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Division(s): All

ITEM BV9

BEST VALUE COMMITTEE – 23 JUNE 2004

VALUE FOR MONEY – BEST VALUE REVIEW PROGRAMME

Report by Director for Resources

Introduction

  1. On 26 May the Committee agreed to create a best value programme entitled ‘Value for Money’.

  2. The proposal was based upon a paper from the Director of Resources which outlined how savings required by the Medium Term Financial Plan (MTFP) would be delivered.

  3. These efficiency savings are calculated at £5m 2005/06, increasing to £10m cumulatively in 2006/07 and £15m by 2007/08.

  4. This paper proposes how the programme will be structured and managed.

  5. Brief details are provided for each work stream, which will form the structure of the best value review programme. Further proposals for activity within each work stream will be presented to the committee as plans and options are developed.

    6. Structure

  6. The paper produced by the Director of Resources identified the following work streams:

    • Procurement

    • Business process re-engineering (BPR)

    • Using ICT effectively (another dimension of BPR)

    • Shared Services

    • Income Generation

  1. The five work streams will form the core of a ‘Value for Money’ best value review programme. The programme will be -ordinated by a Steering Group and overseen by the Best Value Committee.

  2. Annex 1 (download as .doc file) provides an overview of this structure and identifies who will be leading the operational work for each work stream.

    3. Management arrangements

    Best Value Committee

  3. The Best Value Committee will oversee the programme, receiving proposals for activity within each work stream, approving planned changes, related targets and implementation plans as well as monitoring implementation and the outcomes achieved.

  4. Members of the Best Value Committee will be invited to join the Steering Group and the Strategy Procurement Board and Customer Services Board.

  5. Where significant pieces of work take place within particular work streams members will be offered the opportunity to join those exercises.

    6. Steering Group

  6. A Steering Group has been formed comprising the lead officers for each work stream, together with the Director of Resources. The group will be chaired by Peter Clark Head of Legal Services. Cllr Alan Bryden as Chair of the Best Value Committee has joined the steering group.

  7. The Steering Group’s objective is to ensure that the programme meets the requirements of the MTFP, targeted at cumulative efficiency savings of £15m by 2007/08. Targets have already been established for some of the work streams. These are:

    • Procurement - £1.86m 2005/06, increasing to £4.2m (cumulatively) in 2006/07 and £4.8m in 2007/08. (This area will include BPR exercises and the application of ICT)

    • BPR exercises (including those flowing from the application of ICT) and developing Shared Services - £1m 2005/06 and 2006/07, increasing to £3m cumulatively in 2007/08.

    • Proposals for potential improvements in Income Generation are being prepared.

  1. A review of budget allocations is also being undertaken by CCMT and this is targeted to contribute a further £2m of efficiency savings for 2005/06. This area of work will not be included within the ‘Value for Money’ programme.

  2. The Steering Group’s role is to co-ordinate individual work streams, helping to develop initiatives and monitoring the progress of individual pieces of work. It will work with the Best Value Committee to agree the content of individual committee meetings, through the existing arrangements in place with the Performance and Review team.

    3. Work stream structure

  3. Existing ‘Strategy Boards’ will support four of the work streams. The Customer Services Board will cover Use of ICT and BPR, the Strategic Procurement Board, Procurement and Shared Services. Strategy Boards are responsible for the development of corporate strategy in their respective areas which will now include the savings required by the MTFP.

  4. Proposals to improve Income Generation will report directly to the Efficiency Savings Steering Group.

  5. Each work stream will also have an Operations Group to manage the specific projects and activities being undertaken, with a named lead officer.

  6. Annex 1 (download as .doc file) provides a graphic overview of the arrangements.

    7. Work stream programme

  7. Each work stream will have one or more initiatives, documented within a ‘work stream programme’. At this point the following details are available:

    1. Procurement – The corporate procurement strategy will have a number of key work streams:

    • Implementation of recommendations of the national procurement strategy for local government

    • Improving procurement governance

    • Improving financial control

    • Implementing e-procurement and improving the current procure to pay process (this is linked to the SAP revitalisation program)

    • Delivering efficiency savings; there are a number of key project initiatives in this area that will require a "process re-engineering" input:

    • facilities management review

    • agency staff contracting

    • food buying and CFM

    • print and design procurement

These initiatives have a strong link with the process re-engineering work stream and the ICT work stream and there needs to be a work plan strategy that clearly identifies the linkages and common goals.

      b. Process re-engineering – a major pilot exercise is underway which has been resourced by the Modernisation Fund. There are two objectives for the pilot:

      1. to re-engineer our corporate recruitment practices, improving performance and cost effectiveness in this key area and

      2. to demonstrate that such exercises can be undertaken successfully using ‘in-house’ teams rather than more expensive external consultants.

      If successful, further resources will be provided to expand this activity. Annex 2 provides full details of the current recruitment exercise and information explaining the principles of process re-engineering.

      ICT – at this stage work is focused upon core systems improvement and development of MIS. This is an essential pre-requisite to further development that will support improvements in Procurement and HR systems. Further information will be provided at a later stage.

      c. Shared Services – there are three stages to this work stream:

    • the first stage is to look at the current internal processes / functions that traditionally are considered appropriate for moving to a shared service style operation.

    • the second stage is to identify how these services operate now within OCC and the extent to which they are standardised and consolidated. The "what is now" stage.

    • the third stage is to look at which of the above services it would be appropriate to develop a business case / research study for working in strategic partnership with other local government organisations within the geographical area. The "high level options" clarification. This process would enable greater clarity about the opportunities and options for both internal "shared services" e.g. invoice processing and the external opportunities, either with public or private partnering options.

Factors that need to be played into this are a) opportunities for working in strategic partnership with non-government sector organisations and b) the work currently being undertaken on this area by the newly established Regional Procurement Centre of Excellence at Kent CC.

Income Generation - This work stream will focus on fees and charges. The initial deliverable will be a corporate policy on fees and charges taking into account the new freedoms contained in the local Government Act 2003, and the best practice recommendations from the Audit Commissions report ‘The Price is Right’. Stage 2 of this work stream will then review all services against the agreed corporate policy to identify where new charges should be introduced and where the scale of existing charges should be amended

RECOMMENDATIONS

  1. The Committee is RECOMMENDED to:

          1. the arrangements for the ‘Value for Money’ Best Value review programme;

          2. nominate two members of the committee to join the Strategic Procurement and Customer Services Board; and

          3. nominate one member to join the process re-engineering exercise for recruitment.

JOHN JACKSON
Director for Resources

Background papers: Nil

Contact Officer: David Lines Tel: (01865) 810150

June 2004

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