Back Office Shared Services Implementation Study
A new direction in challenging times
High-level business case for joint working
Nuneaton & Bedworth and Rugby Borough Councils
Final Draft
v0 16
January 2010
Sector1
Table of Contents
Executive summary......
High level options analysis......
Performance business case......
Financial business case......
Strategic business case......
Conclusions and recommendations......
Next Steps......
Introduction......
The purpose and scope of the business case......
The steps involved in building a successful strategic partnership......
Stakeholder engagement......
Background......
What are other authorities doing?......
Financial and performance business case......
Performance comparisons......
Summary of performance business case......
Financial business case......
Summary of financial business case......
Strategic business case......
High level comparison......
Partnerships......
Local priorities and policies......
Resilience and capacity......
Capacity for improvement and change......
Realising savings......
Management team capacity and management structures......
Members......
Raising the profile......
Other issues......
Options comparison......
Summary......
Conclusions and recommendations......
Risk-based decision making......
Next steps......
Vision and protocol for moving forward......
Further detailed business case......
Making the change happen......
Appendix A......
Appendix B......
Appendix C......
History of local government reform in England......
Context of Local Government Re-organisation 2007......
Current context of Local Government Re-organisation 2009......
Newly created Unitary Authorities effective from April 1st 2009......
Unsuccessful proposals......
Further changes......
Draft Proposals for Devon......
Draft Proposals for Norfolk......
Draft Proposals for Suffolk......
Workshop notes discussion point and barriers......
Appendix E......
Opportunity Matrix and Direction of Travel......
Executive summary
High level options analysis
In November 2009 Nuneaton & Bedworth Borough Council (NBBC) and Rugby Borough Council (RBC) commissioned Sector to undertake this business case for joint working focusing in particular on the consideration of a shared Chief Executive.
This is a high-level business case the purpose of which is to look at the options for joint working going forward. These options include:
Option 1Two separate authorities under separate management (do nothing);
Option 2One Chief Executive – but both authorities would remain separate (ad hoc opportunities for joint working could be taken when they arise);
Option 3A formal partnership including joint Chief Executive and joint approach to the delivery of some services mainly support services;
Option 4A formal partnership including joint Chief Executive and joint management team and combined workforce in some or all services;
Option 5A full merger between the two authorities including joint political management arrangements.
These options represent a direction of travel. So the first decision to be taken is whether this is the direction of travel the Councils wish to take. This moves us from option 1 to option 2. The next decision to take is how far the Councils initially want officers to progress down this path. This then moves us from option 2 and into option 3 and then on to option 4. The options are therefore milestones on this direction of travel. An important feature of this proposal for decision makers is that progress will be based on a series of additional business cases that will determine how the transformation of each operation or service is to be brought together, the timescales for those changes and the level of benefits anticipated. A key feature to progressing with this direction of travel is the pace of change the Councils wish officers to adopt. This will determine how quickly available benefits can be accessed.
Option 1 would provide a fall back position if the business case does not show substantial benefits from joint working. This option is not discussed in any detail in this document. Option 5 we understand is not politically viable but has been included for completeness.
This high level business case examined the opportunities for joint working from three perspectives:
Performance business case
Our findings from the performance business case are summarised as follows:
- Though performance is not identical, there is enough common ground on which joint working can take root and be effective. Assessing opportunities for joint working and implementing joint working approaches acts as a review process for both Councils that will help to improve performance;
- In our experience, where Councils have similar levels of performance this helps with the implementation of change and joint working. The similar levels of performance achieved by the Councils presents a positive environment for joint working;
- The performance of NBBC and RBC is broadly consistent with the wider Warwickshire area. RBC and NBBC have the opportunity to be the lead district councils in this area encouraging a new way of working together which meet the challenges facing all local authorities; and
- There are a number of change initiatives currently taking place across Planning, Housing and Revenues and Benefits. The Councils need to agree on a joint approach to change before embarking on changes to these larger more complex service areas.
As a result of these findings, we suggest there are significant performance benefits available to the Councils from joint working.
Financial business case
Options Comparison
Option 2 - One Chief Executive – but both authorities would remain separate
At this stage, it is anticipated that potential savings accruing from option two would be limited to savings resulting from the appointment of one Chief Executive rather than two, and a reduction in the direct support for this post. These savings should be considered in the context of a review of senior management across both authorities to maintain clear lines of management accountability and appropriate capacity. A restructured single senior management structure should allow for the same or increased capacity at reduced cost.
The cost of transition to a shared Chief Executive would be relatively low. Savings can be released and some benefits accrued simply from a shared Chief Executive meaning reduced salary costs for both councils, although to release the full savings and maintain effective capacity, a management review will need to be undertaken.
Option three – formal partnership and a structured approach to joint working
Based on the assumptions made within this report, it is anticipated that option three could potentially generate savings in the region of £0.7M to £1.6M. These figures include the benefits achieved under option 2. Shared between the councils.
The costs of transition would be higher than for option two, including the establishment of an improvement team to carry out a number of services reviews, and entering into formal shared service arrangements for a number of services.
Option four – A formal partnership including joint chief executive and joint management team and combined workforce in some or all services;
Some further savings may be generated from a full partnership arrangement and combined workforce. It is anticipated that the bulk of the additional savings would be generated within corporate services. Based on the assumptions made within this report, it is anticipated that option four could potentially generate additional savings in the region of £2.5M to £4.5M across both the General Fund and Housing Revenue Account. Shared between the councils.
The costs of transition would be highest for option four, significantly more than option three, since there would be a number of legal issues around the creation of a shared workforce, and significant change management costs.
Strategic business case
The strategic business case builds on the financial and performance analysis by looking at a number of strategic issues to test out the opportunities and limiting factors to joint working under a single chief executive.
Options Comparison
Option 2 - One Chief Executive – but both authorities would remain separate
This option would make more effective use of the leadership capacity of the chief executive. It would help to build the reputation of the two authorities, and lay the groundwork for potential further joint working. However it would be unlikely to offer significant improvements in resilience across services and would not allow for access to significant financial savings.
Option 3 – A formal partnership including joint Chief Executive and joint approach to the delivery of some services mainly support services
A formal partnership would maximise the potential for realising savings, provide a high-profile example of joint work, but would avoid significant set-up costs and risk issues, while leaving the way open for full service merger. Existing relationships would need to be managed but would be unlikely to be threatened.
More information on the detailed joint working opportunities is included in the matrix in Appendix D. The detailed approach to each of these service areas needs to determine through the detailed business case process.
Option 4 –A formal partnership including joint Chief Executive and joint management team and combined workforce in some or all services
This option would provide the greatest opportunity to increase capacity and reduce costs, but would also generate the highest levels of impact on existing relationships, the highest costs, and the highest level of risk.
Conclusions and recommendations
As a result of our analysis we recommend that the councils appoint a shared Chief Executive (option two) and establish a formal partnership of joint working (option three). The imminent departure of Rugby Borough Council’s Chief Executive creates a window of opportunity for pursuing Option three on a trial basis, and at a reduced cost.
Option four could be progressed to in the future once option three has been effectively established, the full scope of savings identifies and risks can be managed from a position of experience. The figure below summarises our approach.
Figure 1: Joint working strategy direction of travel
As the diagram above shows, the recommended approach focuses on establishing joint leadership, transformation and change, and support services.
In particular our analysis has identified:
- The specific individual requirements of the Councils relating to the needs of two sets of political leaders and residents in service delivery
- The comparable levels of performance at the whole Council level and the complexity of the performance picture at a more detailed level
- The difference in approaches to change and transformation
- The wide range of partnership arrangements in place at both Councils
As a result, our recommendation focuses on establishing a strong ‘strategic core’ based on Senior management, transformation team and other strategic corporate services as appropriate that will place the emphasis for joint working on reduced risk activities while still achieving significant benefits.
The higher risk service areas; those with ‘front line’ delivery responsibilities are in general both more complex and larger in nature. Establishing a strategic core that is aligned through a joint approach will achieve the following:
- Clarity of purpose in terms of outcome from joint working priorities for both Councils and a structure to support this
- One approach to change
- Allow opportunities for joint working to be identified at the strategic level (simplifying the business case process)
- Reduce the levels of risk involved in joint working across the organisations.
Once the ‘core’ of the organisations is established through a joint approach, further joint working and the potential for option four (joint management team and combined workforce in some areas) will be simplified, as the organizational infrastructure will already be common to both Councils. In this situation, a detailed assessment of where joint working will benefit the two Councils can be made on a case-by-case basis but implemented with relative ease.
Comparable levels of performance are an area of strength that can be built on and suggests that there are no performance barriers that would prevent the councils from moving forward with options two and three. Howeverestablishing a joint change team and methodology will be critically important to ensure the approach to change and improvement is strategically aligned to the corporate priorities of both organizations. The joint change team needs to clearly define a new approach to change that is common to both Councils and communicate this effectively.
Based on the assumptions made within this report, it is anticipated that option three could potentially generate savings in the region of £0.7M to £1.6M across, shared between the councils.
The costs of transition would be higher than for option two, including the establishment of an improvement team to carry out a number of services reviews, and entering into formal shared service arrangements for a number of services.
The financial and performance analysis therefore suggests that there are achievable savings to be had, and that the best balance of cost and benefit appears to be obtainable by the speedy appointment of a shared Chief Executive (option two), and the establishment of a formal partnership and joint working (option three). The cost-benefit analysis of full service merger (option four), along with substantially higher realisation risks, suggests that this option should only be considered once option three has been effectively established, the full scope of potential savings has been identified, and risk can be managed from a position of experience in joint working.
Our strategic analysis suggests that there are areas of strong synergy between the Councils but an equally strong requirement to maintain local service priorities and partnership arrangements. As a result, our recommendation is that the Councils continue work on joint financial analysis and quickly establish a shared vision and protocol for joint working to ensure risks to local performance, priorities and partnerships are mitigated. We strongly recommend establishing a joint change team that will carry out a management review and manage communications.
Next Steps
More detailed next steps and recommendations are included after the Performance, Finance and Strategic business cases within this document.
Overall the key next steps for NBBC and RBC are to appoint the joint Chief Executive, agree the shared vision, and ways of working, and set up a joint business transformation team. It will then be necessary to establish the individual business cases for service clusters and joint working projects in more detail on a case-by-case basis.
In order to move quickly the appointment of a joint Chief Executive could be progressed alongside the development of further business cases and agreement of joint working arrangements.
Introduction
The purpose and scope of the business case
In November 2009 Nuneaton and Bedworth Borough Council and Rugby Borough Council commissioned Sector to undertake this business case for joint working focusing in particular on the consideration of a shared Chief Executive.
This is a high-level business case the purpose of which is to examine the options for joint working going forward. These options include:
Option 1Two separate authorities under separate management (do nothing);
Option 2One Chief Executive – but both authorities would remain separate (ad hoc opportunities for joint working could be taken when they arise);
Option 3A formal partnership including joint Chief Executive and joint approach to the delivery of some services mainly support services;
Option 4A formal partnership including joint Chief Executive and joint management team and combined workforce in some or all services;
Option 5A full merger between the two authorities including joint political management arrangements.
These options represent a direction of travel. So the first decision to be taken is whether this is the direction of travel the Councils wish to take. This moves us from option 1 to option 2. The next decision to take is how far the Councils initially want officers to progress down this path. This then moves us from option 2 and into option 3 and then on to option 4. The options are therefore milestones on this direction of travel. An important feature of this proposal for decision makers is that progress will be based on a series of additional business cases that will determine how the transformation of each operation or service is to be brought together, the timescales for those changes and the level of benefits anticipated. A key feature to progressing with this direction of travel is the pace of change the Councils wish officers to adopt. This will determine how quickly available benefits can be accessed.
Option 1 would provide a fall back position if the business case does not show substantial benefits from joint working. This option is not discussed in any detail in this document. Option 5 we understand is not politically viable but has been included for completeness.
The steps involved in building a successful strategic partnership
If, as a result of the business case, it is agreed that this is the right strategic direction for the two councils, then other more detailed and operational activities will need to be undertaken. The diagram below identifies the key steps involved in building a successful strategic partnership. This process will be expanded on and contextualised in the next steps section of this document.
Figure 2: Overview of process - Strategic Partnering
Stakeholder engagement
The process applied in developing this business case has taken the first step in stakeholder engagement. It was recognised by both councils that this process would be critical to the success of this project. Sector and both sets of the Councils management teams (at Director and Chief Executive level) have endeavoured to engage key stakeholders along the way. At this stage stakeholder engagement has mainly focused on Members Leaders and Heads of Service / Assistant Directors. Although some communications have been made with staff and a press statement released. A workshop was held with Heads of Service/Assistant Directors upwards to build on our analysis and refine our findings. A number of discussion points and barriers were identified at the workshop and as far as possible we have included them in both our analysis and recommendations. More detail of the workshop material can be found at Appendix E.