Bolsover DC, Chesterfield BC and North East Derbyshire DC Board/20070320/Ag… · V1.1 Updated with comments from Mark Evans V Pollitt 10/01/2007 AT V1.2 Updated with comments from

Bolsover DC, Chesterfield BC and North East Derbyshire DC

Corporate Services Options Appraisal

Release: FINAL

Date: 24th January 2007

Author: Vicky Pollitt

Owner: Mark Evans

Corporate Services

Options Appraisal

Contents

1 Management Summary .................................................................................................. 4

1.1 Overview................................................................................................................. 4

1.2 Corporate Services .................................................................................................. 4

1.3 Recommended Option............................................................................................. 4

2 Introduction.................................................................................................................... 6

2.1 Purpose of the review.............................................................................................. 6

2.2 Layout of Document ............................................................................................... 6

2.3 Context for the review............................................................................................. 7

3 Approach...................................................................................................................... 10

4 What are the Councils looking to achieve?.................................................................. 12

4.1 What are the ambitions of each authority?............................................................ 12

4.2 What are the principles for collaboration?............................................................ 12

5 How can we deliver the Councils’ Vision?.................................................................. 13

5.1 Governance arrangements..................................................................................... 13

5.2 Long list of ‘service delivery’ options .................................................................. 15

5.3 Short list of options ............................................................................................... 16

5.4 Summary of the options available......................................................................... 28

6 Assessment of Options................................................................................................. 29

6.1 Assessment criteria ............................................................................................... 29

6.2 Options Appraisal ................................................................................................. 29

7 Recommendation and conclusions............................................................................... 33

8 Appendices: Detailed Services Assessment................................................................. 34

8.1 Service Evaluation ................................................................................................ 34

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Document Control

Control Details

Document

Location:

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Software:

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Author: Vicky Pollitt

Document Amendment Record

Issue Amendment Detail Author Date Approved

V0.1 Original draft V Pollitt 15/8/2006 AT

V1.0 Draft for comments A Thomson 19/12/2006 JN

V1.1 Updated with comments from Mark Evans V Pollitt 10/01/2007 AT

V1.2 Updated with comments from CEO Group V Pollitt 24/01.2007 AT

V1.3 Updated with comments from David Shaw V Pollitt 26/01/07 AT

V1.4 Final Draft V Pollitt 29/01/07 AT

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1 Management Summary

1.1 Overview

This review was commissioned by Chesterfield Borough Councils, North East Derbyshire and

Bolsover District Councils to identify the options for alternative service delivery of corporate

services as a partnership, and provide a final recommendation as to which option was most

likely to be successful.

1.2 Corporate Services

The services identified as being of a corporate nature across the three authorities were:

• Finance;

• Revenues and Benefits;

• ICT;

• Human Resources;

• Legal Services;

• Property Services;

• Customer Services;

• Commercial and Development;

• Communications

It was agreed that for the purposes of this review, those service (or parts of services) that

were of a strategic or policy setting nature and those which were unsuitable due to their very

nature (democratic services, mayoral office), would remain the sole responsibility of each

authority and were therefore excluded from the remainder of the review.

1.3 Recommended Option

Through a structured analysis of current local authority service delivery accompanied with

consultation with chief executives, directors and heads of service from each authority, the

scenario options were shortlisted:

• The creation of a single shared services unit supporting all three authorities. This unit

will be characterised by a single process for each service, a single management and

team structure for staff, ideally colocated (the feasibility of suitable property for shared

location has not been included within this review). This unit would be funded through a

pooled budget and set independent performance targets.

• The shared service unit has the option to involve the private sector in the following

ways:

o Large scale involvement of private sector through a long term strategic

partnership

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o Incremental involvement of private sector in delivery of specific service areas

as identified on a business case basis

o No private sector involvement

• Also, in order to provide the appropriate governance for the shared service unit, the

authorities had the following governance options:

o Governance by committee / board structure underpinned by legal

memorandums

o Governance through an independently created Joint Venture Vehicle with each

authority having an equal share of the Venture.

The following criteria were then applied to the options above to identify the most

arrangement for the delivery of the shared services unit.

Criteria Relative Weighting

Opportunity to reduce operational costs 5

Opportunity to improve customer experience 4

Opportunity to improve staff development 3

Opportunity to generate capital investment 3

Ease of Implementation 1

It was recommended that due to the lack of strategic congruence within the partnership to the

acceptability of long term large scale strategic partnership, it was recommended that the option

most likely to succeed in delivering corporate services in an alternative manner was:

• The creation of a shared services unit supporting all three authorities, characterised by

a single process for each service, a single management and team structure for staff,

ideally operating from a single location. This unit would be funded through a pooled

budget and set independent performance targets. Where it is identified as beneficial

through a business case, the private sector should be engaged to partner the unit in the

delivery of individual services.

• It is also recommended that this shared service unit is governed through the existing

shared working board arrangement with additional legal support to clarify the new

arrangements.

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2 Introduction

2.1 Purpose of the review

This review was commissioned through the East Midlands Centre of Excellence to appraise

the options available to Chesterfield Borough Council, North East Derbyshire District Council,

and Bolsover District Council to improve the delivery of Corporate Services through closer

collaboration.

The study was undertaken to help the three authorities:

• Develop a set of principles and objectives to be achieved from closer collaboration in

the area of Corporate Services;

• Agree a common set of services which define Corporate Services;

• Understand the long list of ‘delivery options’ for collaborative working;

• Develop a short list of ‘delivery options’ which are most likely to deliver the principles

and objectives as agreed, and indication of risk against each option;

• Agree a set of appraisal criteria and critically assess each option in order to identify the

preferred option for likely success;

• Provide an analysis of where the models have been applied in other local and regional

government scenarios and the benefits derived

We were not required to develop detailed financial costings or estimates of potential

savings.

2.2 Layout of Document

• Executive Summary;

• Introduction;

• Approach Undertaken;

• What are the Councils looking to achieve?;

• How can the Councils deliver the vision?;

• Assessment of options;

• Recommendation and conclusions;

• Appendices;

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2.3 Context for the review

2.3.1 Local Context

The three Councils occupy the northern geography of the Derbyshire sub region formed of

eight districts, the City and the County councils. They are a mixture of rural and urban areas,

with Chesterfield being the second largest town in the county.

Chesterfield BC Town Hall and North East Derbyshire Civic Centre are located within a short

distance of each other. Bolsover District Council has ward boundaries adjacent to both North

East and Chesterfield, with their Council Offices located around 6 miles from the other two

authorities.

Through this geographical proximity and desire to improve services, the Councils have a

history of joint working and this is one of a series of projects currently being undertaken.

Although politically there are differences between the authorities there appears to be a genuine

appetite for co-operation and collaboration.

In the context of this report the services currently delivered by the three authorities under the

title, ‘Corporate Services’ are:

• Finance;

• Revenues and Benefits;

• ICT;

• Human Resources;

• Legal Services;

• Democratic Services;

• Property Services;

• Mayoral Office;

• Customer Services;

• Policy, Performance, Strategy;

• Commercial and Development;

• Communications

2.3.2 National Context

Closer working and collaboration across Local Authorities and within the wider Public Sector

has been part of the Government agenda. The National Audit Office (NAO) in 2005 indicated

that there is significant scope to achieve efficiency savings through closer working, where front

and / or back office services are shared jointly across Local Authority departments or between

differing statutory agencies.

The general underpinnings of this agenda include: -

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• Satisfying increasing customer demands – overall need for greater effectiveness in the

delivery of public services in order to meet increasing customer demand;

• Achieving Value For Money (VFM) – increased pressure to meet externally set targets

and assessments required to demonstrate VFM in the use of tax payers money;

• Learning lessons from the private sector – the private sector has demonstrated through

the use of enterprise wide technology and appetite to realise efficiencies that shared

services, where appropriate, can deliver cost and operational improvements;

• Releasing scarce resource – principle of releasing cashable and non cashable resources

to be redirected form Back Office functions to Front Office services requires a

challenging view of service delivery

2.3.3 What does ‘collaborative working’ mean in this context?

In this context, collaborative working is recognised as a model whereby authorities come

together to improve service delivery (both front and/or back office) in a combined or

collaborative manner. This may involve sharing knowledge, staff, resources and skills with

other organisations, irrespective of whether the delivery model involves the public or private

sectors.

The principle of collaborative working is about optimising people and their skills, assets, time,

business processes and other resources in order to drive efficiencies. A collaborative

arrangement, regardless of the governance model under which it operates, can in theory handle

any business function effectively, as long as there is competent management to realise the

benefits from the arrangement and performance criteria that meets the needs of the ‘governing’

councils.

Within this arrangement, the functions are concentrated either geographically or virtually

through enabling technology and common governance arrangements. Any collaboration will

require funding through a pooled budget with all the partners or agreed recharging

mechanisms, and be accountable to its ‘governing’ councils, to which it would report on the

performance and outcomes achieved.

2.3.4 Characteristics of services appropriate for shared delivery

Typically, the services best suited to collaborative working and shared delivery:

• Are those which are common to all members of the partnership (it is possible to

provide services which are only pertinent to one or two authorities, however this would

need to be agreed through the governance structure as it will have an impact on the

resources required to deliver services, and if appropriate would have to be robustly

reflected and effectively managed in any contractual arrangements where a third parties

are involved);

• Have similar levels of activity across each authority

• Have a high volume of activity;

• Have a low level of complexity;

• Are transactional (e.g. rules based, standardised and repetitive);

• Are common / standard activities applicable to multiple businesses;

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• Are non strategic / policy setting;

• Are easy to separate out with minimal impact on other processes;

• Provide opportunity for performance improvement;

Therefore, services less appropriate for collaboration or shared delivery display the opposite

characteristics, e.g. low volume, highly complex, judgment based, derived from non standard

activities, are strategic or policy setting in nature, have little opportunity for performance

improvement, or have unequal levels of activity across each authority

2.3.5 Maturing Markets

Collaborative working and shared service delivery can involve a range of private sector

partners, the extent of which will be dictated by the strategy of the participating authorities. The

market for private sector delivery of local authority services is one that can be categorised as

‘maturing’ and in some areas as ‘mature’. A number of significant suppliers are active in this

market and are already operating a number of partnerships with individual authorities and also

with groups of authorities collaborating together.

This maturing of the relationship between the private sector and the public is reflected through

the move away from the private sector operating as a replacement for service delivery (or

outsourcing model) to one which is characterised as a strategic, or transformational,

partnership. This strategic partnership often reflects a greater participation of the private sector

to engage in more flexible contracting arrangements recognising risk/reward sharing, skills

transfer and capacity building within the public sector, alongside a greater understanding of the

challenges and pressures facing local authorities.

This has resulted in a move away from the historic confrontational contracting that

characterised early private sector involvement in public sector delivery, to a more collaborative

longer term partnership based upon greater mutual collaboration.

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3 Approach

The approach undertaken when carrying out the review is as set down in the Project Initiation

Document and summarised below:

Project Start Up

Vision

Service

Identification

Assessment of

Options

Recommendation

of Preferred Option

Output: Project Initiation Document

(PID)

Questions: What will the end state look

like?

What do we want to achieve

corporately?

What form may this vision

take?

How will the Councils be

different from now?

Questions: Which services from each Council provide

the best fit with the agreed vision?

How will differing services affect the

vision?

Questions: What are the criteria for assessment and

their individual weightings?

Outputs: Application of above to identify preferred

option(s)

Report and

PresentationOutputs: Production of final report and presentation of

findings

3.1.1 Consultation

Throughout this project a consultative approach was taken to define the parameters of the

project. As well as achieving consensus through workshops, consultation with staff members at

all levels (including Union Officials) was undertaken, and a collaborative e-Room was

provided for dissemination of information. All authorities were engaged at each stage in order

that balanced decisions were facilitated and achieved.

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3.1.2 Visioning and Service Identification phases

Meetings were held with each Chief Executive to contextualise the project and understand the

priorities for each authority. Following these meetings a Visioning workshop was held on 29th

June 2006 with members of Senior Management Teams and key members of staff. This

workshop formalised the priorities for the project, and began to define the scope of the services

defined as ‘Corporate’.

Following the workshops the services within scope were rationalised in terms of suitability

(based upon criteria such as volume, complexity etc) for a collaborative corporate services

function. Further details of the individual services (ICT systems used, potential barriers,

impending legislative changes affecting the service etc.) were obtained through an extensive

range of interviews with the Head of Service, or with a key member of staff. The result of this

generated a shortlist of corporate services with the best fit for collaborative working that was

agreed through workshop-based discussion.

3.1.3 Delivery Option Assessment, Risk Assessment and, Option

Recommendation phases

Workshops were held on the 11th September 2006 for Chesterfield BC and Bolsover DC, and

repeated on the 1st November 2006 for North East Derbyshire DC, involving the Chief

Executives and Senior Management, where the long list of service delivery options for

collaboration were presented and discussed. A consensus was achieved through discussion that

a number of options were less suited to delivering the aims and objectives, and were therefore

excluded from the remainder of the review. The subsequent shortlist of options were agreed and

taken forward for appraisal.

A final workshop was then facilitated whereby, through independent voting technology each

authority articulated their weightings for each appraisal criteria, and then scored each criterion

against the short list of options for collaborative working.

The analysis the outcomes and evaluations from the workshops where considered alongside

wider Deloitte market analysis formed the basis of the recommendations.

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4 What are the Councils looking to achieve?

4.1 What are the ambitions of each authority?

The primary question to be addressed in order to maximise the likelihood of success in

achieving greater collaboration in the delivery of Corporate Services is - what does each

authority want to achieve from the exercise and are any of those ambitions mutually exclusive?

Following discussions with the Chief Executive and Senior Management from each Authority,

the main areas of priority can be summarised as:

Chesterfield BC Achieve cashable efficiencies

Upfront inward capital investment, especially in

areas of Customer Access

Bolsover DC In tune with efficiency agenda (improving

services not just cutting costs)

Emphasis on improving customer experience

North East Derbyshire DC Improvement in quality of services delivered

Efficiencies reinvested to continue service

improvement

In addition, to the above, within the context of closer collaboration, it was agreed through

consensus with senior staff and Chief Executives at the Visioning workshop that the following

were the ambitions for any alternative service delivery:

Improved service delivery; improved staff opportunities and knowledge building/ transfer;

robustness of delivery; efficiency gains/ savings; inward investment.

(Please note at this stage the relative importance of each of these objectives to the partnership

was not defined.)

4.2 What are the principles for collaboration?

The following principles defining the premise of any collaborative working were also

agreed at the Visioning workshop:

• The implementation should be carried out at the same speed across all authorities,

creating a robust functioning three-way partnership;

• A Programme Board approach to governance is preferable;

• Adequate provision for agreements around policy change must be made.

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5 How can we deliver the Councils’ Vision?

The next stage of the review examined the range of options available to the partnership for

closer collaboration that would deliver the ambitions of the authorities, taking into

consideration governance arrangements and service delivery.

5.1 Governance arrangements

Any collaboration by the three authorities in the delivery of services will require appropriate

governance arrangements to be put in place.

The governance options for consideration are:

• governance by committee / board;

• governance through a Joint Venture Vehicle

Each is discussed further below.

5.1.1 Governance by Joint Committee / Board

One option for governance is through a committee, or board arrangement involving members

and officers from each authority.

If the authorities at any point wished to procure services from the private sector as a

partnership, one authority would be required to lead this procurement, as the joint committee is

not a legal entity in its own right and therefore cannot contract in its own right. In this case risk

management policy would have to be robust enough to facilitate effective supplier and contract

management, and would also need to ensure the risk of such a relationship was equitably shared

amongst the partners.

Governance by board is already being successfully applied across the partnership, in particular

through the shared audit functions.

The advantages of governance through a committee / board arrangement are as follows:

• Public partnership;

• Single arrangement for delivery of services;

• Partners do not take on additional responsibilities / legal duties;

• Procedures well established in Local Government law;

• Governance by Board already in operation across the three authorities

The disadvantages however are:

• Joint committee / board is not a separate corporate entity and therefore cannot contract

in its own right;

• Risk transfer;

• Potential for political sensitivities between partners;

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• Potentially slow to react and make decisions;

• There is an increased likelihood of management and staff being intrinsically linked to

the working practices of their original authority and therefore become restricted in

applying innovation and challenge to service delivery;

• Not legally possible to act as a trading unit to other public bodies on an income

generating basis.

5.1.2 Governance by Joint Venture Vehicle

This model represents a scenario where the three authorities create a separate legal entity

through a Joint Venture Vehicle (JVV) with the specific purpose of delivering corporate

services back to all three authorities. Each authority would have an equitable distribution of

governance rights (including risk sharing), which would also enshrine redistribution of any

income generated if the JVV provided services to others on a fee-generating basis.

Resources would be owned by the company, and staff transferred through TUPE arrangements

to be employed by the JVV.

Any procurement from the private sector, either for goods or services, required for the delivery

of services would be undertaken by the JVV, as opposed to a lead authority through the

committee arrangement.

However, depending upon the nature and value of the services to be provided by the JVV back

to the authorities, the appointment of the JVV itself may be subject to EU procurement law.

Therefore, two procurement exercises may be required, one for the procurement of the JVV as

the procurement (or delivery) vehicle for the partners and one for the supply of services by any

private sector provider if required. Legal advice should be sought in this area by the

partnership.

In summary, the advantages of shared services managed through a JVV arrangement are as

follows:

• Distinct legal entity;

• Tailored solution;

• Sustainability;

• Risk sharing;

• Clarity of accountability;

• New body avoids history of departmental practices

The disadvantages however are:

• May have to procure JVV in open competition under EU procurement regulations;

• Political sensitivities of local authorities in involvement of a JVV;

• Takes time to set up;

• Ongoing arrangements to be managed and financed, including company filing requirements

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5.2 Long list of ‘service delivery’ options

The long list of service delivery options available to the partnership are presented below across

six broad areas of collaboration along a spectrum of alternatives moving from left to right as

the degree of collaboration and organisational change increases:

• No Collaboration – Each authority achieves their strategic ambitions through

pursuance of their own ‘improvement programme’ projects with no collaboration as a

partnership;

• Advisory Role – non-binding agreement across all three authorities to work closer

together to provide knowledge sharing and operational advice in the area of corporate

services. Service Delivery remains the responsibility of each authority;

• Single Service Agency – The delivery of individual corporate services is provided on

behalf of all authorities by the Authority which is the ‘best placed’ to provide that

service. In effect, each authority acts as a service delivery agent on behalf of the others.

A matrix of corporate service delivery will result;

• All Service Agency – All corporate services are provided by one Lead Authority on

behalf of the other Authorities. In effect, one authority will be the sole agent for all

corporate service delivery across the partnership;

• Autonomous Shared Services unit – Corporate Services are delivered through an

autonomous delivery unit, with a single process for service delivery replacing the three

authority processes under a single management structure. This model would require the

creation of a single delivery unit for corporate services and the amalgamation of staff,

resources and budgets to deliver the services. This would also require process re-

engineering exercise to ensure there is a harmonisation of processes. This unit would

be set performance and budgetary targets to reach, which would be monitored through

the governance structure discussed above. Services can be delivered through a range of

options:

o Public partnership: The shared services unit is created and resourced from

within the partnership;

o Mixed public and private sector delivery: The private sector is engaged to

deliver specific services (identified on a business case by business case basis)

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on behalf of the partnership, with the remaining services delivered within the

partnership;

o Private sector service delivery: All corporate services are delivered through a

private sector partner under a large-scale partnership arrangement.

5.3 Short list of options

The above long list of options were then analysed to identify a shortlist, which were most likely

to fit within the agreed ambitions and principles for partnership.

The following delivery model options were agreed through workshop discussions on 11th

September and 1st November as less appropriate in terms of the partnership and have therefore

been excluded from more detailed consideration:

• Collaborative Advisory Facilitation;

• Single authority providing individual services on behalf of others;

• Single authority providing all services on behalf of others;

It was felt that these models did not provide an adequate opportunity to achieve significant

change, nor would the agency arrangement be politically acceptable as this could be interpreted

as some form of delegation of responsibility to another authority, which is contrary to the

intentions of the review.

The shortlist of delivery models for detailed consideration is therefore:

• Autonomous Shared Services unit governed by either committee / board structure or

JVV with services delivered through either:

o Delivery Option 1: Large scale strategic partnership with the private sector

(100% private sector delivery of services);

o Delivery Option 2: Public, public, public partnership (100% council delivery)

o Delivery Option 3: Mixed public and private sector (private sector involvement

on a service by service basis);

The potential benefits to be derived from an autonomous shared service unit are summarised

below:

• Perceived independence of management;

• The opportunity to reorganise services around the customer and rethink or redesign the

way that councils do business;

• Reduced cost – management overheads, ICT, process re-design;

• Shared skills across all authorities;

• Greater resilience from a wider base and more staff with key skills or the specific

services;

• Increased efficiencies from standardised processes and technologies;

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• Economies of scale;

• Common ICT and shared platforms;

• Shared training and development opportunities for staff;

• Improved commercial bargaining power for any subsequent procurement from the

private sector; and

• A foundation for trading or expansion to other councils.

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5.3.1 Delivery option 1: Large scale strategic service delivery partnership

This option would involve the authorities engaging with a single private sector partner in the

large scale delivery of all appropriate corporate services at one time. This would represent the

most significant degree of change, both operationally and culturally.

The most common arrangement for partnership with the private sector is for strategic elements

of corporate services to remain within the remit of the Council, with a large scale transfer of

transactional services to private sector provider, with required staff either transferred across

under TUPE arrangements, or on a secondment basis.

This model requires a strong contracts management team on behalf of the client (either the JVV

or the lead authority under committee arrangements) and performance management clearly

defined and linked to payments.

The last few years have seen a movement away from the traditional outsourcing relationships

based on merely the provision of services, towards strategic partnerships where both parties

work together to achieve common aims. In order for this type of relationship to prosper it is

vital that the authority manages the supplier relationship effectively, devoting dedicated

resource to contract and performance management in order to minimise the risk of such an

arrangement, whilst maximising the value.

5.3.1.1 Which corporate services would be the best fit for large scale strategic service

delivery partnership?

Due to the premise that the commercial business case for the private sector is based upon

creating efficiencies by process redesign and economies of scale, the larger the number of

services included within the contract, the more attractive the proposition for the private sector

and therefore the better the contract to be negotiated with the partnership.

Therefore basket of corporate services for consideration within this option are:

• Finance;

• Revenues and Benefits;

• ICT;

• Human Resources;

• Legal Services;

• Property Services;

• Customer Services;

• Commercial and Development;

• Communications

5.3.1.2 What would this option mean for the three Authorities?

Depending on the arrangement agreed contractually, and the internal controls in place within

the authorities a large scale strategic delivery partnership with the private sector could lead to a

variety of advantages for the partner authorities, such as:

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• Inward capital investment;

• Skills transfer;

• Capacity building;

• Innovation;

• Transfer of operation risk of delivering efficiencies

However, this style of partnership is based on commitment from all parties to a long term

agreement (usually around 8-12 years). Although there is much evidence to suggest that

efficiency gains and process improvements are achieved in the short/ medium term, there is less

evidence to support long term success. Success is predicated upon political and operational

support, not simply to a strong business case in the short term, but also to working closely and

to building a robust yet dynamic supplier relationship with the delivery partners, facilitating

flexibility and developing the relationship to build on initial achievements.

In effect implementing such partnerships requires substantial cultural change – both

operationally by, for example, developing strong contract and supplier management capability;

building mature upward and downward communication networks to facilitate speed of issue

resolution – and strategically, sacrificing, to some extent, control of service delivery; working

in collaboration, not only with public sector partners but also with the private sector, which will

require acceptance and support of different cultures and objectives.

Furthermore by implementing a strategic delivery partner relationship collaboratively, the

complexity involved is amplified. There must be strategic congruence between all partners, as

without this successful delivery risks being negated due to a lack of common objectives and

divergent needs. There must be a clear and agreed definition of what the partnership wants to

achieve, in other words what ‘success’ would mean both mutually and individually, coupled

with an appetite for change which is strong enough to enable the culture shift needed to make

such an arrangement work.

In the case of Chesterfield, North East Derbyshire, and Bolsover such harmonious aims do not

appear to exist in this area of corporate services, moreover the appetite for cultural change

within the individual authorities does not appear to be equally strong. With such a divergence

in positions it would be highly difficult to implement a large scale delivery partnership which

would generate equal success for all parties.

5.3.1.3 Examples of application of this model elsewhere

The information stated is not verified, taken in good faith only and is in no way endorsed by

Deloitte

Authority Partner Services

Sheffield City Council Liberata ICT; Revenues and Benefits;

Exchequer Services inc.

Payroll, Sundry Debtors,

Creditors; Customer Services

inc. Contact Centre and

Reception Points

Blackburn with Darwin

Borough Council

Capita Revenues and Benefits;

Finance Administration;

Highways; Property Services;

Human Resources; Payroll;

ICT

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Linconshire County

Council

HBS Finance; Human Resources;

Property Services; ICT;

Catering

Mendip District Council Capita Revenues and Benefits;

Finance and Accounting;

Payroll; Elections

Management; ICT

Thurrock Council Vertex ICT; Revenues and Benefits;

Customer Services; Property

Rationalisation Strategy;

Human Resources

Rochdale Borough Council Agilisys & Mouchel

Parkman

Customer Services;

Highways and Engineering;

Payroll; ICT; Property

Management; Regeneration

Strategy

Middlesbrough Council HBS Revenues and Benefits;

Customer Services; Human

Resources; ICT; Property

Management

London Borough of

Bromley

Liberata Revenues and Benefits;

Payroll; Pensions

Administration; ICT Services

(Source Liberata website; HBS website; Agilisys website; Capita website; SOLACE;

Blackburn with Darwen website)

Detailed Case Studies:

The benefits and information stated below are not verified, taken in good faith only, and are in

no way endorsed by Deloitte.

Pendle Borough Council

In 2005 Pendle Borough Council outsourced the majority of their Corporate Services to

Liberata, with 150 employees transferring via TUPE to the provider.

Services outsourced were: ICT; HR and Payroll; Property Services; Revenues and Benefits; and

Customer Services. In 2006 this partnership was awarded Beacon status as an outstanding

example of Public Private Partnerships.

The contract implemented was for 15 years and is managed through Pendle’s internal

procurement team. The contract contains service targets developed from the authority’s own

delivery plan.

This arrangement to date has enabled the authority to cut costs by almost 10% and has also

enabled regeneration of the town centre, with their partner constructing a 50,000 sq ft new

business centre, and creating 300 new jobs within the area.

Whilst we are unable to comment on the costs associated with this partnership, the authority

has indicated significant benefit associated with this implementation.

As this partnership develops the potential for collaboration with other local authorities is high,

and the expansion of the arrangement likely to follow a similar route to the Barrow in Furness

partnership, which has been incremental and focused on specific activities (Revenues and

Benefits in particular). (Source Liberata and Pendle DC)

Corporate Services

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21

5.3.2 Delivery option 2: Public partnership service delivery

This would involve the three authorities creating a semi autonomous shared services unit that is

managed and delivered as a partnership, with no private sector involvement.

5.3.2.1 Which corporate services would be the best fit for three-way public partnership

shared delivery?

Whilst the ‘basket’ of corporate services under consideration are clear when a large scale

private sector delivery partnership option is pursued – all corporate services which are regarded

as non strategic, the services to be included within a three way public partnership delivery unit

are less clear.

It is necessary to reduce the long list of corporate services, stated in paragraph 2.3.1, to a short

list of target services that display the characteristics of services most likelihood to generate the

required efficiencies. Furthermore the assumption has been made that all services considered

for the short list should be of equivalent volume and consume equivalent resources, in order to

facilitate corresponding benefit and requirements equally across the partnership. Implementing

services with unequal levels of activity across the councils will restrict the efficacy of the

partnership as each authority will have an unequal interest in the services administered.

Therefore in the short to medium term the authorities should look to incorporate services of

equivalent volume and resource need. Through consultation with Chief Executives, Heads of

Service, and key members of staff via workshops and analysing each service in terms of this

assumption, and the shared service criteria, the following key corporate services show the

greatest potential to be delivered jointly:

• Revenues and Benefits;

• Customer Services;

• Finance;

• ICT;

• Human Resources;

• Legal Services

Each of these service areas were then analysed through data gathering and interviews with key

personnel to identify any subsequent factors, which may impact upon their suitability for

incorporation within a shared service unit. The factors considered were:

• Systems – which primary systems are used for the delivery of the service;

• Current Levels of Collaboration – what, if any, collaboration is in place currently, and

whether this collaboration is formalised or not;

• Process Complexity – how bespoke the process are to the individual authorities, and the

level of specialisation associated with undertaking the service;

• Barriers to Collaborative Working – barriers include awaited or recently implemented

legislation; non-comparative resourcing; political pressure for non-inclusion;

• Drivers for Collaborative Working – drivers include need for investment; large appetite

within each authority; political pressure for inclusion; comparative resourcing models;

Where all three authorities use the same IT systems, are currently already involved in

formalised collaboration, process complexity is relatively low, transaction volumes are high,

barriers low and drivers high they were seen as highly suitable for inclusion in a shared services

arrangement. Similarly where these ratings did not apply or were only applicable to some

Corporate Services

Options Appraisal

22

degree a lesser rating was applied. The detailed results of this analysis can be found in

Appendix 1.

5.3.2.2 Implementing a three-way public partnership

There are certain decisions which would have to be made in order to minimise the risk, and

maximise the value associated with such a change. In simplistic terms there are two ways to

implement this option:

• Big Bang – all appropriate services are implemented within the delivery vehicle in one

phase. This option means that change is implemented relatively quickly, and major

results or benefits from this change are also realised relatively quickly. Conversely,

however this approach may also prolong some benefit realisation as ‘quick wins’

would be included with the main implementation and would not be actionned in the

short term. For this to be successful there must be a large appetite for change across the

individual authorities along side robust programme and change management processes.

The risk profile of such a change is high and this can lead to staff unrest as well as

potential initial delivery problems multiplied across all included services.

• Phased Delivery – appropriate services are implemented within the unit on a phased

basis. This option spreads the risk of implementation across a whole programme of

deliveries, and allows the organisation to adjust to the change over time rather than

necessitating an immediate revolution in process, culture etc… This however would

also require strong programme management in order to ensure that the impetus for

implementing individual projects is maintained and that the transformation keeps to

schedule, avoiding unnecessary management of change issues.

Although not risk averse, in terms of risk appetite the three authorities are seen to be moderate.

Moreover the lack of project and change management expertise available internally would

restrict the perceived ability to implement using a ‘big bang’ approach. A phased approach to

implementation is therefore recommended in this instance. The recommended phasing of

services is outlined below.

5.3.2.3 Phase One Services

Phase one is made up of Revenues and Benefits and Customer Services. This also includes

supporting ICT, These services have been chosen as they provide areas of multiple process

transactions, but also high volumes of activity thus indicating healthy opportunities for

collaboration within corporate services.

To include these services within a shared services unit would require substantial process re-

engineering, however both services offer reduced complexity for integration through having

similar systems and in the case of Customer Services advanced collaboration with North East

Derbyshire and Chesterfield.

CORE 1 Phase 1

Revenues and Benefits

Customer Services

ICT

Corporate Services

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5.3.2.4 Phase Two Services

Phase two is made up of the services that provide less immediate opportunities for

collaboration in terms of volume and process complexity, and may also hold some barriers to

inclusion such as imminent legislation, or requirements for substantial process re-engineering

and system integration. However these barriers are balanced by reasonable appetite for

inclusion and in most cases some already established collaboration.

The services suggested for this phase are: The remaining ICT functions – Helpdesk and

Disaster recovery management; Human Resources services – Training co-ordination,

Recruitment administration, Health and Safety and Equalities; Finance – Payroll and Insurance

services; and Legal Services – Land Charges.

This phase of integration should take place after Core 1 and will further establish the co-

operative practices between the authorities.

5.3.2.5 Additional Service Considerations

Phase 2

Human Resources

Finance

ICT

Legal

Phase 1

Revenues and Benefits

Customer Services

ICT

ADVISORY ADVISORY

Project Management; Knowledge Management;

Legislation Guidance

Phase 2

Human Resources

Finance

ICT

Legal

Phase 1

Revenues and Benefits

Customer Services

ICT

Corporate Services

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24

The ‘advisory’ element is devised from a selection of services where collaboration could be

provided on an ad hoc basis. These should enable further economies of scale through reduced

need for the individual authorities to resource the services, furthermore they should facilitate

improved efficiency and effectiveness across all departments through better knowledge sharing,

and access to specialised capability.

This phase of services could be implemented at any point in the development of the corporate

services unit.

5.3.2.6 What would this mean for the three Authorities?

A public/ public/ public partnership would provide the opportunity to achieve collaboration

between the partners, without the associated contractual, reputational and implementation risks

associated with a large scale strategic delivery partner relationship. It is an option that, although

requires a certain amount of culture change, there is not the necessary paradigm shift in

strategic and operation ethos that involving the private sector in significant delivery alliances.

Through this delivery option the three councils would be able to achieve efficiencies, via

knowledge transfer, development of effective processes, and reduction in duplicated effort by

effective use of resources. All efficiencies gained would be retained by the individual

authorities – where as with private sector partners these would be achieved and kept by the

delivery agent (i.e. the private sector partner). Furthermore the authorities would be able to

retain control of the delivery of services, and there would not be the requirement for, and

additional complexity involved with, robust contract management.

However as with the first option there are drawbacks in terms of suitability for the three

authorities. The need for rigorous performance management is still apparent, as the unit must

be able to demonstrate success, in terms of the needs of the individual authorities, and be

sufficiently flexible and reactive to resolve issues efficiently. There is more scope in this model

for achieving disparate objectives as the control lies solely with the individual authorities,

however this lack of congruence could restrict the success of the partnership to some degree.

Following from discussions held with the partner authorities it is apparent that there may not be

the impetus and knowledge within the authorities in terms of project and programme

management, process re-engineering skills, change management, for example, to facilitate and

implement such a change within the authorities. There may also be a need for independence

and separation from the partner authorities in defining and operationalising the model in order

to make the change as effective as possible. This concern would also stand true in terms of the

sustainability of such a delivery model where the need for best practise experience and

innovative skills is necessary to maintain momentum and benefits across the partners.

5.3.2.7 Examples of application of this model elsewhere

The details stated below are not verified and taken in good faith only, and are in no way

endorsed by Deloitte.

Partnership Services

Norfolk Connect Partnership (8 Councils

inc. Districts and County)

ICT; Customer Contact

Association of Greater Manchester

Authorities

Procurement

(Sources Local Government Chronicle; Norfolk Connect Website)

Detailed Case Study:

The benefits and details stated are not verified and taken in good faith only, and are in no way

endorsed by Deloitte.

Corporate Services

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Consortium of North West District Councils

Established in 2001 this consortium of 5 authorities has implemented joint consultation and

procurement services. The partnership is not a legal entity, moreover it is a collaborative

enterprise governed by committee and board. The partnership has its own budget, targets and

performance indicators on which they report monthly to the Governance Board and the funds

are mainly derived from an annual subscription fee each authority pays, however this funding is

often increased through income generating initiatives via external organisations such as the

Regional Centre of Excellence.

When procuring services or goods the partnership cannot issue contracts on behalf of the

authorities. A lead authority is usually appointed and standard terms and conditions for all

authorities agreed, however each authority will have their own contract with the supplier, or

else a framework contract is implemented. However, this arrangement is complex and this can

lead to prolonged procurements and benefit achievement timescales. Legally this is also

potentially restrictive for suppliers as each arrangement could mean multiple contracts and

contract managers. Furthermore to achieve these benefits large input from the private sector in

terms of advisory services has been required.

The authorities involved have enjoyed a substantial amount of benefit through Economies of

Scale (both cashable through increased buying power, and non-cashable through reduced input

need), as well as improved services and processes both for the individual authorities and the

customer. Indeed the partnership has gained local and national recognition for both services.

Over the past 5 years, since its inception, the individual partner authorities have achieved

between a 5 and 30% saving across both the procurement and consultation services.

(Source Consortium’s Website)

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5.3.3 Option 3: Three-way Public Partnership with Private Sector Involvement

on Service by Service Basis

A Public partnership can involve the private sector on an incremental basis, combining service

delivery between in house provision and outsourced services. This way the involvement of the

private sector can be procured on a service by service basis depending upon need, with the

remaining services being delivered as a partnership of authorities.

5.3.3.1 What would this mean for the three Authorities?

The three-way partnership as described in Option 2 would be established. However, in addition,

services would be further analysed in terms of delivery options. Business cases for each service

would be undertaken, referencing internal capability, value for money, current performance,

best practise and cost (building on the analysis already undertaken). This will allow the

partnership to establish which services should remain in house within the shared service unit,

and which services are appropriate for delivery through the private sector.

This would facilitate a robust approach to maximising value, whilst also overcoming much of

the complexity associated with the disparate aims of the three authorities. Where strategic

partnerships require very long term delivery agreements, this option would allow the authorities

to develop relevant contracts with the most suitable and best value suppliers for individual

services; and where appropriate services will remain in house thus maintaining knowledge and

capability within the authorities. Where skills or knowledge are not available in house

procuring this resource externally would enable the development of internal capacity and

knowledge, this should also improve capability across the authorities (not just in that particular

service area) helping the authorities to capitalise on thebest staff, establishing best in breed

service provision.

This option obviously means that the partnership would potentially have to undertake multiple

procurements and as such the cost of procurement would increase. There is also the risk that

due to the lower level of services indicated within the ‘basket’ for private sector involvement

there may be a reduced level interest from the private sector. However procuring private sector

partners for individual services is not unusual and many of the service agreements in operation

currently are based around the delivery of few services rather than all corporate services

together.

Strong contract and relationship management is once again required in order to maximise value

and minimise risk. The measuring and monitoring of all services – whether provided internally

or externally is vital to the success of this model. Where expected levels of achievement and

benefit are not being achieved in a certain service, analysis of processes / performance must be

undertaken by the partnership to resolve any issues and generate successful delivery.

Political and operational support is again necessary to enable successful transformation.

However, unlike the large scale delivery partnership, entering into agreements with multiple

providers based on specific business cases and implementing suitable contracts with

appropriate suppliers, coupled with keeping core services in house where necessary should

build service provision which is both robust in terms of delivery as well as being robust in

terms of business case and appropriateness for the authorities.

5.3.3.2 Examples of application of this model elsewhere

The information stated below is not verified, taken in good faith only, and is in no way

endorsed by Deloitte

Authority Partner Services

Hertforshire County

Council

Amey PLC and

Mouchel Parkman

Highways and Streetlighting

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Suffolk County and Mid

Suffolk District

BT Customer Services; Financial

Services

Essex County Council Nabarro Nathansons Legal

Rossendale Borough

Council

Capita Revenues and Benefits;

Customer Services

Stirling Council Dundas and Wilson Legal

Birmingham City Council Vertex Customer Services

Birmingham City Council Capita ICT

AGMA TBC Currently scoping joint

delivery of Revenues and

Benefits

Detailed Case Study:

The benefits and information stated are not verified, taken in good faith only, and are in no way

endorsed by Deloitte

Background

Liberata have partnered Barrow in Furness Borough Council in the Revenues and Benefits

services. This service has now been extended to 5 other local authorities ( London Borough of

Southwalk, London Borough of Houslow, North Somerset District Council, Swindon Borough

Council, and Trafford Borough Council), as well as providing ICT support to Redcar Council.

This arrangement has delivered significant benefits to each authority, namely annual

improvements in collection rates, with the service now performing in the upper quartile.

Furthermore processing improvements have also been achieved, with processing time being

reduced by 117 days on average at London Borough of Southwalk, for example.

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5.4 Summary of the options available

In summary, the options available to the Councils, which will provide them with the most

likelihood of successfully achieving the aims of the partnership, are as follows:

5.4.1 Governance

Creation of a semi autonomous shared services unit across the three Authorities. This unit to be

governed by either:

• Committee or;

• Joint Venture Vehicle.

5.4.2 Service Delivery

Services to be delivered by either:

• Large scale private sector partnership - encompassing as wide a range of non-

strategic corporate services as possible;

• Public partnership – all services delivered by common resources via shared

services unit provided by the partnership. Phased approach to creation of unit

involving:

o Phase 1 services:

� Revenues and Benefits;

� Customer Services;

� Supporting ICT;

o Phase 2 services:

� Human Resources;

� Finance;

� ICT;

� Legal;

• Mixed public and private sector delivery – services selected on a business case

basis for provision by private sector. Remaining services remain under public

provision through shared service unit

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6 Assessment of Options

6.1 Assessment criteria

The criteria with which to assess the suitability of short-listed service delivery models to meet

the partnerships strategic objectives were agreed through workshops and stated below:

• Opportunity to improve customer experience –

Access to best practise / improved access channels; ability to provide consistent

excellent customer service, flexibility of the structure to respond to demand;

• Opportunity to improve staff development –

Access to appropriate and best practise training; access to knowledge and

knowledge leaders via knowledge management processes; robust career paths

and career management processes; ability to attract and keep high quality staff;

• Opportunity to generate capital investment

Investment prospects in facilities (including buildings, kit etc); technology;

• Opportunity to reduce operational costs

Ability to implement improved processes and technologies; ability to reduce

inefficiencies; ability to take advantage of economies of scale and reduce

replicated processes;

• Ease of implementation

Low relative cost; high speed of implementation; low relative resource

requirements and need for specialist resource; low relative levels of process

complexity;

6.2 Options Appraisal

We facilitated a workshop, held on the 6th December 2006 and attended by Chief Executives,

Deputy Chief Executive and heads of service from each authority. A facilitated appraisal of the

short listed governance and delivery options was undertaken with each authority feeding back

into the group through the use of voting technology their consensus view. Each authority was

asked to weight the assessment criteria and then to score the relative opportunities provided by

each delivery option in meeting the criteria.

This exercise provided a consensus view of the parameters within which the Councils will be

able to succeed in working together.

6.2.1 Governance options:

Through discussion at the workshop it was confirmed that a working board arrangement was

already in place governing the delivery of certain collaborative services across the three

authorities. This Board already had memoranda and legal underpinnings to share equitable risk

in the event of one authority leading any procurement on behalf of the others.

With this in mind, this established governance arrangement should be extended to include any

shared corporate service delivery function. Discussions should be undertaken with the

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appropriate legal teams to ensure these additional roles and responsibilities are understood and

accepted by each authority.

6.2.2 Service Delivery Options

6.2.2.1 Criteria weighting

During the workshop, each authority was asked to weight each criterion on a score of 1- 5, with

5 being the most important to them and 1 being least important. The results are shown below.

Criteria Relative Weighting

Opportunity to reduce operational costs 5

Opportunity to improve customer experience 4

Opportunity to improve staff development 3

Opportunity to generate capital investment 3

Ease of Implementation 1

This clarifies that for the three Authorities reducing the operational costs of service delivery

was the most important criteria, with improved customer service behind that. Staff development

and opportunities to generate capital investment following. The ease of implementation of the

model was the least important criteria to the Councils.

6.2.2.2 Scoring the options

Following the agreement of the weightings, each authority then scored the options against the

criteria. These scores were amalgamated and multiplied by the weightings to derive a

consensus view of which option could be successfully achieved together.

The results of the appraisal of each option are shown below:

Opportunity

to improve

customer

experience

Opportunity

to improve

staff

development

Opportunity

to generate

capital

investment

Opportunity

to reduce

operational

costs

Ease of

Implement-

ation

Total

score

Public, Public,

Public

partnership

52 27 18 55 9 161

Part public,

part Private

partnership

36 30 27 65 7 165

Large scale

strategic

private sector

partnership

20 21 42 50 7 140

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The workshop identified that across the three Authorities, the option which has the greatest

consensus as to its likely success in delivering the objectives, is a shared service unit which

delivers services through a public partnership but engages with the private sector , where

necessary, to deliver individual services identified on a business case basis.

This is closely followed by a shared service unit delivered through shared public sector

resources provided by the three authorities.

The option of engaging with the private sector through a large scale partnership was considered

by the group the least likely to deliver the required objectives.

The obvious ‘outliers’ in terms of the scoring, which require some interpretation are:

• Significantly lower customer experience through the large scale strategic partnership:

This is often cited as a weakness for private sector involvement due to the cultural

differences and ethos between the two sectors. The argument extends that the larger the

private sector involvement the more apparent these differences are especially in front

office services. Whilst historically this argument held more weight in earlier strategic

partnerships, the more recent ‘intelligent’ partnerships between the public and private

sector can manage this risk. However there is clearly a more significant degree of

cultural challenge in a large scale partnership, which whether perceived or actual is

likely to have an impact upon the customer experience.

• Opportunity to generate capital investment: One of the clear attractions of long term

partnerships with the private sector is their ability to provide investment in capital

infrastructure which may not be available through the partnerships funds. This

investment is likely to correspond to the size and length of the contract entered into. A

large scale, long term partnership is likely to generate greater capital investment than a

piecemeal service by service arrangement.

• Opportunity to reduce operational costs: Reduction in operational costs requires

redesign of process, structures and targets alongside managerial innovation. These

techniques can be applied by the introduction of the private sector, or through in house

capabilities. It should however be recognised that within a private sector led efficiency

drive the reduced operational costs will be achieved to maximise the profit generated,

and depending upon the contract likely to be retained by the private sector. Within a

public arrangement any efficiencies are retained inhouse.

Whilst it is recognised that the workshop outcomes are tempered by differing degrees of

experience in alternative service delivery by the attendees, the outcomes where consistent with

findings gathered earlier in the review, both through individual interviews and group working

facilitated by Deloitte.

6.2.2.3 Final appraisal of options

Through the workshops and wider observations it is possible to conclude:

• There is a clear opportunity (an appetite) to achieve efficiencies through operational

scale and process redesign by the creation of an autonomous shared services unit which

provides corporate services back to each authority.

• The partnership does not display a strong enough appetite as a group for the

involvement of the private sector in the form of a large scale strategic partnership,

however is not adverse to the private sector involvement per se. In addition it is

recognised that the partnership may lack internal skills to manage process redesign etc

that would be required to deliver efficiencies.

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With these factors in mind, it can be recommended that alternative service delivery for

corporate services is pursued through the creation of an autonomous shared services unit

which combines services from across the three authorities into one team with consistent

processes and single management structure. Where necessary a partnership is entered into

with the private sector to deliver individual services, where a business case identifies a

clear need to do so. This is an incremental use of the private sector rather than a large scale

strategic partnership.

However, with this in mind the recommendation need to be considered against each individual

authority’s strategic priorities.

6.2.2.4 Consideration against individual authority’s strategic aims:

As stated above, as a partnership the option most likely to succeed in achieving alternative

delivery of corporate services which achieves the agreed criteria is a shared service function

delivered with a mixed public and private partnership, however achieving these will require:

• strong internal project management skills;

• internal process redesign and benefits realisation skills;

• internal change management and communication skills

If these skills are not available internally across the three councils it will be necessary to

procure additional support in this area. Without a strong application of these skills, this option

will be unlikely to deliver the required benefits.

However it is also recognised that this option may restrict the opportunity for generating inward

capital funds for investment in service delivery, as it may be perceived by the private sector as

a restricted opportunity and therefore not as economically attractive as a large scale partnership.

As ultimately there is no consensus amongst the partners in terms of the relative importance of

inward capital investment, this option may not go far enough by itself for those authorities

which consider inward capital investment as a primary importance, and it may therefore be

necessary in this case for those authorities to pursue a large scale private sector partner that will

deliver in this area on an individual basis.

If this situation did arise, and one authority within the partnership wished to enter a large scale

strategic partnership independently of the others, it would be recommended that this authority

names the other authorities as potential partners in the OJEU procurement process, which

would allow the agreed contract to be extended to include the others as future partners without

having to enter into a separate procurement exercise.

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7 Recommendation and conclusions

As a result of the options appraisal it can be concluded that:

• Governance: governance arrangements supporting closer collaboration should be

conducted through the existing board arrangements, with necessary additional legal

underpinnings to ensure appropriate risk sharing is drawn up;

• Delivery: As a partnership the option of closer collaboration is most likely to be

achieved through the creation of a shared services unit with any private sector

involvement brought in on a service by service basis based upon business case

decisions:

o In order to maximise the opportunities inherent within this model, the

partnership will need to equip itself with appropriate project management,

change management, process re-engineering and communication skills. These

skills should be drawn from internal resources if available, or provided through

external support if necessary;

o It is acknowledged that this option may not deliver the necessary inward

capital investment to meet each authorities strategic aims. Discussions should

therefore be held as to whether individual authorities wishes to pursue a single

procurement of a large scale private sector partner. In this instance it would be

recommended that this authority name the other authorities as potential

partners within the OJEU notice, to ensure that any contract negotiated can be

applied to the others without having to enter into a separate procurement

exercise if they wish to enter into this arrangement at a date in the future.

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8 Appendices: Detailed Services Assessment

8.1 Service Evaluation

The following service assessments refer to the main services offered by departments across all

three authorities and in some cases do not include all services. Where a service is not listed

only one or two of the authorities undertake it and it is also seen as a very low volume activity.

8.1.1 Revenues and Benefits

Service Scope; Process and Delivery Complexity:

The services operated within Revenues and Benefits are:

� Council Tax; � NNDR; � General Income collection; � Debt / Non-payment management; � Litigation; � Bailiff Services

Whilst Council Tax, NNDR, General Income collection, and Debt / Non-payment

management are seen as appropriate for a joint corporate services delivery due to their

relative low process complexity. Although certain aspects of policy may differ between the

authorities and these will have to be considered in delivering a combined service.

Litigation poses some difficulties as this aspect of the service is seen as specific to the

individual authority, and legally would pose problems, as generally this would be governed

by the particular policy of the organisation. Bailiff Services are currently, in all cases,

outsourced and are thus excluded from this phase of investigation.

Whilst Chesterfield BC operates all aspects of delivery directly through their Revenues and

Benefits Department with much of this transferring to Customer Services in the near future;

Bolsover (Face to Face services) and North East Derbyshire (Face to Face and Telephony)

already engage their Customer Services Departments to facilitate the delivery of some

aspects of the service.

Volumes: Typically mainly due to the volume of transactions, Revenues and Benefits would make up

the core of any Corporate Services delivery, and this is true of the situation within all three

authorities here. All three operate multi-access channels with reasonable volume of activity

through each – although on-line payment options are still fully to be adequately taken

advantage of. There is no use, at present, of 3rd party payment providers such as PayPoint

outlets

Systems:

Both Chesterfield and Bolsover are using the Academy system to provide the service, whilst

NE Derbyshire are in the process of implementing the same system. However although the

fact that all authorities are, or soon will be, using the same IT system this should only be

viewed as the foundation for joined provision, as bespoke modules and individual

developments are operated within each authority’s technology.

Current levels of Collaboration:

Informal collaboration exists across the authorities in the form of discussion groups and

open communication. However there is little evidence of current formalised collaboration.

Barriers to Collaboration:

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Although generally between the authorities barriers are minimal, in terms of provision, it is

recommended that delivery models become consistent across all authorities, furthermore

increased use of Customer Services is suggested (as seen at NE Derbyshire). Therefore this

would mean that inclusion of at least this aspect of Customer Services would have to happen

to facilitate the provision of Revenues and Benefits within a joint corporate services model.

Drivers for Collaboration:

Broadly speaking the political appetite for including Revenues and Benefits within the

model is very high. It is seen as an obvious area for achieving economies of scale and thus

providing benefit to each authority. In addition the resourcing models are reasonable

comparative as is the maturity of provision in terms of use of technology and access

channels.

Conclusions:

The Revenues and Benefits service is seen as optimum for inclusion within a primary phase

of delivery.

8.1.2 Customer Services

Service Scope; Process and Delivery Complexity:

Currently Customer Services is provided collaboratively by North East Derbyshire on behalf

of NEDDC and Chesterfield BC, whilst Bolsover independently provides the function.

The services included within the delivery of Customer Services, however, alter between

each authority. Bolsover and North East Derbyshire have implemented a significant number

of services, and are thus operating a mature model; where as Chesterfield are looking to

build on the services incorporated, currently having only Environmental Services operating

within their CS department.

More investigation is needed into the differences in processes between each authority,

however it is safe to assume that the level of complexity involved in delivering each is low

in as far as the level of highly specialised resource needed to progress the majority of

enquiries is low. However there may be differences in policy between each authority that

will need to be accounted for when delivering each service.

Volumes:

In addition to Revenues and Benefits, Customer Services also traditionally are a part of

corporate services deliveries. However, volumes of transactions within Customer Services

are reliant upon the number of services taken on by the department. As such the level of

transactions handled by NE Derbyshire’s and Bolsover’s customer services departments are

greater than those undertaken by Chesterfield’s.

There is multi-channel access provision (Telephone, Post, Face to Face, internet, SMS), yet

Chesterfield only has telephone and post access within the department, and similarly to

Revenues and Benefits again the provision of web form access is low and this medium is

still to be used to its potential. Use of SMS messaging has been implemented across all three

authorities, yet this is generally used as communication tool for ‘news alerts’ rather than as a

customer access channel.

Systems:

All three authorities have implemented Northgate as their CRM; however in terms of

telephony systems North Derbyshire and Chesterfield use McFarlane, where as Bolsover use

Siemens. Although the same CRM system is used across the authorities, each system will

have bespoke modules and processes built in to them and as such if joint provision for

Customer Services is implemented work will need to be undertaken to bring all systems in

line with each other.

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Current levels of Collaboration:

The relationship between North East Derbyshire and Chesterfield in terms of Customer

Services is well established – providing many benefits including economies of scale through

formalised joint working. Bolsover are also currently collaborating with Derbyshire County

Council on a Customer Services project, implementing at the end of the year. However there

is little formalised collaboration between Bolsover and North East / Chesterfield, although

informal discussion groups and knowledge sharing does take place.

Barriers to Collaboration:

Although Customer Services collaboration is advanced between North East Derbyshire and

Chesterfield, the profile of services included in this delivery offering differs between the

two authorities, with North East taking more of a lead role in its provision.

Furthermore there is a strong political push from Bolsover to not be included within joint

provision of this service. There are concerns from Bolsover that the already established

formal joint working arrangement with Derbyshire County Council could be jeopardised

through any arrangement with Chesterfield and North East Derbyshire. Moreover any

centrally located team from all three authorities involving moving the established Bolsover

team is seen as potentially difficult due to Bolsover’s current property arrangements. In

addition Bolsover have recently undertaken a large programme of process redesign within

the department and implementing another major change programme is seen as potentially

detrimental to service.

Drivers for Collaboration:

The well-established relationship between North East Derbyshire and Chesterfield lays the

foundation for a successful joint provision of Customer Services. Furthermore resourcing

profiles for the two departments (Bolsover, and North East / Chesterfield) are similar in

terms of roles and responsibilities.

Conclusions:

The joint provision of Customer Services is seen as optimum for inclusion within a primary

phase of delivery. It is suggested that, however, thorough investigation of the use of virtual

technology should be investigated as this may bring collaborative opportunities with

Bolsover.

8.1.3 Finance

Service Scope; Process and Delivery Complexity:

The main services operated across the Finance departments are:

� Accounts production (incl. management and implementation of new legislation); � Management of purchase orders, invoicing and account reconciliation; � Budget setting and management; � Payroll; � Insurance services

Finance is made up of various services each of which vary in the level of complexity

involved in their execution. To this end Accounts Production; Budget Setting and

Management are seen as highly complex and thus not suitable for inclusion in this phase.

Bolsover are currently the only authority with a central processing department for purchase

orders, invoice management, and reconciliation as Chesterfield and North East Derbyshire

have devolved these services to the individual departments. However this service is an area

requiring minimal specialist resource to execute.

Corporate Services

Options Appraisal

37

Payroll and Insurance Service Management (not including claims processing) are dealt with

in house by all three authorities and are on the whole relatively low in terms of process

complexity.

Volume:

In terms of volume, however, Payroll services and Insurance Management differ as Payroll

has a moderate high volume of activity across all authorities where as the latter in

comparison has minimal volume of activity associated

Despite the fact that only one authority provides purchase management centrally there is still

a moderate volume associated with this function.

Systems:

In terms of the Financial Management Systems used, Bolsover use Civica, Chesterfield use

Agresso, whilst North East Derbyshire use Task. All three systems are recently implemented

and have bespoke models and functionality for the individual authorities.

Current levels of collaboration:

There is no formal collaboration in place; however informal knowledge transfer and

discussion groups do exist between all three in terms of VAT, Insurance, and Procurement.

Barriers to collaboration:

Due to the nature of the majority of the work undertaken by the relative finance departments

there is not a large scope of services to include within a joint corporate services offering. As

already stated there is also divergent delivery models operating purchase management

across the three authorities, this if this were to be included in a joint model there would be a

requirement for either a process and policy change within North East Derbyshire and

Chesterfield centralising this service; or a robust recharging model including only Bolsover

for this aspect.

Drivers for collaboration:

There is an appetite for including Financial Services within this offering; furthermore

Payroll services across the authorities have similar resourcing models.

Conclusions:

Although the initial scope would seem limited there are areas that should be considered as

suitable for inclusion within the Corporate Service package. Payroll would be a prime target,

however there is only moderate volume associated with this area and therefore is being

considered as a lower priority than a higher volume service such as revenues and benefits.

There are also other service areas that could present opportunities for inclusion such as

advisory services around new legislation for end of year account production. Presently a

resource intensive activity to understand enforced policy and procedure changes is

undertaken within each authority. This exercise could potentially be undertaken once, on

behalf of all three authorities – thus reducing the resource impact on the individual

authorities.

8.1.4 ICT services

Service Scope; Process and Delivery Complexity: The main services operated within this department are:

� Helpdesk; � System administration and management; � Project Management; � Management of Disaster Recovery plans

Corporate Services

Options Appraisal

38

There are a large number of different systems operating within each authority and therefore

the complexity associated with this service is moderate to high. However, Helpdesk does

offer opportunities within the first and second line support, as in the most part this requires

only minimum specialist/bespoke knowledge to undertake.

Furthermore there are also aspects of System Administration, where still centralised within

the department, that are low complexity, whereas the management of the systems and any

contracts in place with vendors is seen as a complex process; one which should remain

exclusive to the individual authority.

Although project management is in its self a specialist skill, there is little requirement for in

depth specific knowledge of the individual authorities - organisation specific knowledge

would come from local subject matter experts.

The management of Disaster Recovery is seen as a policy decision, however, where a shared

corporate services unit is implemented as an independent service provider disaster recovery

options will need to be defined and implemented.

Volume:

The Helpdesks with each authority handle with moderate to high volumes of enquiries, with

the majority coming through via telephone calls. System administration and management is

also of a moderate volume, where as depending on what projects are undertaken within the

authorities Project Management can either have a large or a moderate volume of activity.

Management and implementation of Disaster Recovery plans is not an area, which has

traditionally had a huge amount of focus, however Chesterfield’s current arrangement has

been tested recently with success, whist Bolsover and North Derbyshire are defining and

implementing plans currently.

Systems:

As already stated there are a large number of systems operating within each authority, thus

in terms system administration and management there are bespoke processes and specific

needs that are addressed internally.

Helpdesk approaches also differ; Chesterfield currently use a database to monitor calls and

manage the service; whereas Bolsover and North East Derbyshire both have implemented

specialised systems to operate the service. All three authorities operate a first line and

second line support in house.

Current Collaboration:

There are no formal collaborative practices in place, however there are examples of informal

collaboration through discussion groups and action groups.

North East Derbyshire are mid-implementation of an ALMO relationship for their housing

function, providing an opportunity for off site disaster recovery. North East Derbyshire has

opened this opportunity up to both Bolsover and Chesterfield. Currently Bolsover and North

East are looking to progress this further.

Barriers to Collaboration:

The current implementation of the ALMO at North East Derbyshire is requiring a high level

of resource input, and thus should be considered when undertaking another resource

intensive IT programme – such as a shared corporate services unit. Furthermore there may

be legal implications and responsibilities associated with this relationship and as such work

needs to be undertaken to ensure that any option around corporate services are evaluated

with this relationship in mind.

Drivers for Collaboration:

Operationally there is appetite for including ICT within a joint delivery of corporate

services, furthermore the resourcing profiles of each authority is similar. Bolsover currently

Corporate Services

Options Appraisal

39

are experiencing a degree of under-resourcing, with some need for an improved skill set. By

working more collaboratively, in a formalised manner, skills transfer between the authorities

can be facilitated, thus improving resource profiles.

Conclusions:

There are many opportunities for inclusion of ICT services within a joint corporate services

delivery. There would need to be some degree of process re-engineering as due to the

number of incumbent systems. Also any services, which are included within the joint

delivery, would also have to be supported by the corresponding ICT function.

8.1.5 Human Resources

Service Scope; Process and Delivery Complexity:

The main services operated within this service are:

� Training – administration, and management; � Recruitment - administration; � Personal Record Maintenance; � Health and Safety; � Equality; � Occupational Health; � Dispute management; � Project work; � Policy definition and management; � Succession Planning; � Strategic change definition and implementation; � Union Liaison

Many of the services operated within Human Resources are related to the strategic or policy

direction of the individual authority and are thus excluded from this options appraisal

(policy definition and management, strategic change definition and implementation, union

liaison, succession planning and dispute management.)

There are, however aspects that are seen to be of low complexity and thus appropriate for

inclusion within a joint corporate services delivery - Training administration and

management; Recruitment administration; Equality; Occupational Health. Some of these

services (Occupational Health and Equality) are provided collaboratively already, with the

former between all three authorities and the latter provided between North East Derbyshire

and Bolsover.

Maintenance of personal records is primarily delivered centrally at Bolsover, yet is devolved

at Chesterfield and North East Derbyshire, furthermore the specific nature of this activity

would limit the scope for inclusion within a shared delivery unit.

Volume:

There is moderate volume of activity associated with each of these services however

individually the activity levels are not comparable to a large volume service such as

Revenues and Benefits.

Systems:

Chesterfield currently use Northgate as their Human Resource system, where as Bolsover

and North East Derbyshire both use Cris 21. Both systems have the functionality for some

self-service around basic information changes such as address alterations, however these

options have not been fully realised at any of the authorities.

Current levels of Collaboration:

Corporate Services

Options Appraisal

40

There is formal collaboration between the authorities through the provision of Occupation

Health, and then again with Bolsover and North East Derbyshire in the provision of

Equalities (shared Equalities Officer).

There is also informal collaboration in place in the form of discussion groups.

Barriers to Collaboration:

Each authority is at differing levels of single status implementation and this is drawing on

much HR resource to implement. The resource needs at North East Derbyshire are further

impounded by the implementation of the ALMO.

Terms and conditions between the three authorities differ and this will have implications on

management of staff as well as record keeping if the authorities were provide HR as a joint

corporate services delivery.

There is also a perception of discrepancy between the councils around the results of Job

Evaluation; it is thought that there will be scale differences between similar roles at the

individual authorities.

Drivers for Collaboration:

There is a political appetite for inclusion, and the resourcing profile within each authority is

similar.

Conclusions:

Although there are services, which would be very suitable for, inclusion within the Joint

Corporate Services delivery the volume associated within each is only moderate. There are

also a number of resource intensive projects ongoing within each authority that would draw

on the same resource pool that a corporate services implementation would require.

8.1.6 Legal Services

Service Scope; Process and Delivery Complexity:

The main services operated within the department are:

� Litigation; � Prosecution cases; � Contract administration management and implementation; � Land Charges; � Freedom of Information request handling; � Administration and award of licencing; � Planning, Environmental Services, and Housing Support; � Legal Conveyancing; � Committee Support (e.g. Housing Appeals)

The complexity involved within the delivery of this service is high and many of the

activities are bespoke and need to remain specific to the individual authorities such as

Litigation; Contract administration management and implementation; Service and

committee support; Prosecution; and Conveyancing.

Although administration and award of licencing is seen to be reasonably transactional in

terms of delivery, this area is provided jointly through Legal Services and Environmental

Services. This joint delivery adds complexity to this service and thus is recommended for

future assessment, rather than inclusion in the primary phases of implementation. Freedom

of Information request handling is also reasonably transactional, however, this is a service

that is provided differently within each authority and is thus recommended for future

implementation

Corporate Services

Options Appraisal

41

The services seen as lower complexity and thus more suitable for inclusion in a joint

delivery are land charges, and FOI request handling.

Volume:

There is a moderate amount of activity associated with each of these services however

individually the activity levels are not comparable to a large volume service such as

Revenues and Benefits.

Systems: There are a variety of systems in place and these are supported by a number of manual

processes within each authority. In terms of Land Charges there is a need for increased

investment within technology, both due to the forthcoming legislation around electronic

records and also to improve the efficiency and effectiveness of the services where manual

and paper based systems are restricting performance.

Current Levels of Collaboration: There is no formal collaboration in place currently however there are examples of informal

collaboration through forums such as the Planning Special Interest Group, which is borough

wide, and discussion groups.

Barriers to Collaboration:

There is legislation being implemented over the next few months, which will affect the

current processes around land charges, and this will need to be considered if this service is

included within a joint corporate services delivery.

Drivers for Collaboration:

There are some investment needs within the provision of Land Charges; furthermore with

the new requirements around electronic records there will be more requirement for

investment over the coming months.

Conclusion:

There are opportunities for collaboration within Legal Services, however the volume of

activity within each area is only moderate. Legislation is being introduced as well which

potentially impact on timescales and this ought to be considered before introducing these

services within a shared delivery.

8.1.7 Service Evaluation Summary

The above evaluations are summarised in the following table. Green indicates a current

optimum level against the criteria; Amber indicates a favourable level against criteria; and Red

a low level against criteria. For example in terms of Systems: Green – all three authorities use

the same system; Amber – two authorities use the same system and the other uses an alternative

system; Red – all three use different systems.

Corporate Services

Options Appraisal

42

Volumes Systems Current

Level of

Collab.

Process

Complex'y

Drivers Barriers Total

Assessm't

Council Tax 3 1 3 3 3 Core 1

NNDR 3 1 3 3 3 Core 1

General Income -

parking fines etc

3 3 1 3 3 3 Core 1

Debt / Non-payment

Chasing

3 1 3 3 3 Core 1

Telephony 3 2 3 3 2 Core 1

Email / Web forms 2 2 3 3 2 Core 1

SMS 1 2 3 3 2 Core 1

Kiosks 1 2 3 3 2 Core 1

Post 3 2 3 3 2 Core 1

Face to Face 3 2 3 3 2 Core 1

Training co-ordination 2 2 3 3 3 Core 2

Recruitment

administration

2 1 3 3 3 Core 2

Personal Record

Maintenance

3 1 2 2 2 Future

Health and Safety 2 1 2 3 3 Core 2

Equalities 2 2 2 3 3 Core 2

Succession Planning 2 1 1 1 1 Future

Policy Definition and

Management

3 1 1 1 1 Future

Employee relations

(Unions, Dispute

management, Tribunals)

2 1 1 1 1 Future

Payroll 2 2 3 3 3 Core 2

Insurance services 1 1 3 2 3 Core 2

Invoicing / Transaction

Processing

2 1 3 1 2 Future

Account production 3 2 1 1 1 Future

Budget Management 3 1 1 1 1 Future

Helpdesk 3 2 3 3 3 Core 2

Management of Disaster

Recovery

1 2 2 3 2 Core 2

Project Management 3 2 2 3 3 Additional

System administration

and management

2 2 1 2 2 Future

Land Charges 2 1 3 3 2 Core 2

Freedom of Information

request handling

1 1 3 1 1 Future

Administration and

award of licencing

2 1 2 1 1 Future

Prosecution 2 1 1 1 1 Future

Litigation 2 1 1 1 1 Future

Legal Conveyancing 2 1 1 1 1 Future

Service Support 2 2 1 1 1 Future

Committee Support 2 1 1 1 1 Future

Contract award and

management

2 1 1 1 1 Future

ICT:

Legal Services:

Corporate Service - Short List

Revenues and Benefits:

Customer Services:

Finance:

Human Resources: