Agenda item

Report to Follow.

Mr Bailey introduced the report on the costs and benefits of the Transformation Programme. He broke this down into 4 headings:

1.            Transformation Team Structure and Cost Estimate - The Council’s corporate Transformation Team (also known as the Programme Management Office) consists of four posts. This current establishment reflects the merger of the previous transformation team with the Council’s Performance Improvement Unit. This has united efforts to manage the improvement of performance across both Business As Usual (BAU) and Business Transformation.

The total salary cost for the team was £206,500 for 2017/2018, including on-costs. This excluded the costs of any apprentices or internships within the team, both of which were funded from central Human Resource budgets. As with other officers that undertook specific project work in support of their operational areas; the work of the Head of Customer Service was not included in the costs of the corporate Transformation Team.

The corporate Transformation Team also undertakes a range of non-transformational duties, i.e. Business As Usual (BAU) activities. Overall, it was estimated that these Business As Usual functions currently occupy around 1.5 FTE, leaving the remaining 2.5 FTE attributable to transformation activities. This reduces the proportion of the team’s wage bill attributable to transformation activities to around £130,000 for 2017/2018.

A £100,000 prototype fund for the Transformation Programme was established in 2016/2017. To date around £30,000 has been spent undertaking activities in support of the programme. There are currently 55 High (43) and Medium (12) complexity projects and programmes across the Transformation Programme, supported by the corporate Transformation Team.

Councillor Patel asked how did the business as usual element of the programme support other managers. Mr Bailey said that depended on the project and where it was in its life cycle, its complexity or scale, and if it connected with other parts of the council.

Councillor Surtees noted that it was a small team and asked what they did if they had long term absences. He was told that they had not faced this as yet but they would rebalance their workload if needed.

Councillor Lion asked about transferring the transformation officers skills into the Business as Usual side of the council. Mr Bailey said that increasing the ability of the organisation to manage change would be managed strategically. Mr Chipp added that 100 managers had already been through the transformation change training. Councillor Bassett was pleased that we had a separate transformation team and were not asking our managers to do this. Councillor Patel commented that it may be useful if members could be given this type of training.

2.            Benefits from Management of the Transformation Programme - An assessment of the authority’s current capability in project, programme and portfolio management had been undertaken, using the Portfolio, Programme and Project Management Maturity Model (P3M3). The P3M3 model described five levels of capability, across seven process perspectives through three maturity models: Project, programme and portfolio. The seven perspectives are:

·         Management control;

·         Benefits management;

·         Financial management;

·         Stakeholder management;

·         Risk management;

·         Organisational governance; and

·         Resource management.

The recent assessment shows that the Council has increased its capacity to successfully manage projects and programmes. Plans are in place to reach the target performance levels alongside the establishment of the new Corporate Plan.

At inception, the Transformation Programme was set a savings target for 2016/2017 of £100,000. These savings had been identified and delivered.

3.   Individual Project Costs - work is currently ongoing to identify the financial costs and benefits – both financial and non-financial – across all transformation projects. The costs being tracked are the costs of direct delivery. It should be noted that there are challenges accounting for project management costs like the apportionment of officer time or costs that are described as ‘within existing resources’. Further, it is reasonable to question the value of undertaking such cost estimates.

Mr Bailey noted that the early projects had few benefits written down. They were now tracking these projects down and will write them up and report back to the Transformation Programme Board.

Councillor Avey asked if external resources were assessed by the Transformation Board. Mr Bailey said this was considered when it first went to the Board, but not assessed by the transformation team. Mr Chipp added that if they could carry this out internally they would, but we did not really have that skill set. Where supported by a business case, additional staff resource would be required to deliver the programme.

Councillor Patel asked if there was a need to use consultants to tell us what we need. Mr Chipp responded that the consultants we use have skills that we do not have. Mr Maddock added that a report on the use of consultants had recently gone to the Resources Select Committee.

4.            Individual Project Benefits: Financial and Non-Financial - The benefits from the projects which constitute the Transformation Programme were expected to contribute to the four key benefits previously agreed by the Cabinet:

·         Improved customer value – recognising what customers’ value about our services and placing them at the heart of everything we do;

·         Reduced waste – Focussing on getting things right first time through joined up services;

·         Increasing agility – Reducing red tape to simplify how we work; and

·         Increased savings and income – Delivery of resource savings and income generation, to keep Council Tax low.

The effort required to successfully manage projects and programmes across different industry sectors varies enormously, but research suggests the cost of managing should represent between 12-18% of the total project cost (Casper Jones, 2007). As an illustration of how the Council compares with this research finding, for two programmes (P106 and P160), project management effort represents an estimated 6.0% of the total costs.

It was clear therefore that the current level of investment in project and programme management represents very good value for money for the Council. However, it was conceivable that this level of investment may not be adequate to support the realisation of benefits. Further study would be required to confirm this hypothesis.

Councillor Bassett said that it was fortunate that we had the ability to “invest to save” at this Council. We were looking at the benefits of projects and how they were linked to the corporate plan. We now understood our business better. Mr Bailey said that there was now increased transparency in the Directorate plans.

Councillor Dorrell asked how they measured non-financial benefits. Mr Bailey said that we can have non-financial benefits (such as measure of customer satisfaction and impact on our customers) and theses were put in the plan.

Councillor Patel wondered if it would leave us open to Audit rules if we attached notional sums to these non-financial benefits.