The following article was published by Peterborough City Council in Feb 2007:

With a mandate to realise savings in excess of £10 million, Peterborough City Council is clearly not shying away from the efficiency challenge. Leading the programme is the newly formed business transformation team.

Working with other council departments, the team has already identified savings of £4 million and needs to identify a further £6.4 million before March.

The team was formed to reduce the council’s spend on the supply of goods and services and to improve contracts, administrative processes, business systems, contract standing orders and financial regulations.

The team’s arrival heralds something of a culture change for the organisation which was previously an average council but has improved over the last year and is currently rated as a three star authority. The programme’s reach is wide and transformation projects cover all areas from property to procurement to printing and everything in between.

There are two work streams for the team. The first focusing on procurement and aiming to deliver £2 million of annualised savings, and the second on driving efficiency, and the early successes of the procurement strand are already providing funding for the efficiency agenda.

The procurement stream is delivering savings from the council’s non-pay expenditure through a variety of initiatives. These include tactical initiatives intervening in current procurement activity to reduce committed contract values; reducing the cost of procurement activity through existing or available deals and contracts; and ensuring compliance.

So far this year two significant tactical initiatives – in CCTV installation and maintenance and in civil engineering consultancy - have realised savings in excess of £350,000 per year for the duration of the contracts.

In addition, a 12 month strategic sourcing programme is focusing on negotiating and implementing corporate contracts in areas such as temporary staff, energy and utilities, IT, print, legal services, telecoms, fleet and building maintenance. Running alongside these contractual processes is the implementation of a ‘demand management’ system in the council, challenging requests for procurement and ensuring that the right supplies and services are provided not just those which have ‘always been used’.

The focus on efficiency is foremost in the current business and financial planning cycle and the council’s Cabinet has already been able to propose a record-low council tax increase of just 1.4 per cent for 2007 / 2008. This achievement is thanks in no small part to the projected savings identified via the business transformation process.

The city council’s chief executive Gillian Beasley is championing the transformation agenda. She said: “We have seen significant improvements in Peterborough’s performance over the past couple of years but it is clear to me that to move us on even further we have to implement a huge change in the way we do business. It’s clear that we’re not just looking at small scale projects but also ambitious and far reaching programmes that will involve outsourcing, restructuring and in some occasions complete re-commissioning of contracts.”

The efficiency work stream has a number of focuses, including the use of ICT to simplify processes and automate repeatable tasks to enable more efficient operations; reducing the cost of business support by eliminating multiple systems and introducing a unified system and database under which other systems will link; and rationalising current ICT-related supplies and service contracts.

Additionally, the efficiency stream is driving the recovery of outstanding debt through the better management of internal debt recovery and collecting debt through external recovery agencies. This is enabling the organisation to concentrate on those who are able to pay but have consciously taken the decision to delay payment.

As the business transformation team is working its way through the organisation, it is identifying areas where modest investment – from the savings generated by the procurement stream – can enable the department or service to deliver more for less.

Of the major projects sitting under the banner of business transformation, one of the most significant is something known as the Business Change Programme (BCP). The programme is designed to devolve more financial responsibility and accountability directly to budget managers, providing more accurate and timely information and tightening up on the process of ordering and paying for goods and services.

It means an end to outdated systems such as the use of manual order pads and the introduction of on-screen purchase orders with a list of approved suppliers. The system will be quicker and easier for users and will mean less paperwork and administration.

In charge of the business transformation team and the man responsible for delivery of these projected savings is Ben Ticehurst. He said: “It was important that we introduced a robust and auditable programme that was not just about savings but also about improving customer service. The business transformation team’s focus has to be on realising the benefits of these programmes and making sure the savings really are driven out of the organisation.

“Of course there’s some pain. Making changes on this scale does mean that we need fewer staff and that some teams will be working in totally different ways to those they’ve been used to. Still though, the best ideas for transformation are coming from individuals and teams who may have been desperate to make changes for a long time. It’s almost as if business transformation has given them the freedom to think more creatively and to suggest ideas that may have been under the surface for a while.”

The council’s intake and assessment team in children’s services has embraced the efficiency challenge. The team recognised that they were spending disproportionate time and energy on activities such as reworking or amending documents which added no value to the overall process. There was also a lot of unnecessary waiting time built into even the most standard of processes.

Team manager Ann Garratt said: “My team began working with the efficiency specialists to accurately document our processes. By taking the time to look at how we work we could see ourselves there were some areas that we could improve on.

“We highlighted areas where we could make a significant increase in our capacity to deal with referrals made about local children. We were able to reduce the time taken to complete an assessment from ten weeks to just one week.

“As well as being able to deal with more referrals and provide a better service, we estimate we’ve saved around £300,000 worth of staff resources per year that will now be used to improve the way we deliver essential services.

In line with the council’s programme and project structure, each of the savings projects uses a business case approach and these are all scrutinised by members of the business transformation board throughout the project lifecycle. The transformation board is made up of senior officers and members including the council’s deputy leader and director of strategic resources.