INVESTING IN REFORM INVESTING IN STOCKPORT DRAFT BUSINESS CASE

Transcription

1 INVESTING IN STOCKPORT DRAFT BUSINESS CASE INVESTING IN REFORM IIS Programme/Project Name: Project Name: Portfolio: IIS Outcome: IIS Board SRO: IIS Project Lead: Public Realm and Solutions SK Communities and Sustainability Stockport is a place people want to live Paul Lawrence Ian O Donnell / Michael Cullen Key Project Contacts Name Ian O Donnell Michael Cullen Role Head of Service Strategic Financial Advisor 1. Executive Summary This proposal follows a review jointly commissioned by the Council and SSK that appraised the strategic future of the Company in the light of both the financial pressures facing the Council and the Company s own position and aspirations. The proposal has looked at the following areas for saving opportunities; Efficiencies Growth Reductions Pricing The following services are in the scope of the project: Highways maintenance Street cleaning Grounds maintenance Parks Refuse collection services Of the proposed savings of 2.9m it is envisaged that c 0.58m is from service reductions. The details of these reductions are set out below. The key benefit is that c 2.3m will not affect front line services. The financial considerations will be relevant across the whole of SSK, not just the services listed above. 2. Case for Change Policy Drivers: - The recovery plan for SSK needs to be maintained in a way that encourages the company to grow its business base. Financial context: - As a consequence of the reduction of the Councils overall budget provision savings need to be made. Page 1 of 12

2 3. Project Objectives and Benefits What do we want to achieve? How will we know whether we ve achieved this? How will we measure this? When will we achieve this? Objective Benefit Metric / Methodology Timescale Reduction in revenue spend on services in scope Services continue to be provided at reduced costs PPRA and service performance management From April 2016 Sustainability of SSK operating model SSK continues with recovery plan and grows it s business base SSK financial management and reporting From April 2016 onwards Progress against these objectives will be reported through the quarterly Portfolio Performance and Resource Reports and through programme governance arrangements. Page 2 of 12

3 4. Scope A) IN SCOPE Approach SSK provides a range of services to the Council as a contractor. A review has been undertaken of these services to identify areas where costs can be reduced. These proposals have been developed with client officers within SMBC. Services involved Highways maintenance Street cleaning Grounds maintenance Parks Refuse collection services Staff The table below provides information about the SMBC staff in scope of this project: Service area Headcount No of FTEs Highways maintenance* *One proposal to be developed is an end to end process for identification, reporting and repair of highways defects. This will potentially involve these posts. The optimum operating model will be developed as part of this proposal. Total It should be noted that there will be a reduction in SMBC / Solutions SK staff of up to 23fte if these proposals are implemented. Page 3 of 12

4 5. Proposed Delivery Model(s) 1) Outline of model The following operating model is proposed in the business case. This is defined by four distinct areas. Efficiencies c 1.02m Re-baseline existing budgets in line with actual spend Single end to end process for identifying and completing highway repairs* Reduce the cost of overheads across a variety of SSK support services Cost reduction from better procurement and re-negotiation of operational contracts. Growth c 0.50m 5m additional planned highways contracts awarded to SSK per annum, subject to review after 12 months on basis of value and quality SMBC commits to a 5 year contract for CCTV allowing SSK to grow digital services Reductions c 0.58m Staffing at parks. Reduce hours at key parks and remove permanent staffing completely at specific parks Grass-cutting. Reduction in detailed specifications and frequency of cuts. Reduce the frequency and comprehensiveness of marking of football and cricket pitches and use better quality paint mixes. (Subject to trial) Reduction of District Centre stewards by reducing visits from 3 times per week to two. Reduce Tipper crews from 6 to 5 units. Reduce agency cover for absence by 1/3. Pricing c 0.8m Proposal to reduce the profit element of the current revenue funded Cost Plus pricing arrangement from 5% to 1%; SMBC will replace all Cost Plus contracts with a schedule of rates in each service area, the detail of which will be agreed if the general principle is accepted; This would result in the SSK balance sheet being repaired at a slower pace than previously envisaged, however the balance sheet is significantly impaired by the Companies pension liability; SSK would retain ability to retain profit from commercial activities and capital works from the Council including the growth in capital works to be procured via SSK; SSK would be able to retain any profit that arises from over performance against the cost assumptions within the revised cost base subject to meeting the required service specifications; The Council would be prepared to provide reasonable assurances to satisfy the requirements of SSK, their auditors and / or potential new clients. 2) Rationale The options being proposed are primarily measures which can be achieved without affecting front-line services. The reductions proposed will have an impact on the appearance of the public realm across the borough. This is however an inevitable consequence of the extent of the savings being proposed. 3) Deliverability (risks, issues, considerations) Risks and Impact Failure to realise proposed efficiencies and growth. Detailed management plans and performance management measures will be in place to mitigate against this. Reductions outlined will have a visible impact on front line services Page 4 of 12

5 4) Timescales Headline Milestones o Consultation with stakeholders August 2015 o Executive Decision December 2015 o Implementation from April ) Service Development Quarterly meetings with SSK to monitor financial performance Performance reporting in PPRA will include measures designed to measure performance on street cleansing Areas for Consultation / Further Analysis Single end to end process for identifying and completing highway repairs There are a number of options for us to consider that will help achieve this: Possible transfer of up to 13 fte Public Realm Inspectors and Highways Safety Inspectors to SSK and subsequent review to establish a more efficient process; or, Retain the existing staff within SMBC and identify options for savings within SMBC; and, Both options would require a re-design of whole process. Page 5 of 12

6 6. Investment Profile Current overall investment The overall investment across these services currently stands at m. We anticipate that the future (2016/17) investment in this area will be m In order to achieve this ambitious programme of change, the total investment is summarised in the table: Breakdown of change Service Budget Baseline m 2015/16 m 2016/ Public Realm TOTAL Page 6 of 12

7 Design and Consultation 7. Implementation Plan Impact Planning Phase Phase.1: Consultation Phase.2 Process Review Phase.3 Implementation Phase and Headline Activity Description Consultation August 2015 Review of end to end process for the identification and repair of highways defects. August 2015 Implementation December April 2016 Potential Impact Consultation on potential reductions in service standards in public realm will need to be borough wide. Previous consultations have generated a significantly large response. There are a number of options for consideration: Possible transfer of up to 13 fte Public Realm Inspectors and Highways Safety Inspectors to SSK and subsequent review to establish a more efficient process; or, Retain the existing staff within SMBC and identify options for savings within SMBC; and, Both options would require a re-design of whole process. Potential transfer of Public Realm and Highway Safety Inspectors Key Milestones Phase Milestones Start Date Completed Date Draft IIS Business Case Submitted 18 th August 2015 HR Business Case Developed August 2015 New Model Designed August 2105 New Model Agreed for Consultation August 2015 Staff Consultation (min. 45 days) October 2015 Stakeholder Consultation October 2015 New Policies Drafted (if required) Final Business Case Submitted December 2015 Implementation New Model Implemented April 2016 Page 7 of 12

8 8. Stakeholders, Consultation and Engagement Stakeholder Overview This Business Case cannot be achieved alone and will require the support of a wide range of stakeholders. The Management Team will be working with a range of stakeholders to shape and progress this proposal. These include: Solutions SK Elected Members Greenspace Forum Friends of Groups Service Users Consultation and Engagement Focus Consultation will need to be borough wide as proposal for reductions in service provision apply across the Borough Specific consultation will take place with friends of groups and any identified group of service users The aim of the consultation is to assess the public perception of the potential impact of the proposal and identify any viable alternatives Feedback The consultation will consist of face to face meetings with the Greenspace Forum which includes Friends of Groups. There will also need to be a borough wide consultation process which will be online. Staff from Public Realm will undertake this work The consultation will take place from August 2015 A report on all consultation will be produced which will be provided to Scrutiny Committee in December for consideration and will accompany the business case through the decision making process. Page 8 of 12

9 9. Interfaces, Interdependencies and Constraints Interfaces and Interdependencies The main interfaces are between the Council and SSK. The Public Realm Service acts as the Client for provision of the services in scope. This is the responsibility of the Head of Public Protection who has assumed responsibility for these areas following the departure of the previous Head of Public Realm. Team managers from Public Realm will have the responsibility for developing proposals and overseeing and monitoring the implementation. The options for Growth are reliant of the Council providing additional CCTV work and Highways work to SSK. Constraints This project will operate within the following framework: SSK needs to be able to develop its capacity to deliver whilst still providing services in the meantime. SSK s ability to generate additional income from new commercial customers. Page 9 of 12

10 Project Specific Risk P1 P2 IIS 7 IIS Programme Risk Register IIS 6 IIS 4 IIS 3 IIS Risk Risk Management Arrangements The Investing in Stockport Programme risks have now been combined with Corporate Risks into a single Risk Register which outlines how the organisation is mitigating against identified risks. This risk register is part of the Corporate Performance and Resource Reporting framework which is monitored quarterly on both a Portfolio and Corporate basis and in addition reported to Audit Committee. Risk Matrix Outlined within the table below are the headline risks for this Project and an overview of mitigating actions identified to address this. Also included are any project actions that underpin the Investing in Stockport Programme risk register. Programme level controls are identified within the IIS Risk Register. Risk and Potential Impact Governance Inadequate governance arrangements means that progress on each project is not viewed strategically. Financial Savings targets are: not achieved; inaccurate; duplicated by multiple projects; not delivered on time. Thereby impacting on current budgets and affecting the levels of savings required on other projects. Digital Capacity The Digital by Design project cannot support the changes required by the Programme thus affecting the success of its delivery External Service User Risk in that demand and expectations continue to rise against a backdrop of reduced resources, thus leading to service delivery failure and an increase in complaints. Workforce Capacity Loss of key knowledge and people needed to drive the Programme forward affects key milestones. Failure to realise proposed efficiencies Service reductions outlined will have a visible impact on front line services Project Controls Quarterly meetings with SSK at Corporate Director/Managing Director level to oversee operations Quarterly meetings with SSK at Corporate Director/Managing Director level to oversee operations The project is not reliant to the digital by design project to any significant extent Performance management measures in place with opportunity to review the project Additional staff resources to be identified where appropriate. Detailed management plans and performance management measures will be in place to mitigate against this Performance management measures in place with opportunity to review the project. Page 10 of 12

11 P4 P3 Potential impact on SSK financial standing as the liability on the SSK balance sheet is repaired at a slower pace than previously envisaged. Failure to deliver growth programmes The Council would provide reasonable assurances to satisfy the requirements of SSK, their auditors and potential clients with regard the company s liabilities. Quarterly meetings with SSK at Corporate Director / Managing Director level together with the oversight of the Company via the Contributors Committee. Performance management measures in place with opportunity to review the project. Page 11 of 12

12 APPENDIX 1 EQUALITY IMPACT ASSESSMENT Title: Public Realm and Solutions SK Date: July 2015 Stage: Initial Lead Officer: Ian O Donnell Stage 1: Do you need to complete an Equality Impact Assessment (EIA)? Yes, an Equality Impact Assessment is required as the proposals outlined above relate to a reduction in service provision and potential changes for staff. This EIA will cover those elements of the proposals which are directly delivered by Stockport Council. Solutions SK will be responsible for conducting their own EIA, where appropriate, for specific elements of this project. Stage 2: What do you know? The service has a range of data which it uses to understand the demographics and needs of the population and its workforce, including; Census demographic data Performance data Financial data Feedback from complaints Workforce demographic data It is expected that proposals in the business case relating to reductions in service provision will have a visual impact across the borough. It is also anticipated that there will be staffing implications as a result of this exercise. Previous analysis has taken place in this service area previously and this will be reviewed and expanded to provide a thorough understanding of equality considerations. Stage 2a: Further Data and Consultation This section will be further developed and the impact of the proposals on equality groups will be monitored throughout the development of the project. Stage 3: Results and Measures This section will be updated throughout the development of the project and will be further developed to reflect and build on the learning within section.2 Stage 4: Decision Stage This EIA is a live document and will accompany the decision at all points throughout the process. Page 12 of 12