Re-thinking Building Control Delivering statutory services in a sustainable way. 1 April 2015

Transcription

1 Re-thinking Building Control Delivering statutory services in a sustainable way 1 April 2015

2 Welcome and introductions Catherine Inskip - catherine.inskip@iese.org.uk Catherine Linehan catherine.linehan@iese.org.uk Marie Buckley - marie.buckley@labc.co.uk Andy Carpenter - andrew.carpenter@devonbuildingcontrol.gov.uk Haydn Lewis haydn.lewis@iese.org.uk

3 Agenda Registration and coffee Welcome and introductions The current local authority landscape: Catherine Inskip iese The future for Local Authority Building Control: Marie Buckley LABC Devon Building Control Partnership building a sustainable service : Andrew Carpenter Lunch and networking Round table discussions Shared Services and future delivery model considerations, benefits and pitfalls: Catherine Lineham Panel Q&A Close

4 Who is iese Local Government owned Social Enterprise, part of our sector for 10 years We are a not for profit organisation we help public bodies throughout the UK deliver improved services at less cost A Company limited by guarantee, owned by local authorities - Board of Directors appointed from leaders and members of owning councils We deliver results not reports iese is a not for profit social e We have delivered significant innovations Our people have public and private sector experience and understand local government We help councils build skills and capacity to ensure resilience

5 Aims and Objectives To consider the public sector landscape and the role for local authorities in the future To understand where your authority is along the journey To look at possible future options and alternatives for local authorities To understand the benefits and pitfalls of shared services and alternative delivery models

6 Setting the Scene

7 Public Sector landscape - What we already know 2013 report by Deloitte LLP and Reform, The State of the State highlights the challenges faced in creating an affordable government, including: The UK state is shrinking - work on tackling the budget deficit, reducing liabilities and improving public sector finances will continue to address the increasing state debt interest; Government as we used to know it is unaffordable - the proportion of government spending against GDP will need to reduce, despite the expectation of increased demand for public services; Creating a sustainable model for public services will require deeper reform - including workforce reform, more effective use of technology, focused performance management and efficient ways of working.

8 Public Sector Landscape The Institute for Fiscal Studies (IFS) 35bn of cuts have already happened, a further 55bn have yet to be found. Public spending as a proportion of GDP projected to fall to its lowest since the 1930 s IFS director Paul Johnson "a fundamental reimagining of the role of the state The pressure to achieve greater efficiencies in local public services is a very strong driver for innovation

9 Challenging time for local Public Services

10 Public Sector Landscape The strategy for many local authorities has been to: Look inwards, focused on making the services and organisations internally leaner and more efficient. Public sector needs to redefine fundamentally its services and deliver them in new ways. John Cridland - "Most of what we've done in this parliament, frankly, has been efficiency savings, cuts in head count, and controls on pay. If you're going to make the cuts we now need to make you've got to be far more lateral, you've got to re-engineer the whole model."

11 Public Sector Landscape iese know that Councils are on a journey of improvement (reviewing) to transformation (remodeling) through to innovation (redesign) Councils can quite rightly be in different places in different service areas at any one time. These will reflect the different nature of local services, requirements of the community, political priorities and the public value they are adding.

12 Choices the emerging themes Review Service level change, focusing on internal efficiencies and improvements within existing structures Remodel Organisational level change, embracing greater cross-functional working and multi-skilling, and improving ways of working to move away from professional silos and bringing services to the citizen; Redesign Whole system level change, public value is the key and customer demand is met through new structures and delivery models, the demand itself is reshaped and managed, reframing the whole deal, perceptions changed of the relationship between Councils, residents and businesses.

13 What have we found? Councils must choose the methods and techniques that are most appropriate for their local services and priorities They must also have the capability and capacity to use those methods and techniques Effective leadership involves strong elements of: challenge to existing ways of doing things; challenge to proposed new approaches; and support for agreed actions.

14 Attendee Activity 1. At tables discuss the position of your your authority 2. On post it notes: How would you characterise your council s broad approach to efficiency and change? What is Building Controls current position - Review, Remodel, Redesign some all? (provide details) What is the aspirational position i.e. where does your council want to be?

15 Marie Buckley LABC Director of Network Development

16 The Future of Local Authority Building Control 1 Presentations and their content are the copyright of LABC

17 Background 1 Ø Losing market share and staff Ø Competition Ø Competing for work Ø Competing for staff Ø Recent perfect storm Ø Rapid increase in market activity Ø Local Authority cut backs & morale issues Ø Efficiency measure having a negative effect on business Ø Demographics Ø Ageing profile Ø Staff lured away by flexible packages / interesting work Ø Threatening resilience and increasing costs

18 Typical Profile BR / IN Applications 1 Presentations and their content are the copyright of LABC

19 Competition Ø Our competition has changed Ø National AIs - minimal financial impact on each LA (But does have negative effect on staff recruitment) Ø Now local - targeting core business Ø Major impact on income / staffing / resilience Ø More aggressive local marketing Ø Targeting good repeat professional clients Ø Targeting staff Ø Need to be able to respond Ø But individual LAs do not have the resources Ø Commercialism often stifled by culture of LA 1 Presentations and their content are the copyright of LABC

20 Competition Ø Competitors won t - Ø Undertake rubbish jobs Ø Undertake non-fee earning work Ø Carry out as many inspections Ø Local Authorities will be left with Ø The hard to service work Ø The cowboy builders Ø The non fee earning work Ø Not enough time and resource to compete for the good work Ø Local Authority costs will go up 2 Presentations and their content are the copyright of LABC

21 Financial facts of life Ø Charges regulations govern the fee rates but:- Ø Good jobs dilute the cost of the overhead Ø Lower market share = higher operating costs Ø Higher market share = lower operating costs Ø Market share & marketing are vital Ø It can get worse! 2 Presentations and their content are the copyright of LABC

22 It s not the strongest who survive, nor the most intelligent but the ones who are most adaptable to change. Charles Darwin 22 Presentations and their content are the copyright of LABC

23 100%# Market&share&change&over&the&last&three&years& District'Market'Share' 90%# 80%# 70%# 60%# 50%# 40%# Rapid&market& change&is&possible& 30%# 20%# DCC#Share# AVDC#Share# BNC#Share# DDDC#Share# HPDC#Share#..but&you&can&fight&back& SMDC#Share# SDDC#Share# 10%# 0%# 2011/12# 2012/13# 2013/14# 2 Presentations and their content are the copyright of LABC

24 Size Matters 2 Presentations and their content are the copyright of LABC

25 Size matters Ø Economies of scale Ø Resilience of the service Ø More robust business model Ø Improved service & consistency Ø Greater flexibility market fluctuations Ø Dedicated Business Development resource 2 Presentations and their content are the copyright of LABC

26 Options Ø Do nothing provider of last resort Ø Income goes down Ø Costs to the Authority goes up Ø Lose control of local built environment Ø Outsource Ø Give someone else the problem Ø Procurement process Ø Costs go up Ø Lose control of the service 2 Presentations and their content are the copyright of LABC

27 Options Ø Shared Service Ø Have been successful Ø Economies of scale/resilience/ robust Ø Often difficult to establish Ø Constrained by LA processes & protocols Ø Local Authority Owned Company / WOC / LATC Ø LAs retain overall control but Ø Autonomy to operate more commercially Ø What could that look like? 2 Presentations and their content are the copyright of LABC

28 Local Authority Owned Company Ø Commercial focus Ø Ambition & empowerment Ø Win back lost work Ø Expand range of fee earning services Ø Develop the business Ø Improved branding of single service Ø Dedicated marketing & business development Ø Rationalised Ø One Team, One IT system, One Admin Process Ø Flexible / Mobile working Ø Avoid duplication Ø Make better use of resources 2 Presentations and their content are the copyright of LABC

29 Local Authority Owned Company Ø Staff recruitment and retention Ø Flexible remuneration package Ø Increased development opportunities Ø Job satisfaction Ø Career progression & succession planning Ø Resilience Ø Local Authorities own and retain overall control Ø Public sector ethos Ø Supporting local needs Ø Robust & resilient service Ø Cost effective 2 Presentations and their content are the copyright of LABC

30 Thank You Questions? 3 Presentations and their content are the copyright of LABC

31 The journey a Council can take

32 Devon Building Control Taking our Partnership to the next stage Andrew Carpenter

33 A shared service between three local authority Building Control services 3 Councils Over 1000 sq miles Includes Dartmoor and 72 miles of coastline 19 Surveyors 18,000 inspections/year 2,000 applications/year Turnover 1.4m established in 2004

34 A shared vision Formal agreement 3 equal Partner Councils Partnership Board (2 members per Partner) Access to greater resources Remove internal LA boundaries Better efficiency, consistency and performance Our own name/identity Improved customer reputation Single back office computer system

35 Change to a host model Address the opportunities and lessons learned Establish single account Support services charged at cost Enable investment in IT systems Centralise admin/technical support Maintain/improve current service delivery Remain local to customers Reduce accommodation costs Revised Partnership Agreement

36 Achievements so far Moved from 3 separate offices to 1 Significant investment in ICT Online applications Document management Workflow tools Hardware More staff now remote working Appointed 2 Trainees

37 Maintained/improved service quality Better value for customers and Councils Cost reductions which saw through recession Customer satisfaction Maintaining over 70% market share

38 Current challenges Increasing resilience of service Increasing threat from competitors. Staff retention/succession. Staff on fair/equal pay, T&Cs across the Partnership. Single finance system/business accounts

39 Improve accessibility and storage of Partnership Reserves Ability to respond quickly to changes. Poor performing/restricted Local Authority neighbours Autonomy less non-essential impact on day to day work Not easy to take new partners Marketing activity needs more resources

40 Reduce the cost of the non chargeable work to the councils Establish clear terms for others to join New management structure, to enable new partners Ability to trade for profit Continue with remote working roll out

41 Need to operate in a commercial way if we are to survive in a commercial world But... Remain a Local Authority based building control service (we retain 80% market share largely because of this)

42 iese commissioned to review the options for future service delivery The main drivers: Reduce the risk to the member authorities and to the service Increase efficiency and make savings for member authorities and to the service Provide a structure which facilitates any future expansion Ensure resilience of the service

43 IESE Worked with: Managers Staff, Senior Officers in 3 Councils Elected members Customers Through Workshops, looking at date, statistics and key criteria Financial projections over 5 years

44 IESE Three criteria Desirability Viability Feasibility Considered Doing nothing Outsourcing PSM LATC

45 Conclusion LATC Councils can share surpluses Reduce costs Maintain ownership Maintain reputation Minimise risk DBC currently Has initial approval of all 3 Councils Is developing detailed business plan Drafting governance Establishing provider/s of support services Maintaining business as usual throughout

46 Things to consider over lunch Political challenge and support is crucial for delivering efficiencies and needs to be developed and properly maintained To deliver the level of efficiencies required, councils must develop a strategic approach to identifying and delivering future services

47 Round table discussion 1. What is your reaction and feedback on the morning sessions? 2. What do you think you need to consider for your future service? 3. What are the obstacles preventing you from achieving future service? 4. What methods and techniques are most appropriate to achieve your service aspirations and priorities?

48 Shared Services and future delivery models considerations, benefits and pitfalls Catherine Linehan

49 Shared Services WHY? Savings Streamlining functions Sharing expertise/capacity Reducing costs premises/it/staff/economies of scale Improving service delivery WHY NOT? Control Risk Compromise Cultural fit Costs

50 Questions to ask What is authority trying to achieve? How can it be achieved? Is sharing the right option? What is most appropriate model? Business Case/Options Appraisal

51 In house Current provision Efficiencies Marketing Challenges

52 Commissioning Identify needs/outcomes- procurement contract for services External provider best fit Contract monitoring Framework agreements

53 Commissioning Often seen as negative Creating distance between authority and public Private sector providers benefit shareholders not public Expense/time/resources for procurement process Risk remains with authority

54 Public Public collaboration Local Government Goods and Services Act 1970 Collaboration/Partnership/Joint Venture Can be informal No need to set up special body Preparation time Partners agree terms

55 Public Public collaboration Sell services to other public bodies Set up costs can be modest Parties agree terms Employees seconded No private sector trade Correct choice of partners- aims/ideology/commitment Integrating services/work cultures Need Support of elected members/senior managers Baseline performance/financial data Robust project management Good communications

56 Public Private collaboration Informal or formal arrangement with new legal entity Procurement process to choose partner Trust and honesty Share risk and reward Cultural change Clear exit strategy Shared organisational and service ethos Time/cost to establish Loss of control Understanding of elected members

57 Incorporation Separate legal entity from members/shareholders Board of directors manage business/authority not involved in day to day management Articles of Association set out the rules for company operations Company interests can be distinct from shareholders Limited liability shares/guarantee Subject to independent statutory control Numerous shareholders possible public/private Shareholders can change Isolates risks and liabilities contracts in own name Company can be sold or transferred Separate accounts Quicker decision making Individual brand/image Staff transfer

58 Incorporation Legal requirements and costs of incorporation Ongoing operational costs Loss of control Trading history Expenses insurances, filing costs, auditing costs etc Tax implications Directors conflict of interests Additional tier of organisation

59 Teckal Company Public Contract Regulations do not apply Passport work in-house award Only up to 20% trading activities permitted outside of authority or authorities Tests Control: authority or authorities exercise control over entity similar to that of own department(s) Function: more than 80% of activities carried out with controlling authority or authorities No private sector capital participation in controlled entity

60 s95 Trading Company Local Government Act 2003 If an authority has power to undertake an activity it can consider whether to trade commercially Can only use a Company: shares/guarantee/unlimited/ Industrial Provident Society No LLP/Charitable Trust/Non Charitable Trust/Joint Committee (Part V Local Government and Housing Act 1989) No funding or other assistance permitted unless at full cost recovery e.g. accommodation, goods, services, staff

61 s95 Trading Company No passporting competitive procurement Free to trade no restrictions Business Case statutory requirement

62 Business Case Objectives Investment resources Risks Outcomes required Markets Stakeholders/Investors Funding start up and running costs Staff Assets Controls Market testing of service

63 Questions

64 Plenary One thing that surprised me Question I want to ask Things I learnt today Things I learnt today

65 Close and round up