Dual benefits for Burnley

29 Feb 16

Faced with some stark financial pressures, Burnley Council set up a strategic partnership with Liberata. This will provide opportunities to save money, secure growth and allow staff to assist other councils

At the start of the year, Burnley Borough Council began a 10-year strategic partnership – Prosper Together – with a commercial organisation, Liberata, to deliver a range of cross-cutting services.

The partnership represents one third of council services and covers those traditionally offered by commercial providers such as revenues and benefits as well as those that are relatively new to the marketplace such as environmental health. Around 120 employees have transferred to Liberata, representing 104 full-time equivalent roles or one third of the council’s workforce.

The council has dealt with unprecedented reductions in its budget since 2010 and made compulsory redundancies annually to balance its books. The process was ingrained and, as each year passed, employees braced themselves for news of redundancy. The Labour-controlled council recognised this could not continue.

Following a case-for-change report, presented to the executive in February 2014, the Change Programme was established, first to determine the business case then to procure a commercial strategic partner to deliver a broad range of services. The Change Programme was tasked with five key objectives:

●    A minimum saving of 15% annually over the life of the contract.

●    Maintain and improve service standards.

●    Offer innovation and new technology through improved business processing.

●    Protect terms and conditions of the transferred workforce.

●    Provide opportunities for growth in the borough.

The council recognised there would be some degree of trade-off between these objectives. Consequently, the tender evaluation weighted them to reflect the overriding objective to deliver cost savings, which was given a weighting of 50% in overall scoring. The final scope for the tender was determined by identifying services that could not achieve at least 15% saving without performance being compromised (or significant investment required).

To ensure the objectives were delivered on time, key enablers were put in place.

First, the engagement of key stakeholders to ensure their buy-in to the new business model was paramount. Engagement work began early and focused on three groups: the public; councillors; and the workforce, both directly with staff and through liaison with the trade union. Early activity was not about procurement but on clear messages about the size of the financial difficulties. The council’s revenue spending power was £16m in 2015/16, down from £23m in 2010/11, a reduction of 30%, so it was losing organisational capacity when it was most needed.

The council emphasised that, with a partner, it could gain economies of scale and secure opportunities for growth by presenting the town as an attractive location for our partner to use as a northern base from which to serve other clients – so-called north shoring.

Key messages were presented and all stakeholder groups were invited to comment and submit alternative options. Clear lines of communication were maintained, and each group was kept informed of progress, allowed to contribute and were listened and responded to. The council was seeking a pragmatic solution and was willing to adapt its approach.

Feedback was wide ranging and included: a desire for the council to operate as “one council”; protection of terms and conditions of transferring staff including pension body status and a living wage; and, not least, the offer of support to vulnerable citizens as the council transformed its service offer with greater use of online technology.

All these points were factored in. Consequently, when the decision was taken by the executive in September 2015, it received unanimous support from the scrutiny committee and was commended by external audit.

The second enabler was to ensure effective programme management through rigorous governance via a core “virtual” project team. The objective was to enable focus and to remain on track.

We did not have the resources for a dedicated core project team. Instead, a virtual team, comprised of committed, enthusiastic individuals who bought into the council’s vision, contributed to the project on top of their day jobs. Its membership changed as the project progressed to ensure the necessary expertise and knowledge were in place; external financial and legal advisers were brought in from time to time to challenge and provide independent assurance.

The Change Programme had three phases: mobilisation, consisting of soft market testing and producing the initial business case; procurement, from advertising in the OJEU to the conclusion of tender evaluation; and implementation.

The overarching criteria for success of the procurement was not its completion but ensuring that the final partnership would deliver against the five objectives. A restricted procurement route allowed the council to set out its requirements clearly and, before the invitation to tender was issued, the project team spent many hours poring over performance and payment mechanisms, contractual terms and conditions, specifications and business process flows, governance and change control arrangements. Lessons learnt from other procurements, both successes and failures, were analysed and applied. The council wanted to ensure protections were in place to maintain performance and mitigate potential risks in cost control and commercial drift.

The third enabler was incorporating a value-based approach in preparing for transformational change – the hearts and minds approach. We emphasised that the partnership was not a recreation of the old tick-box days of compulsory competitive tendering, but about securing a win-win arrangement for the council and its partner – both should recognise common goals and work to deliver them. This includes the council helping the partner to grow its business by running services for its other clients from Burnley. Burnley Council can offer a skilled, highly regarded workforce to other organisations, including councils, at a lower cost.

To facilitate this, workshops and events were held for those wishing to understand what a strategic partnership would mean for them. The most popular sessions were delivered by staff who had worked in the private sector or within a public-private partnership in which they honestly shared their thoughts and experiences. Training needs were assessed and training has focused on the development of commercial acumen for all middle and senior managers. Staff with client roles have undertaken certificated courses in contract management, especially the respected CIPFA contract management certificate.

Burnley Council faces a tough future – indicative allocations suggest its revenue support grant could be cut to £1.6m by the end of the decade from £7.4m in 2013/14 and the core spending power will be reduced by 14% from 2015/16 to 2019/20 – and it does not regard the strategic partnership as a panacea. Other areas of creativity and innovation will be required.

However, Prosper Together provides opportunities to deliver transformational change to services at a lower cost than would have been the case had they stayed in-house. It also offers an opportunity for staff to support other councils.

Many authorities have embarked on shared service arrangements, but shared services alone do not deliver transformational change; they reduce or eliminate spare capacity. It is only through the scalability offered by a national operation such as Liberata that councils can respond adequately to the challenges we collectively face.
 

  • Helen Seechurn

    Helen Seechurn is director of resources at Burnley Borough Council

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