Summary
Worcestershire County Council has a population of 555,400 and is situated in Worcestershire. In 2007/08 the council spent £629.8 million on all council services. During SR04 the council developed the Corporate Strategy Week to enable officers and councillors to use benchmarking data to plan and implement efficiency savings. This planning enabled the council to create £4.7 million of back office efficiencies (18 per cent of total efficiencies) during SR04.
The situation
Prior to SR04 long-term under-investment in back office functions including finance and information and communications technology (ICT) had left the council with outdated infrastructures and compartmentalised work processes. In 1998 the council began to modernise its back office functions to make efficiency savings and improve VFM. The finance directorate was the first department to be modernised.
Approaches used and efficiencies realised
Benchmarking with other councils
The Director of Financial Services led the restructuring of the finance directorate, by gathering examples of notable practice from other English county councils.
Financial and accounting processes were streamlined with the introduction of a new financial management system, which removed the duplication of accounting and financial processes. The council used the implementation of the financial management system to move financial accounting arrangements into individual directorates. The Heads of Service used the new arrangements to plan for their efficiency savings. Finance teams were based in front line directorates promoting an integrated approach to service and financial management.
Councillors and officers reviewed the project and identified two success factors. First, the use of comparative information gathered from other county councils; and second, an evaluation of the efficiency savings made. The council further developed its use of benchmarking information to review its performance and gradually a culture of self-analysis evolved at the council.
Taking benchmarking further
The council undertook its first service-wide review of performance and efficiency in 2003. The review comprised three elements.
- A mini comprehensive spending review: service heads provided a synopsis of over 300 council services to identify the relevance of activity to corporate priorities, service costs and key performance data, to enable councillors and senior management to make a value for money assessment of services
- An external analysis: the council commissioned an external statistical review of its services to benchmark its performance against other county councils in a number of areas including demographic, financial and service performance indicators
- The council introduced Corporate Strategy Week (CSW), an extended workshop in which cabinet members and senior managers could consider the issues faced by each directorate
As a result, the Council was able to identify areas of relatively poor performance, to identify opportunities for improvement and to prioritise improvement projects by reference to corporate priorities. The outcomes of the discussions formed the basis of service development plans in 2004/05.
The council deemed CSW a success and it became an annual event during SR04. The CSW formed the core of the council's financial and service planning process.
The council developed the documentation used for the mini comprehensive spending review into service reports that were linked to the council's medium term financial strategy and efficiency plans. The reports also included an assessment of the risks and implications of planned budget reductions:
- Gold: acceptable change, easy to deliver and no impact upon the corporate plan
- Silver: acceptable though slightly unpalatable change, possible to deliver with officer input and some impact upon the corporate plan
- Bronze: unpalatable change (but will be considered if resources are better used elsewhere), delivered with considerable officer and management input and significant impact upon the corporate plan
Officers also produced factsheets for councillors to enable them to better understand the implications of changes to services.
The council used the CSW to plan and create £4.7 million of back office efficiencies (18 per cent of total efficiencies) during SR04. This included £250,000 of savings from the rationalisation of office space and the leasing of spare space to the local PCT.
Plans for CSR07
The Council used the CSW in 2007 to plan efficiency savings during CSR07; including a further £2 million of efficiencies in corporate services by 2010/11.
Learning points
- Worcestershire CC took a transformational approach to back office efficiency during SR04
- The council first used benchmarking data to restructure its finance department. This enabled the council to use benchmarking information to review its efficiency performance, and to develop a culture of self-analysis which led to the CSW
- The annual CSW involves councillors and senior managers meeting to discuss service improvements, efficiency savings and VFM plans. Data from the council's annual statistical review is used in the CSW which forms part of the council's financial planning and budget setting processes
- Budget reduction options for the CSW are assessed using a gold, silver and bronze ranking criteria
Questions to consider for your council
- What approach has your council taken to back office efficiency during SR04?
- Transactional
- Transitional
- Transformational
- How might this case study enable you to take a transformational approach to efficiency during CSR07?
- Have you used benchmarking techniques to improve services and make efficiency savings?
- Have you conducted a statistical review of your council?
- Do you use benchmarking data as a regular part of your financial planning and budget setting processes?
- Are you planning to use benchmarking techniques to plan for efficiency savings in CSR07?