Transforming government
Home Office delivers a smarter estate
helped by strategic insights from IBM
Overview
Business challenge
• To transform the Home Office
estates and property function
– which then managed some
1,900 buildings – in order to
deliver improved value for money
and annual savings of around
£40million
• To establish two new lean Estates
Shared Service Centres.
Solution
Driven by the 2004 Lyons and Gershon
The inefficiencies caused by this
has contributed to a successful
reviews, which advocated releasing
lack of standardisation and strategic
change programme embracing
resources for frontline activities
planning across the organisation
processes, organisation,
through public sector efficiency, the
meant there was considerable scope
procurement and systems.
Home Office committed to achieving
for improvement and cost reduction.
Comprehensive improvements
savings of over £1.9billion per year.
are already delivering significant
Every part of the organisation was
savings through a more efficient
expected to contribute.
Starting with a strategic review, IBM
and effective organisation.
Key benefits
• Home Office well positioned to
Occupying a large and geographically
scattered estate, the Home Office then
deliver HMG Higher Performing
had approximately 1,900 buildings
Property Programme
representing one million square
• Has raised profile of property within
metres of accommodation. Part of the
Home Office enabling improved
estate has since transferred to the
strategic management
new Ministry of Justice. The buildings
• New pooled contracts which
meet a diverse array of needs and
achieve better costs and also
range from immigration centres and
incentivise performance and
juvenile offenders units to accounting
innovation.
and finance centres. Historically, the
structure of the Home Office Estates
function was based on the federal
nature of the organisation. Each of
the business units such as Prisons,
Immigration, Probation, Passports,
Police and Training had its own
approach to managing property.
“The IBM team was
essential to the success
of our transformation.
They provided a
wealth of property
management experience
gleaned from many
different organisations.
They were able to
benchmark against
other organisations to
help us size correctly
and many times they
helped us avoid unseen
pitfalls.”
–Tony Edwards, Head of General Property
at the Home Office
Transforming estates and property management
Business benefits
• Cost reductions expected to reach
over £40million per annum
• Improved service delivery and
customer focus
• Increased productivity
• Greater control of demand for
services
Value for money review
IBM consultants played an important role in transforming the Home Office Estates
function. They initially supported a value for money review that incorporated 1,900
Home Office buildings, representing £700million of annual cash expenditure plus
£300m annual resource cost of capital.
The review recommended creating two Centres of Excellence, one for the
custodial estate and one for the general estate. The Home Office has since
• Headcount reduced from some 400
to around 220
relinquished responsibility for custodial organisations but the new owner, the
• More effective procurement
processes and contracts
and continues to take services from the Home Office General Property team for its
• Greater competition and keener
prices from suppliers.
Ministry of Justice, has retained the Centre of Excellence that IBM helped create,
Probation estate.
Sustainable solution
Tony Edwards, Head of General Property at the Home Office says: “This shared
services model is actually pretty unusual in an estates environment. Property
strategies are often about consolidation and how you use accommodation. IBM
applied its breadth of experience to help us move beyond the obvious to focus on
making our organisation more effective. Essentially we have not simply targeted the
quick wins, although these are also important, but have concentrated on creating a
sustainable solution that will continue to offer us benefits in the long term.”
Ensuring best practice
IBM estates and property professionals were deeply involved in designing the
“The IBM team’s
guidance, judgement
and strategic insights
helped us put in place
a solution that will
continue to give good
value for money to UK
tax payers for many
years to come. They
brought a change
management capability
that was invaluable
and throughout the
project were able to
pick up on our issues
and help us through
to a very successful
outcome.”
new, leaner, customer-focussed function. A series of workshops helped scope out
what the new organisation would look like and identified the key stakeholders to be
included in shaping it.
“The IBM team was essential to the success of our transformation. They provided
us with valuable insight into successful property management gleaned from many
different organisations. They were able to benchmark against other organisations
to help us size correctly and on many occasions they helped us avoid unseen
pitfalls in making the changes that we implemented with their advice and support.”
Once work on the structure of the function was under way, a new procurement
strategy was developed to cover facilities management, estates management,
design and build, and professional services. This involved devising new contracts
to deliver both supply and demand side savings.
IBM supported the Home Office commercial team responsible for re-procuring
the contracts, and helped them pioneer a competitive dialogue procurement
process. This innovative move was made possible by recent changes to European
procurement legislation and involves engaging with suppliers at a much earlier
stage in the procurement process, before they price their bids. It enables a far
deeper understanding of what each supplier has to offer and at what price.
–Tony Edwards, Head of General Property at
the Home Office
2
One of the greatest challenges on the contract side was understanding and
incorporating the diverse requirements of the different Home Office business units.
For example, the Serious Organised Crime Agency has specific security concerns
that have to be addressed, while Approved Premises (which provides halfway
house accommodation, for instance for released offenders being rehabilitated
Key components
IBM Services
• IBM Global Business Services
– Asset Management Solutions Group
in the community under probation supervision) need to have meals provided to a
specific timetable. Ensuring that the central estates teams understand all these
requirements is crucial, so a network of representatives within the business units
has been set up to act as single points of contact.
Improved service, reduced costs
The transformation of Home Office Estates is bringing many benefits. Better
strategic planning, improved service delivery and best procurement practice have
not only reduced costs, they have also improved the quality of services delivered.
A new help desk facility provides more than 50,000 users of Home Office and
Ministry of Justice accommodation with a single point of contact for all propertyrelated concerns and also helps challenge user demand before requests for
expenditure are passed on to contractors. Rather than redesigning a facility to use
once or twice a week, for example, a business unit will be encouraged to try to find
someone who is willing to share a facility. Increasing focus on what is really needed
in this way reduces waste.
Centralising the Estates function has enabled headcount to be reduced from some
400 people to around 220, more than was expected. Also contract changes have
shifted more work to suppliers, increasing employee productivity. The headcount
reduction has been achieved with no enforced redundancies, resulting mainly
from removing the need for many of the temporary and agency staff previously
employed in the different business units.
Supply side savings have come principally from economies of scale and
efficiencies brought about through the re-procured contracts. The final tenders
are still being analysed but supply side savings of over £22million per annum are
expected. Overall savings for supply and demand side are on target to reach over
£40million per year.
Edwards concludes: “The IBM team’s guidance, judgement and strategic insights
helped us put in place a solution that will continue to give good value for money
to UK tax payers for many years to come. They brought a change management
capability that was invaluable and throughout the project were able to pick up on
our issues and help us through to a very successful outcome.”
For more information
Please contact your IBM representative or IBM Business Partner. Visit us at:
ibm.com/gbs/uk
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Transformation at a glance
To achieve improved value for
money and release resources for
frontline activities, the Home Office
has implemented a comprehensive
transformation of its Estates function
that enables more focus on customers
while delivering substantial annual
savings. A joint Home Office/IBM team
worked on a wide-ranging change
programme that embraced process
and organisation change, procurement
support and design of a single estates
management information system. A
centre of excellence now manages
property related services for the Home
Office, resulting in improved service
delivery and increased productivity.
Greater emphasis on managing
demand for property services ensures
efficient use of resources. The Home
Office is on target to achieve savings of
over £40million per annum. Part of this
saving will be for the Ministry of Justice
following Machinery of Government
changes.
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