Public Sector Outsourcing. The way of the Future? Gavin Snell Capita Dave Rumble Serco

Transcription

1 Public Sector Outsourcing The way of the Future? Gavin Snell Capita Dave Rumble Serco

2 Public Sector Marketplace Drivers Developments Requirements Rising cost of welfare and healthcare Wider approach to transformation Thinking the unthinkable Acute financial pressures Personalisation putting the individual in the driving seat Leading to Increased need to transform support services Highly cost conscious Focus on customer management capabilities and shared service platforms Wider interest in more radical models PUBLIC sector customers are therefore increasingly likely to review opportunities for front, middle and back office outsourcing

3 Public Sector Evolution Central Government Local Government A UK perspective 1984 >500 ~23% 4 bn 8 bn Outsourcing in Local Government started Number of contracts in Government since 1995 % of total local government spend already outsourced Estimated economic benefit delivered p.a. Spend on outsourced services p.a. Spend on outsourced services p.a.

4 Public Sector Service Delivery in UK UK Market Drivers Public Sector spending reducing by necessity Wastage recognised Frontline services must continue to be delivered whilst meeting tough budgetary pressures Non-acute services will be outsourced to Private Sector Shift to Online Services Digital by Default Localisation agenda Shared services and solutions to be at the heart of service design Principles Accountability to users and taxpayers Increase choice, with more private sector involvement Decentralise to lowest possible level Open up to a wider range of providers Fair access for all

5 UK Central Government Service Delivery Domain Customer Contact Case Management Revenue Management Purchasing Back Office Estimated Spend in Government 8bn 14bn 13bn 1bn 10bn Capability Inbound Customer Management Outbound Customer Management Applications Processing Claims Processing Certifications Processing Grants Processing Payments Processing Goods Fulfilment Back Office Definition The customer provides/ reports information to the Government to process The Government provides information to customers The customer applies to the Government for permission/ authorisation to do something The customer applies to Government for arbitration/ mediation The customer applies to Government for validation/ licensing of an activity/service The Government pays grants/ loans/ benefits to the customer The customer pays the Government for fines/ taxes The customer purchases goods from Government Series of processes which run the organisation for employees Process Activities Appointments; Enquiries; filing information/ records; reporting and; information services Referrals and signposting; sending information to 3 rd parties; notification services Assessment; Document Management; Verification; Customer Contact; supporting services Claims resolution; appeals; disputes handling; screening; inspections Licensing; Assessment; Eligibility; Inspections; Verification; Screening Assessment and eligibility; F&A F&A; billing; debt recovery; revenue collection Ordering goods; replacing goods; product fulfilment; HR, payroll, finance, IT, procurement, communicati ons and legal Key Delivery Agencies Source: Departmental Budgets, Company estimates.

6 UK Local Government Service Delivery Customer Management (contact services, complex case management, adult social care) Transactional Services (HR & Payroll, Finance, Traded Services) Revenues and Benefits (collection and benefits processing) ICT (technical and operational support, IT enabled service transformation) Procurement (supply chain management and rationalisation) Frontline Services (estates management and refurbishment, integrated FM) Treasury Management (financial governance and managing pensions) SERVICE integration across capabilities unlocking potential areas of local government outsourcing

7 Central Government Case Studies Complex case management of non-automated child maintenance payments Over 80k children benefiting Receipts have increased from 700 to 3,000/day, resource remains the same Inbound call handling for Jobseeker Direct, National Insurance Number Service, and an out of hours National Benefit Fraud Hotline service Helping 2.6m unemployed access help and guidance Customer contact services for Defra Helpline, Poultry Register, Pet Travel Scheme and emergency call centre support in the event of animal disease outbreaks Multi-channel advisory support on 80 topics answering over 200,000 queries each year Telephone and enquiry service providing information on a full range of services and procedures 1.3m calls per year, 93% first time resolution Customer contact service for welfare-to-work programme providing multi-channel customer management Over 2m calls helping people get back to work End-to-end service delivery printing and despatching nutritional support vouchers Producing 95m of Health Vouchers per annum Management and operation of public health helplines TUPE with no loss of service 2009/10 on-line sales reached 2.12m, 7% ahead of target Over 70% increase in sales through outbound calling since service commencement Customer contact and Technology Knowledge Management system, Webmail and SMS Increased satisfaction from 67%. to 90% in first year and first contact resolution rate is now 95%

8 Local Government Case Studies Birmingham City Council - Capita partnership Information and communications technology, customer contact and tax and rates management Significant ( 2m) staff investment Cashable savings of 9.5m in first 9 months to offset initial cost 146m of cashable benefits have been realised IT and Procurement services Programme has saved over 13m in first 2 years - total 30m will have been achieved by the end of the third year On addressable spend of 132m p.a. Capita 3 year Procurement Savings Programme has delivered circa 33m in savings Procurement and Shared Service partnership Partnership predicated on the basis of guaranteed savings over the term of 21m Covering all central spend categories with complex stakeholder management Joint Venture for Property and ICT Management Services Largest local authority in UK with 40,000 employees and 2bn annual spend Integrated FM and ICT service function generating savings with 70m savings over term 500% improvement in speed Help desk calls answered within 20 seconds increased from 40% to nearly 90% Transition of staff and development of new capabilities using council infrastructure Covers property, IT and data centre infrastructure and management of suppliers generated 15% savings in first year

9 Public Sector Innovation Case Study County Council Service Transformation Co-produced business case approach delivering guaranteed savings Transformation investment made by Serco Scope included Customer Service, ICT, Facilities Management, Finance, HR and Payroll and Occupational Health Covers ten district councils and the police authority Additional services added adult social care, children s services Contract commenced April 2011 Ten year partnership

10 Public Sector Innovation Case Study County Council Joint Venture Establish JV as a new education support services business UK education support services market estimated at ~ 16bn p.a. Top quartile education services + Capita transformation and growth Contract valued at 1.7bn (20 years) Provide a range of bundled front line support services including education support, transformation, learning & development and property Contract commenced in April 2013, initially in Staffordshire region Intention to realise 2bn further revenues

11 Reflections on the market Cost reduction and reforming public service delivery will continue across the globe Effective Service Delivery will generate significant savings Considered approach needed to qualify what services should be outsourced Industrial relations and management of unions is crucial Structured Procurement approach ensures open and fair market Service integration built around the citizen unlocks digital by design Public / Private Partnerships need management but do work

12 Thank You