Think...
Efficiency
DISCUSSION PAPER
A STRATEGY FOR IDENTIFYING, REALISING
& HOLDING EFFICIENCY GAINS
WORK in PROGRESS
28th September 2004
Salford @dvance / Finance Services
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CONTENTS
Section
Page No.
1.
Introduction
3
2.
About the Gershon Report
3
3.
Efficiencies in the City Council
4
4.
Context
5
5.
The Efficiency Imperative
5
6.
Aims
7
7.
Current Work Plans
7
8.
Future Approach
9
9.
Next Steps
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1. Introduction
The City Council have recently embarked on a major strategy to improve the performance,
accessibility, responsiveness and integration of front line services to Citizens, through a
collaborative service model, both within the council and with partners, under the name: Think
Customer
This document compliments that strategy by setting out an initial set of ideas within a
consolidated programme of measures aimed at improving overall council-wide
organisational efficiency. These as a means of delivering up savings in line with the
provisions of the Gershon Report (July 2004), in an endeavour to free up resources to be
redirected towards front office services and so facilitate implementation of the Think
Customer Strategy and to meet budget savings targets required to keep expenditure within
resources available
We have chosen the title Think Efficiency as the name for an overarching strategy for
identifying, implementing and embedding such efficiency measures
The opportunity has been taken to bring together existing and planned efficiency initiatives
throughout the council into a single picture for clarity and better strategic management
In summary then, this report does 4 things:
1. Reflects on the main points of the Gershon Report and interprets them as they relate to the
council
2. Provides some initial thinking on an overarching framework for addressing the drive for
efficiency gains within context of the wider strategic change agenda and existing work plans
within the Council
3. Sets some high level efficiency aims for the council over the period 2004/5 to 2007/8
4. Sets out a future approach and next steps to create the necessary capacity, momentum and
governance
2. About the Gershon Report
The Gershon Report produced for Central Government entitled: Releasing Resources to
the Front-line (July 2004) sets out a range of proposals to achieve substantial efficiencies
within the public sector and so enable the redirection of resources to front line services or
else take the efficiencies as cost savings
A definition of efficiency is provided in the report, as a starting point for their review
proposals. These are restated below together with a brief note of how they translate to
Salford’s setting:
Gershon
What it means for Salford
Reduced numbers of inputs (people or assets),
whilst maintaining the same level of service provision.
Reducing the staff effort or making better use of
things such as information systems and
accommodation in delivering the same quality and
quantity of services
Lower prices for resources needed to provide public
services
Negotiating lower prices for bought in goods and
services through improved procurement measures
Additional outputs such as enhanced quality or
quantity of service, for the same level of inputs
Improved ratio of output per unit cost of input
Changing the balance between different outputs
aimed at delivering a similar overall objective in a
way which achieves a greater overall output for the
same inputs
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Working smarter, improving processes,
rationalising structures for economies of scale.
Changing service design for new ways of working
or new service offerings to achieve same overall
goals. Exploiting technologies for improved
performance with the same or less resources or
achieving a step change in performance with
relatively small increase in resources
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29th September 2004
The report identifies six main potential areas for savings (or work-streams):
Work Stream
Activity/Service
What it means for Salford
Back Office
Functions, which provide essential
support to the delivery of front-line
services, eg. Finance, HR, ICT, legal,
marketing
Reviewing support services
provided both at the `centre’ and
in directorates
Procurement
Purchase of goods and services
Adopting a Procurement strategy
and reviewing procurement
practices
Transactional
Services
Performing the day-to-day service
transactions to citizens, e.g. paying
benefits, collection of taxes, exchange of
information such as births and deaths
Reviewing cost effectiveness of
transactional services
Policy, funding and
regulation… for
public sector
Ensuring regulatory and funding roles are
proportionate to the value added
Reviewing our regulatory and
funding role
Maximising the time spent on actually
delivering front line services to citizens
versus engagement on supporting back
office activities
Reviewing involvement of front
line professionals in
administrative tasks
Policy, funding and
regulation… for
private sector
Productive time of
front-line service
professionals
3. Efficiencies in the City Council
Clearly, substantial and creative efficiency gains are not novel within the council. The
following analysis highlights just some of the notable improvements over recent years:
Service Area
Initiative
Impact
Finance
Re-engineering of financial processing
services supported by replacement of
LAFIS with SAP
Improved service and reduced
transaction costs
Customer Services
Implementation of document
management for council tax and benefits
Improved service and lower
service costs
Introduction of corporate contact centre
Improved service to citizens,
lower transaction costs
Improved service and lower
costs
Improved service and lower
costs
Community and Social
Services
Environmental
services
Re-engineering of home care service
from wholly in house to mixed economy
Re-engineering of refuse collection and
street cleaning
ICT Services
Renegotiation of hardware and software
contracts, altered mix of equipment
Lower cost of ownership,
improved performance and
reliability of infrastructure
This is a firm foundation on which to build a future consolidated programme of measures to
hold the gains and create new initiatives – but first, let us consider how we might view the
overarching approach to future thinking, planning and delivery of a Think Efficiency
strategy.
The next sections outline such a framework, embracing process, organisation and systems
considerations within context of the focus on front line improvements.
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4. Context
The Think Efficiency Strategy works in close unison with Think Customer.
Think Customer strategy aims to improve front line process efficiencies and share
information for cost savings.
Think Efficiency strategy aims to generate cash saving / liberate resources for re-allocation
to Think Customer
Think Customer



£££
Think Efficiency
Fig.1 complimentary nature of
Think Customer & Think Efficiency
5. The Efficiency Imperative
The most effective way of developing and handling a Think Efficiency strategy is by way of a
number of interrelated key building blocks, working in tandem in order to provide a coherent
overarching strategic framework for action:
Capacity
building
Leadership
and
Governance
Business
model &
structure
Performance
setting &
management
Culture
Efficiency
imperative
Processes
&
transactions
Skills &
Knowledge
management
Resources,
Partners &
suppliers
Fig.2 Strategic framework –
10 key building blocks
Systems &
Tools
Consultation
&
communication
The scope of each of one of these key building blocks is explained below:
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Leadership
and
Governance
Ensure effective leadership and governance arrangements of a consolidated
efficiency strategy in order to provide the vision, drive, challenge and
management of results
Business
model &
structure
Service re-design for the optimum mix of corporate / localised process
management arrangements, structure and collaborative working for
achievement of economies of scale. Proposals will take account of proposed
corporate structure and planned shared service function
Culture
Foster a culture of innovation and continuous improvement to identify
develop and implement improvement opportunities and hold the gains. Initial
focus will be on answering the question: are we fully exploiting good
practice already in place?
Processes
&
transactions
Systems &
Tools
Resources,
Partners &
suppliers
Expand ongoing efforts to re-engineer front line transactions and
back office processes including procurement
Ensure wide access and effective use and take-up of personal and team
based productivity tools and facilities based on standardised product set
Ensure budget allocation process rewards high performance and
achievement of target outcomes and penalises poor performance.
Devise resource management and resourcing models through Centres of
Excellence and Partnering
Skills &
Knowledge
management
Expand and accelerate Skills development and knowledge management
programmes geared to efficient process management
Performance
setting &
management
Ensure setting of challenging success criteria and performance targets
aligned to local and national priorities and establish effective benefits
realisation and benchmarking capabilities, supported by ICT systems
Capacity
building
Consultation
&
communication
Provide the necessary day-to- day practical mentoring and support to
guide, assist and embed efficiency changes throughout council, including
spreading of best practice
Put in place effective communication and consultation to engender
commitment and engagement to strategy
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6. Aims
(1) To define value of overall target savings, which are…


`Cashable’ arising from productivity gains
For budget savings or re-directing to support front line service improvements
(2) To articulate targets in terms of reducing transaction costs (of x core processes) or
reducing the level of overheads to xxx % of gross expenditure, which more closely aligns
with best performing organisations by 2007/8
(3) Developing a council – wide programme of measures to address the above targets
(4) Developing suitable methods and techniques for quantifying and driving in the targets
benefits and savings
(5) To position the Council to be able to respond positively to any demands from Government
for efficiencies
(6) To ensure that efficiencies will result in services that give value for money
7. Current Work Plans
Resource Planning Group and Directors Team have considered and endorsed an early draft
of this paper and undertaken an initial piece of work to identify high level proposals whereby
efficiency savings may be made over the next 3 years.
The following tables represent areas of activity where it is believed efficiencies can be made.
Cross-Cutting Proposals
Service Area
Payroll/HR
Orders/Invoices
Energy
Property
PSA reward grant
Efficiency proposal
More automation of processes and
shared service centre based
around maximising SAP utilisation
Streamlined processes through eprocurement, reduced paperbased transactions, purchasing
cards to maximise SAP utilisation
Efficiencies from conservation
measures and scrutiny of charges
Reduce through service change,
flexible office culture, eg drop-in
centres, electronic “hub” working,
standardisation in office furniture,
sharing with partners
One-off usage for saving
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Cashable Productivity
Saving
Gain
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
No
2 August 2004
Corporate
Corporate
Corporate
Corporate
Corporate
Corporate
Corporate
Procurement
Procurement
Procurement
Procurement
SLAs
HR
HR
HR
HR
ICT
Themes for all
directorates
“Think Customer” initiative
Strategic review
Support services generally in
service and central directorates –
process map to identify duplication
/unnecessary processes and
maximise the use of support
services by reviewing admin tasks
performed by front-line staff
Project management – dedicated
multi-disciplinary task force –
saving on training, lost time,
increased expertise – capacity
building
Review public consultation
techniques
Rationalise/combine directorate
strategy & policy units
Maximise private sector and grant
income (with particular focus on
S106 agreements)
Insisting on use of corporate
contracts – penalise maverick
spending
Engagement of consultants –
develop guidelines to rationalise
their usage
Agency staff – contract for admin
& clerical staff jointly with PCT &
other partners
Regional contracts via centres of
excellence
Reduce administration by stopping
or doing differently
Adopting good practice, inc
partnership working
Rationalise training facilities and
equipment – have a single
designated authority training
location (this should be the Eccles
LIFT Centre in partnership with
PCT)
Improve attendance management
Review potential for economies of
scale for administrative and
clerical support arising out of the
Strategic Review
Replacement programme using
standardised products
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Partnership working generally
Procurement
Income generation
Yes
Yes
Yes
Yes
Yes
Yes
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Expected to realise a minimum of £100,000 cashable saving or 10%
productivity gain over 3 years
Directorate
Corporate
Services
Corporate
Services
Corporate
Services
C & Social
Servs
C & Social
Servs
C & Social
Servs
C & Social
Servs
Environ’l Servs
Environ’l Servs
Develop’t Servs
Develop’t Servs
Develop’t Servs
Chief Executive
Housing
Efficiency proposal
Software licences
Cashable Productivity
Saving
Gain
Yes
No
Printing – market the service better
Yes
No
Reduce front-of-house staff in Phase 3
Yes
Yes
Expanded use of palm-top and wireless No
technology
E-procurement of care services
No
Yes
Home care brokerage
No
Yes
Transport
Yes
No
Light vehicle fleet tender (may be <
£100k)
Rationalisation of waste collection
JVC – annual 2.5% efficiency savings
target
Rethinking construction costs –
reducing construction costs, supply
chain management & tendering
administration
Benefit from Capita’s purchasing power
Marketing & communication benefits
(income generation)
Stock options appraisal
Yes ?
No
Yes
Yes
Yes
Yes
Yes
(Rev &
Cap)
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
8. Future Approach

Governance… is proposed through the Lead Member for Corporate Services, acting
as focal point, through whom political decisions will be sought, in conjunction with
Cabinet and Budget Strategy Group as appropriate

Day to Day progress and management… through the Resource Planning Group in
conjunction with Directors’ Team as appropriate

Decision Conferencing… would provide the practical vehicle for identifying and
distilling ideas for incorporation into a consolidated programme

Project Teams… would be established to pursue individual areas of investigation
and implementation, within an overall council wide programme
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9. Next Steps

Prepare a detailed scoping document for each efficiency proposal within the context
of each of the ten key building blocks described in section 5, which provides a better
understanding of how the high level proposals can be translated into realisable
efficiency gains, and the timescales for delivery.

Identify the resource implications associated with the delivery of the efficiencies

To prioritise the efficiency proposals in order to ensure that the maximum gains are
achieved in the shortest possible time

To develop methodologies for quantifying efficiency gains which are non-cashable

To develop methodologies for assessing value for money.
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