The basis of the South Gloucestershire contract is to introduce new technology and improve the service. A large proportion of the contract is risk dependent upon the Council's key performance indicators. The Council only pays part of the cost if performance standards are not met. The revenues and benefit staff remain employed by the Council.
The Partnership has enabled the Council to utilise the knowledge of the private sector, which has included a total business re-engineering process. It has introduced a document management and workflow system, a call centre and laid the foundation for a number of innovative service improvements around e-government. Visiting staff have use of tablet PCs and a fraud management system has been introduced. The Council is a lead authority for a DWP funded national project. The contract is recognised by the ODPM, with Pathfinder status for its management arrangements.
The Partnership has resulted in service improvements and annual savings of over £300,000 for the Council.
Additional information provided by the Council
South Gloucestershire Council is a unitary authority to the north of Bristol . It was created in 1996 out of three predecessor councils. At the time of reorganisation the Revenues and Benefits Division had weak business processes and old IT from different suppliers using a number of computer platforms. As a result of poor performance in some areas and organisational weaknesses, the Council took a strategic decision to explore, and then later to enter into, a seven-year strategic partnership starting in 2003 with Unisys Ltd to modernise the revenues and benefits service processes and technology. Up to 80 per cent of the contractual payments to Unisys depend upon the Council's performance, as measured in agreed PI's.
Context
South Gloucestershire has a population of over 250,000, with 105,000 domestic properties, 6,000 commercial properties and 18,000 housing benefit cases. The Council employs over 10,000 people, 120 of whom work in the Revenues and Benefits Division of the Corporate Resources Department. Each year, over £170 million is collected by way of local taxes and 140,000 phone calls are received, along with over 100,000 items of post.
The dysfunctional approach experienced in the revenues and benefits area following reorganisation led to an acceptance by senior officers and members that improvement was needed. The public too were demanding better public services and the performance was bottom quartile in some areas and generally poor when the contract was entered into. The aim was to develop the service and make it better coordinated with other parts of the Council, for example, with housing and social services (the Social Services Financial Assessment of Benefit Team and DWP Pension Team are now co-located with the revenues and benefits division). There was also a wish to greater customer focus.
Some IT skills were held by internal staff, but skills gaps existed around business transformation and change management. The internal capacity in this area has grown over recent years, as experience in the partnership improvements have been seen. Much of the modernisation has been financed through efficiency savings generated by modernising the service and streamlining processes, including all computer systems and processes.
Public private partnership
The partnership is a seven-year contract running from April 2003 through to 2010 valued at over £4 million. No staff transferred to the private sector and delivery of services remains the Council's prime responsibility. The skills of the private sector have been used to help contract for IT provision and business process reengineering to drive and sustain improvement over time. Risk transfer meets PFI requirements, although no funding was required because of the efficiency savings identified. Overall, the contract was recognised by the ODPM, with Pathfinder status for its management arrangements.
The Council continues to perform its main legal responsibilities around revenues and benefits administration. All first line contact for IT support is through the Council and escalation is processed internally. All IT networks, hardware and accommodation is under the ownership of the Council.
Unisys Ltd on the other hand provides services aimed at modernising our mode of operation and moulding this around IT. In 2004 around 25 days of BPR work took place to further drive improvements and implement modern ways of working and technology aimed at driving up standards for customers. Unisys supplied the initial hardware and there is an expectation that this will be refreshed during the second half of the contract, along with ongoing business process review. Unisys and the Council carried out system design and evaluation work jointly and improvements and change will be common place throughout the life of the partnership, as innovation feeds through to the way the service is delivered. Maintenance of hardware is via contractual agreements by third party suppliers with Unisys. The Council in this service area does not contract with external IT companies other than through Unisys Ltd.
Practicalities
The Council has moved revenues and benefits functions from two offices, some 15 miles apart, to a single site (2002). It has introduced a new organisational structure and new job descriptions, along with a major conversion of systems and data to a common operating platform (2002). It has introduced a document management and workflow system, a call centre and laid the foundation for a number of innovative service improvements around e-government, the use of tablet pc's by visiting staff and a fraud management system. The Council is the lead authority for a DWP funded national project. Innovation and modernisation have now become embedded into its working arrangements and culture.
The improvement process has been continuous. This is due to the presence of Unisys as a private sector partner focusing on driving up standards and deploying modern technology to deliver the government's modernisation agenda. The Council has taken the view that the relationship will develop over the seven years of the contract; in its early years there was a lot of change and new ways of working were introduced. Later in the relationship, the Council aims to have continuous improvement and innovation feeding through. This is facilitated through the sharing of risk and reward with Unisys Ltd to ensure that momentum for improvement is not lost.
The Council is now about to enter year three of the contract and the improvements and transformation in the service are visible on the ground - with improved services to customers and improvements in organisational capacity to manage the modernisation agenda. In many respects the Council has laid the foundations for improvement and are starting to build on it. It has the capacity to go forward and deal with the Government's modernisation agenda on a much wider scale. One mechanism that will help to achieve that is the continuous BPR consultancy, which involves and works with staff.
Much of the delivery of this agenda is by Council staff. Revenues and benefits run a call centre, the web-enabled site is developing - the Council now accepts e-payments, and offers electronic forms and a benefits calculator, telephone payments are also taken and more is planned for the future. This may seem run of the mill for many but before its relationship with Unisys back in 1999/2000 the Council had not been able to develop these approaches.
This is a long-term partnership and has involved many potential stumbling blocks, including the pain of moving offices, changing organisational cultures and implementing major systems and new structures while changing business processes to match. The fact that Unisys Ltd has been contracted to the Council over this period has resulted in consistency of personnel and technological advice and, more importantly, payment is made only if a system works.
Because this contract is based on an output specification it responds and anticipates change. During the process the Council has started to build capacity and initiate its own change agenda rather than just respond to external stimuli. Like any partnership, it takes time and effort to build relationships. By experiencing the difficult times of conversions and changes and staying together through them the Council has jointly built a stronger relationship for the future. Getting the right cultural fit with a partner company was vitally important and has contributed directly to the success of this approach.
Future
As a result of the Partnership, the Council has come together with other local authorities to share ideas around common problems and to successfully bid for national funding on joint projects. The synergistic nature of the Partnership is now apparent and the Council's performance moved during 2004/05 into the top half across our BVPI range. There are no backlogs of work and, staff are on career grades, better motivated and qualified to move the organisation forward.
Appendix A - South Gloucestershire case study
Taking 2001/02 (prior to the PPP/IS 3) as a base point, the revenues and benefits service budget was £1,605,358 (net of IT, as this was recharged below the line). By adding inflation uplift for each subsequent year this would give a comparable budget in 2004/05 of £1,850,000.
This is then compared to the actual budget for 2004/05 of some £1.9 million. The Council did not assume that its partnership with Unisys Ltd (referred to internally as IS 3) would be self-financing and in addition account should be taken that the 2004/05 revenues and benefits budget includes the contractual payments due to Unisys under IS 3 of £423,000 per annum.
When the partnership contractual payments are deducted from the 2004/05 budget, to enable comparison between methodologies, this reduces the current years revenues and benefits service budget to £1,545,847, a net reduction of £300,000 on the inflation plus budget shown above. The 2001/02 budget does not include the cost of IT, as that is below the line.
In relation to the efficiency challenge, what barriers did they encounter?
- Risk aversion
- Partnerships