendations and the identified organisational development phases yields a potential outline of a transformational plan. This plan identifies the outcomes that each group needs to deliver. This is provided below in the table below.

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6.3.1 Transformational Programme Outline

Group Strategy Consolidate Establish a joint intelligence function, bringing together strategy-focussed people from across our partnerships. Conduct a total place exercise quantifying public sector spend on community plan themes. People Identify the people whose collaboration is vital to delivering better outcomes Design a leadership development programme accessible to all public sector partners. Identify best practice in people development activity as part of the specification for any partnership development Commissioning Use the recommendations from the vehicle group to design the Barnet approach to joint commissioning Determine the priority areas for commissioning with partners Develop a dialogue with citizens about needs, aspirations and what would help to deliver valued outcomes in the priority areas Support Consolidate existing approaches to support and establish Barnet support as a shadow Procure a strategic partnership for support services and for public access and Commission Influence the commissioning strategy of Barnet so that the proportion of funds spent on effective preventative work increases Ensure that services commissioned are based on sound evidence of leading practices Commission the leadership development programme Develop a Barnet specification for staff terms and conditions and development opportunities to be incorporated into all external partnership arrangements Ensure that the programme delivers closer collaboration between partners and more effective leadership Ensure the Barnet commitment to people development is built into all procurements Provide Establish a Council strategic core which will play a key role in securing pan public sector efficiency.

Develop and implement a programme of procurement exercises, jointly with partners where necessary

Ensure that the Council and its partners develop and implement approaches to effective alliance management for commissioned services. Realise savings and improved outcomes through a commissioning approach

Manage the partnership so that it delivers additional savings of 2.1m

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organisation. Deliver savings from consolidation of up to 2.3m Explore areas of collaboration with partners Connect Consolidate existing approaches to public access and drive savings of up to 2.3m and achieve improvements through this. Explore the areas for collaboration with partners Develop Barnet Connects as a shadow organisation Assessment Consolidate existing approaches to assessment and drive savings and improvements (unquantified at present) In conjunction with partners, develop an approach to joint assessment Property Consolidate our approach to property management and through the development of leading practices, drive savings of between 1.5 and 2.4m and make improvements to existing provision. Explore areas for collaboration with partners Transact Identify the clusters of services that enable closer co-operation and economies of scope and scale. Link the service clusters with Local Area Agreement outcomes Conduct soft market testing to explore the

networking services

Provide a set of support services that are efficient and that help purchasing organisations achieve strategic goals. Attract additional revenue through trading.

Procure a strategic partnership for support services and for public access and networking services

Manage the partnership so that it delivers additional savings (not quantified at this stage). Attract additional revenue through trading. Ensure that the public have easier access to all public sector services and greater opportunity for self-help and networking.

Develop a vehicle for the delivery of assessment services

Manage the partnership so that prevention and early intervention are at the heart of assessment and so that people have greater control over the assessment process. Manage the partnership so that we develop a strategic approach to property needs. Achieve greater sharing of property with partners and reduce the amount of property the Council needs to own.

Develop a strategic partnership for Property Services

Where advantageous, procure services in clusters.

Manage partnerships so that services are provided at less cost that contribute directly to outcomes that citizens value. Achieve savings of between 3.8m and 5.7m

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readiness of the market to take on such services and to contribute to outcomes on a risk and reward basis Costs and benefits Transformation costs should be met from within existing resources with the potential to deliver up to 7m potential savings* Additional funds required for procurement activity, each group will need to make the business case for funds to support invest to save activity and procurements. From within existing resources with the potential to deliver up to 7.8m in additional savings**

* These are interim figures based on the reports of 3 groups. * *These are interim figures based on the reports of 2 groups

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7.

Conclusions and recommendations

Barnet Council has become a very successful organisation in recent years. It has achieved improvements in costs; in the quality of the services it provides and in recognition of these facts has established a reputation for excellence in the local government world. In achieving this, the Council showed that it is not complacent and that it does not shrink from facing the need for necessary changes. The Future Shape Programme was developed in response to changes in the national policy context, changes in the economy of the Borough, declining grant settlements, static public satisfaction and intractable problems in the community. Since its inception the public sector landscape has been affected by the recession and recent statistics show a decline in satisfaction locally and nationally. Meeting these challenges will require us to strengthen our partnership working, find new ways of making savings, revitalise the way in which citizens interact with public sector services and develop a new relationship with citizens. Members are asked to approve the following recommendations: 1 To adopt the following three aims as the strategic basis for making future decisions: o o o A new relationship for citizens; A one public sector approach; A relentless drive for efficiency.

These aims will be used to inform the 2010/11 budget process, the refresh of the Sustainable Community Strategy, the development and delivery of the Corporate Plan and our relationship with partner organisations. 2. 3. To adopt a phased approach to delivering the Future Shape Programme which is based on the three stages of consolidate, commission and provide. To endorse the immediate consolidation of activity in the areas of property, support and transact. Specifically to agree to: a. Strengthen the governance arrangements for strategic property decision making and redesign the corporate client function, creating a central single property unit for estate, capital projects and facilities management. b. An accelerated programme of consolidation of support functions into one centralised unit. c. Consolidate the front office into one Customer Service Organisation d. Take forward the Transact proposals for delivering efficiencies and improved outcomes by grouping services initially through internal reorganisation and then developing business cases for alternative forms of provision. e. Extended work on understanding the community needs and skills necessary to commission improved services by developing a shared intelligence function with partners. This work will inform future recommendations arising from the Future Shape Programme. 4. To approve immediate and ongoing staff engagement and consultation on the change programme.

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5.

To endorse the production of an organisational development strategy for achieving the programmes outcomes. This will be brought to Cabinet in October 2009.

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8.

Background papers
Strategy Group Interim Report, June 2009 Vehicle Group Interim Report, June 2009 Support Group Report, June 2009 Property Group Report, June 2009 Transact Group Report, June 2009 Access Group Interim Report, June 2009 Assessment Group Interim Report, June 2009.

The relevant background papers for this report are:

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Appendix 1: Future Shape Options Analysis by Group

Property
Gross savings; in house option Efficiency saving Description 1.5m 2.4m cashable revenue savings The Council implements leading practice management arrangements, and improved strategic asset management and technical processes. This includes strengthening governance, consolidating the property organisation and investing in authority-wide and multi-agency asset planning, corporate property data systems, performance management and supplier and contract management. Do we have the skills and capacity to drive the necessary savings and improvements? Weak; Is strategic and integrated and ensures that resources are targeted to achieve priority outcomes. However, still dealing with a single organisation paradigm. Savings will be limited Gross savings; with private sector partners 3.0m - 4.9m cashable revenue savings The Council implements leading practice internal management arrangements including an informed client function. It accesses the expertise and enhanced capacity of private sector organisations that have property service delivery as their core competency to reduce the cost of service provision through economies of scale and best models of working e.g. a unified help-desk is implemented as part of the customer-centric property delivery organisation. Are we fully exploiting economies of scale by not joining up with public sector partners in Barnet? Moderate; Harnessing skills and capacity of the private sector will lead to greater likelihood and acceleration of full benefits realisation. However, limited opportunities have been identified for working with/sharing with public sector partners Activity spending; external spending; 50% of energy savings 2011/2012 Operating costs; 50% energy 2016-2019 TBC. At this stage the costs of implementing the changes have not been estimated. There will be higher procurement costs than under option 1 e.g. to secure a strategic partner. The invest to save funding required to raise performance

Key Questions

Correlation with Future Shape Tests

Realisable when?

Activity spending; external spending; 50% of energy savings 2011/2012 Operating costs; 50% energy 2019-2026

Costs to make savings

TBC. At this stage the costs of implementing the changes have not been estimated. They include business consultancy, technology consultancy, license costs and property consultancy costs. Under both options, the savings on premises operating costs and

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50% of energy savings are contingent upon rationalising and modernising the operational portfolio. In the current economic environment this is likely to require significant invest to save funding. Under both options it is assumed that the investment in enhanced strategic and corporate processes will be funded by efficiencies in the technical services e.g. estate management and FM.

and realise benefits will come from a number of sources: o Reducing duplication in the redesign of the property delivery model; o Using third party suppliers to provide property and FM services for less cost; o Investment by strategic partners.

Support
Gross savings; in house option Efficiency saving Description 700K 2.3m Gross savings; with partners (joint venture or similar delivery model) 300k - 4.4m

Centralisation of all support services and the reengineering and standardisation of processes to drive a 3-10% reduction in the cost base

More efficient delivery of support functions through a private partner to drive 1-15% reduction in the cost base.4 Joint delivery/sharing of support functions with public sector partners Limited trading of existing support services

Key Questions

Do we have the skills and capacity to drive the necessary savings and improvements?

Early indications are that Barnet College would be willing to explore either being part of or buying their services from such a venture. Would this give us sufficient economies of scope and scale to justify the complexity involved in governance? How quickly could we get to stage where our support services are sufficiently low cost/high

4 The Audit Commission reported last year, having reviewed 14 SSP's (strategic service partnerships) worth 2.6billion, that councils should expect 1 to 15% cost saving through similar deals.

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performance to be trade-able on a large scale? How do we build a case when the track record of trading organisations is not good?

Correlation with Future Shape Tests

Weak; Is strategic and integrated and ensures that resources are targeted to achieve priority outcomes. However, still dealing with a single organisation paradigm. Savings will be limited 50% - 2009/10 50% - 2010/11 TBC

Strong: Establishing a joint venture capable of trading would interest other public sector partners in Barnet and beyond.

Realisable when? Costs to make savings

2011/12

TBC

Transact
Wave 1 and Wave 2 Efficiency saving5 Description 4m 5.8m Development of alternative delivery models (joint ventures, service outsourcing or shared services) for the identified services/service bundles. The adoption of a new delivery model will be subject to a strong business case being developed. Potential efficiency savings can be achieved from internal transformation in these areas. However, to achieve efficiencies of circa 10-15% on current operating costs, a new delivery model is required. Do we have the procurement and contracting skills as well leadership capacity to drive the necessary savings and improvements from the private sector? Is there the appetite both internally and externally for these different delivery models? Have we chosen the right bundles and wavings? How do we build a case when the track record of the private sector in delivering a number of these services has historically been weak? Would these new delivery models give us sufficient economies of scope and scale to justify the complexity involved in governance?

Key Questions

Figures have been identified by PwC and 4Ps analysis of recent deals secured by local authorities for these

services/bundles. Figures do not include income generation potential. These savings will need to be validated in developing business cases.

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Correlation with Future Shape Tests

Strong; Harnessing skills, capacity and innovation of a third party and particularly the private sector will lead to greater likelihood and acceleration of full benefits realisation, as well as more customer focussed services. Efficiencies and better value for the taxpayer will be delivered through economies of scale, service transformation and income generation. Better outcomes for the citizens of Barnet will be achieved by working more effectively with partners through a one public sector approach; the Council will be freed up to focus on its strategic and place leadership role as well as partnership building Wave 1 - between 2009-11 (the timescale for all Wave 1 services will be approximately 18 months from business case development to procurement, earlier in some cases such as Cem/Crem) Wave 2 - between 2009-2012 (the timescale for all wave 2 services will be a maximum of 36 months from business case development to procurement).

Realisable when?

Costs to make savings

TBC. At this stage the costs of establishing these new delivery vehicles has not been calculated. This will form part of the detailed business case for each service area/bundle

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Appendix 2: Risks
Risk Probability/ Impact Senior public sector management not completely aligned with partners, and scepticism exists around the successful implementation of these recommendations M H Clearly define business requirements Ensure clear understanding of, and commitment to, strategy Ensure strong leadership is present Allocate ownership and leadership responsibilities for each priority project, with appropriate empowerment to take forward the transformation Poor procurement and contracting skills as well as leadership capacity constraints in the council limiting the ability to obtain desired efficiencies and service improvements Timelines are overly ambitious in order to meet future shape objectives leading to perceived or actual project failure. Risks to reputation are high in certain areas if new delivery models fail to deliver required standards of service The degree of change is underestimated meaning that the organisation is not prepared for the implementation and resulting operation of new arrangements M H To be developed as part of future shape and as part of the public sector leadership development programme Mitigating action

Establish regular future programme management arrangements and update meetings to monitor progress and adherence to timescales Define contract right at start, including risk and reward criteria and manage, monitor and review regularly Provide clear and consistent communication Ensure communication is targeted appropriately at relevant stakeholders and addresses key concerns Build in change management capacity and shadow pilot areas for new delivery

Legal risks of breaching council standing orders and/or legislation/statutory obligations

Full assessment of statutory obligations Build this fully into contract and manage, monitor and review regularly

Councillors see new delivery models as eroding democratic accountability and local control

Benefits of increased responsibility and control from the one public sector approach clearly defined Addressed as part of the business

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Risk

Probability/ Impact

Mitigating action

case development Transact, Support, Property: High set up costs for shared services and joint ventures which impacts on the benefits of adopting a new approach Transact, Support, Property: Continued responsibility for staff if seconded, higher costs if TUPEd Transact: No market currently exists for the clusters of services under consideration Moving to a model where some Council services may be outside the full control of the Council may limit our ability to deliver required efficiencies in the long term M H M M H M M M Set up costs need to be established as part of the business case development

To be explored as part of the cost/benefit analysis in the business case development Work with providers to create market Allow flexibility with clusters Ensure we maintain the flexibility to deliver efficiencies required in any contractual arrangements made in going forward

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