Blackpool Council: Internal Audit
Assuring Quality Services for Blackpool
Internal Audit Report
Review of the
Accommodation
Strategy
Audit Team:
Date:
Tracy Greenhalgh
Steve Roberts
9th February 2009
Blackpool will be a Vibrant, Inclusive,
Healthy, Safe and Prosperous Town
Blackpool Council: Internal Audit
Assuring Quality Services for Black pool
1.
Executive Summary
1.1
At the outset of the Office Accommodation Project a Risk Register was developed at a
workshop attended by key stakeholders. Each identified risk was evaluated and assigned a
score for likelihood and impact of occurrence. The scope of the audit was to review the Risk
Register, focusing on those risks still identified as high. We sought to establish the current
position of each of these key risks and the actions that have been taken, or are being
planned, to reduce them.
1.2
Although high level timescales for building and occupying the new civic offices are set out
in the Project Mandate, currently there is no main project plan to direct implementation. We
recommend that the development of a Project Initiation Document and main project plan
should now be addressed as a priority. This should formally define the detailed objectives
and purpose of the project, establish whether the high level delivery targets are achievable
and ensure that contributing work streams have clear guidance to inform lower level
planning.
1.3
A high level project structure is documented in the Project Mandate, consisting of a Project
Board, Stakeholder Group (Accommodation Strategy Group) and Programme Manager.
The Head of Strategic Asset & Estates Management has been appointed to act as
Programme Manager. The absence of any Human Resources (HR) representation on the
Accommodation Strategy Group is a cause for major concern amongst senior
management, as many of the high scoring project risks relate to personnel and staffing
issues. We recommend that as a matter of urgency, steps should be taken to secure HR
representation on the Accommodation Strategy Group. The structure suggests that an
Executive Director will undertake the key role of Senior User but no appointment has yet
been made and we recommend that this should now be addressed.
1.4
Concerns were expressed about the lack of a formal project structure and some confusion
exists over the current project organisation, including the roles of the various groups
involved. We recommend that a review of the current project organisation should be
undertaken, to establish a structure that provides an appropriate framework for the project
to operate within, and facilitates management and decision making in line with the
Blackpool Method.
1.5
We could not evidence the formal assignment of key project roles and responsibilities. We
recommend that the roles and responsibilities for delivery of the project should be formally
assigned, communicated and documented in a Project Initiation Document.
1.6
The level of communication emanating both to and from the project at this stage appears to
be very limited and some key stakeholders believe the profile of the project needs to be
raised. We believe that communication regarding the project now needs to be improved
and recommend that a formal Project Communication Plan should be developed.
1.7
Currently the Accommodation Strategy Project does not have any formal plans to address
the cultural change required and there is no appointed lead officer with responsibility for
managing and delivering these changes. We recommend that an appropriate officer should
be appointed to lead on delivery of the necessary changes to culture and working practices.
1.8
We gratefully acknowledge the assistance of Stephen Waterfield and the managers and
staff across the Council who contributed to the review.
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Blackpool Council: Internal Audit
Assuring Quality Services for Black pool
2.
Overall Opinion and Assurance Statement
2.1
We consider that the project is currently inadequately controlled to address the level of
business risk. The absence of formal project plans, detailed objectives, a clear organisation
structure, and formally assigned roles and responsibilities need to be addressed to take the
project forward cohesively and direct implementation and delivery.
3.
Issues Arising
3.1
Project Risk Register
3.1.1 At the outset of the Talbot Gateway Office Accommodation Project, key
stakeholders attended a risk workshop facilitated by Risk Services. A Project Risk Register
was developed at the workshop and each identified risk was evaluated and assigned a
score for likelihood and impact of occurrence.
3.1.2 Mitigations to reduce each risk were then identified and the residual risk awarded a
net score, which was then recorded on the Risk Register. A colour coding system was
added to facilitate easy identification of the key risks.
3.1.3 Risks on the register are classified under the following headings : 






Project / Programme Management Risks
Financial Risks
Political / Economic Risks
Human Resources Risks
Social Environmental Risks
Legal / Contractual / Regularity Risks
Physical / Technological Risks
3.1.4 The Risk Register is included in project reports presented to the Chief Executive
Liaison Group and Accommodation Strategy Group. The Risk Register has been
subsequently reviewed at an Accommodation Strategy Group meeting and was last
updated in March 2008. We recommend that arrangements should be put in place for
regular, ongoing review of the Project Risk Register. A further review should be undertaken
in the near future, to take account of recent project developments and any impact resulting
from the recent economic slowdown (Recommendation 1).
3.2
Project / Programme Management Risks
Blackpool Method
3.2.1
The project will follow the new Blackpool Method project management methodology
and we understand that the Council’s Project Support Officer will undertake a formal project
support role. We are aware that some of the key players involved in the project have
already received training in the Blackpool Method. We recommend that the Head of
Strategic Asset & Estates Management should ensure that all staff assigned to key project
roles attend appropriate training in the Blackpool Method (Recommendation R2).
Project Plans
3.2.2 A Project Mandate document has been produced which outlines the objectives,
benefits, business case, headline risks and key issues relating to the Project.
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Blackpool Council: Internal Audit
Assuring Quality Services for Black pool
3.2.3 The Project Mandate anticipates that a start on the new civic office build will
commence in 2010, with completion expected in 2012. The Mandate recognises that this
timescale requires the Council to reach conclusions on some important issues and that
work on the project needs to commence in the near future. This is necessary to ensure the
Council’s specification can be agreed at an early stage and work can commence on
detailed service specifications.
3.2.4 Although these high level timescales for completing and occupying the new civic
building have been set, currently there is no Project Initiation Document (PID) or main
project plan to direct the implementation and delivery within this timescale. Without specific
objectives, outputs, plans and milestones for delivery of the main project, the underlying
work streams have no model to inform their own delivery and milestone planning.
3.2.5
There is risk that the project will become fragmented, lacking cohesion and clarity
in terms of the purpose, objectives and timescale for delivery of the required outputs. We
recommend that development of a PID and main project plan should now be addressed as
a priority. This will formally define the detailed objectives and purpose of the project,
establish whether the high level delivery targets are achievable and ensure that contributing
work streams have clear guidance to inform lower level planning (Recommendation 3).
3.2.6 Mitigations for many of the main project risks identified on the register depend on
resolution of issues being addressed by these work streams. We recommend that each risk
on the register is cross-referenced to these work streams, to ensure that all of the identified
mitigations are being addressed and have clear ownership and responsibility for delivery
assigned (Recommendation 4).
Project Organisation Structure
3.2.7
A high level project structure is documented in the Project Mandate, consisting of a
Project Board, Stakeholder Group and Programme Manager. The Head of Strategic Asset
& Estates Management has been appointed to act as Programme Manager. The Project
Board is chaired by the Assistant Director Built Environment, and has representation from
the Senior Supplier (Muse) and a Senior User. Although the structure states that an
Executive Director will take on the key role of Senior User, no appointment has yet been
made. We recommend that this should now be addressed to ensure the Project Group has
formal user representation and input from an early stage (Recommendation 5).
3.2.8 The Accommodation Strategy Group is currently undertaking the Stakeholder Group
role. The absence of any Human Resources (HR) representation on the Accommodation
Strategy Group is a cause for major concern amongst senior management, given that many
of the high scoring project risks relate to personnel and staffing issues. We appreciate that
HR resource is heavily committed to the current pay review project. However, given the
importance of the Accommodation Strategy Project, we recommend that as a matter of
urgency, the Assistant Director Built Environment should take steps to secure HR
representation on the Accommodation Strategy Group (Recommendation 6).
3.2.9
Concerns were expressed by Council senior managers about the lack of a formal
project structure and there is confusion over the current project organisation, including the
titles and roles of the various groups involved. We believe that a more structured and
cohesive approach now needs to be established to take the project forward. We
recommend that the Head of Strategic Asset & Estates Management should undertake a
review of current project organisation. The objectives should be to establish a structure that
provides an appropriate framework for the project to operate within, and facilitates
management and decision making in line with the Blackpool Method (Recommendation 7).
3.2.10 We could not evidence the formal assignment of specific project roles and
responsibilities. We recommend that in accordance with the Blackpool Method, roles and
responsibilities for delivery of the programme and sub-projects should be formally assigned,
communicated and documented in a PID (Recommendation 8).
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Blackpool Council: Internal Audit
Assuring Quality Services for Black pool
Communication
3.2.11 Meetings of the Accommodation Strategy Group are taking place on a monthly
basis. Agendas and minutes are produced for each meeting. This is a complex project with
a very wide range of stakeholders that will continue to grow as work progresses.
3.2.12 The level of communication emanating both to and from the project at this stage
appears to be very limited. Some of the key stakeholders that we spoke to believe the
profile of the project is low and now needs to be raised. Senior and middle managers are
receiving minimal information about progress. At this early stage, very little information
about the Project has been communicated to Council staff. Many of the identified project
risks relate to personnel and staffing issues, including staff resistance and negative morale.
The risk register recognises the need to survey staff to identify requirements and sell the
benefits of the scheme to staff.
3.2.13 Poor communication resulting in low buy-in to the project is identified on the
register as a key risk and we believe that communication to and from the project now needs
to be improved. We recommend that the Head of Strategic Asset & Estates Management
should develop a formal Project Communication Plan, in line with Blackpool Method
guidance; to help in the development and management of effective communication
channels with all stakeholders, including partner organisations. The Communication Plan
should also define the plans for communication with Council staff and managers
(Recommendation 9).
Culture Change
3.2.14 Cultural change in working practices is identified as a major risk to the successful
delivery of the accommodation strategy. It is important to recognise that this is not simply a
building project. The accommodation strategy depends on significant changes in culture
and working practices being achieved, to enable the Council to continue to deliver services
effectively from a new civic building with considerably less accommodation space than
current Council premises offer.
3.2.15 Some processes are in place to support home working and flexible working, for
example a corporate Home Working Policy has been developed and guidance on mobile
working and hot-desking is available on the Intranet. Some departments have already
introduced home and flexible working arrangements for staff. Mobile working is also being
introduced for some services across the Council.
3.2.16 Asset Management are currently working in conjunction with ICT to develop hotdesking facilities in more Council premises to facilitate the new working styles. To aid in the
development of new working practices, we recommend that the Head of Strategic Asset &
Estates Management should arrange for feedback to be obtained from mobile, flexible and
home working teams, to identify any problems, issues and concerns so that these can be
addressed by the appropriate support services (Recommendation 10).
3.2.17 Currently the Accommodation Strategy Project does not have any formal project
plans in place to address the required cultural change. Although ICT, Asset Management
and Facilities Management are working to make possible the new ways of working, there is
no appointed lead officer with responsibility for managing and delivering these changes.
3.2.18 We believe it is important not to under estimate the importance of this to successful
project implementation. It will involve significant changes in the way service managers will
have to manage staff and deliver services in the future. We recommend that the Head of
Strategic Asset & Estates Management should consider appointing an appropriate officer to
lead on delivery of the necessary changes to culture and working practices and co-ordinate
the work being undertaken to facilitate new ways of working (Recommendation 11).
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Blackpool Council: Internal Audit
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3.3
Financial Risks
3.3.1 The contractor chosen to build the development is Muse. They have been advised
of values by the Council, included the maximum investment that the Council is prepared to
put into a new civic building that would accommodate 900 staff. We understand that the
costs have been benchmarked by the Gensler consultants, who believe they are
reasonable. The Service Agreement being developed with Muse is following European
Union procurement guidance. There is a clause in the contract stipulating that any savings
on the project costs are shared between the Council and the contractor.
Affordability Gap
3.3.2
A detailed project financial model has been developed, which shows that an
affordability gap exists in the first few years following completion and occupancy of the new
civic building. We are aware that the Assistant Director Performance and Finance and the
Chief Financial Officer are currently looking at ways of addressing the identified gap.
Contractor Default
3.3.3 As a contingency measure we recommend that the Head of Strategic Asset &
Estates Management should consider developing a plan of alternative strategies in the
event of the contractor defaulting (Recommendation 12).
3.3.4 We also recommend that the Head of Strategic Asset & Estates Management
should consider developing a Project Exit Strategy in case the worst case scenario should
occur and the whole project had to be abandoned (Recommendation 13).
3.4
Political / Economic Risks
3.4.1 Political approval for the project has now been obtained from the Council Executive.
However, confidence in the Council’s ability to deliver the required project outcomes is still
lacking amongst some senior managers. We believe that the Head of Strategic Asset &
Estates Management now needs to address ways of changing these negative views.
3.4.2 We have already recommended that the appointment of an Executive Director as
Senior User should now be addressed as a matter of urgency. Formal user representation
on the Project Group may help promote senior management buy-in.
3.4.3 We also believe that raising the profile of the project, improving communication with
senior managers and developing a robust project structure with clearly defined project roles
and responsibilities, will build confidence in the project amongst senior managers and
promote buy-in. We have already made recommendations in this report relating to these
issues.
3.5
Human Resource Risks
3.5.1 Recruitment and retention of Council staff is identified as the highest scoring risk on
the Project Risk Register. We have noted above that the absence of any representation
from Human Resources is of major concern to some senior managers, given that many of
the identified project risks relate to personnel and staffing issues.
3.5.2 The risk register notes that this is regarded as a very high risk for some services
and requires them to develop individual controls, solutions and responses to reduce the
risk. We recommend that directorates should be encouraged to develop local recruitment
and retention risk registers, to help identify and address the issues specific to their services
(Recommendation 14).
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Blackpool Council: Internal Audit
Assuring Quality Services for Black pool
3.6
Social / Environmental Risks
3.6.1 Loss of key project staff is identified as a significant risk and it is recognised that
succession and business continuity plans need to be developed to address the risk. We
recommend that the Assistant Director Built Environment should now address the
development of these plans (Recommendation 15).
3.6.2 ICT are currently developing a service continuity strategy based on a dual data
centre configuration, with server farms located at two separate buildings providing the
resilience. One of these data centres is currently located at Progress House. As this will be
vacated as part of the accommodation strategy, the project will have to address relocation
of this data centre. This is a major project in its own right, with the cost of relocating the
data centre in the new civic building estimated at between £2.5 and £3 million. ICT are
currently developing a strategy for carrying out the relocation whilst maintaining adequate
ICT service continuity arrangements.
3.7
Physical / Technological Risks
ICT Infrastructure
3.7.1 A key requirement of the Accommodation Strategy which many senior managers
have concerns about is delivery of a reliable ICT infrastructure that effectively meets the
needs of their services.
3.7.2 ICT are currently developing an ICT Policy that recognises the need to develop a
flexible, agile and reliable ICT infrastructure that will support the modern flexible working
styles and mobile organisation structures demanded by the accommodation strategy. It is
essential that ICT strategy reflects the needs of user department services and does not
dictate them.
3.7.3 Accordingly, the project needs to develop and agree an ICT strategy with all Council
departments to enable ICT to provide the technical solutions that meet the flexibility, agility,
security and performance needs of the Council in the new civic building. We understand
there are also issues concerning ICT budgets and the funding for ICT system and
infrastructure requirements that will need to be resolved to deliver a corporate ICT
infrastructure solution. We recommend that the Head of Strategic Asset & Estates
Management should liaise with the Head of ICT to agree a method and approach that will
deliver an ICT Policy and strategy that addresses the working practice requirements of the
Accommodation Strategy and business needs of the departments (Recommendation 16).
Information and Records Management
3.7.4 The proposed move to smaller accommodation gives rise to an identified risk area
relating to storage space and document retrieval. The reduction in accommodation space
requires that paper documentation and records currently held by the Council must be
reduced by around one third. Work is being progressed by Asset Management to address
this and a pilot study was recently undertaken in the Children & Young People’s
Department. Further work is continuing based on the findings of this pilot study and various
stage options for the storage of corporate paper records are being looked at. These include
both in-house and contracted out storage, or possibly even a hybrid of the two solutions.
3.7.5 Another initiative is currently underway to review existing Council information
management practices and develop new principles and standards to feed into a new
Corporate Information Management Strategy. The Council Information Management Group
has recently been revived to assist in promoting and developing the new strategy.
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Assuring Quality Services for Black pool
Travel / Parking
3.7.6 The risk register recognises that limited car parking space is planned for the new
civic office. We understand that initial plans provide for about 400 car parking spaces in
total. This constraint will require a significant change in the way that many staff travel to,
from and during work. Mitigation is initially being addressed by the development of a
Council Travel Plan and the Tourism and Regeneration directorate has recently recruited
two transport / travel planning staff to take this forward.
Portfolio Management
3.7.7 The risk register identifies the need to provide a dedicated facilities management
function for the new civic building, to ensure its effective operation. Work is being
progressed by Portfolio Management to address this and a solution is being developed that
is based on the Royal Institute of Chartered Surveyors (RICS) model. The RICS model sets
out in detail the recognised standard service areas and service cost categories relating to
buildings management. This provides a detailed baseline guide for developing the portfolio
management services, costs and charges for the day to day operation and maintenance of
the new civic building.
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Assuring Quality Services for Black pool
4.
Agreed Action Plan
Recommendation
R1
Arrangements should be put in place
for regular, ongoing review of the
Project Risk Register.
Priority
Agreed Action
2
A further review of the register should
be undertaken in the near future, to
take account of recent project
developments and any impact
resulting from the recent ‘credit
crunch’.
Responsible
officer
Target
Date
Agreed – the risk
register will be
revisited to
ensure that all
relevant risks are
identified.
Head of
Strategic
Asset &
Estates
Management
31/03/09
R2
The Head of Strategic Asset &
Estates Management should ensure
that all staff assigned to key project
roles attend appropriate training in
the Blackpool Method.
2
Agreed – this has
now been
implemented.
N/a
N/a
R3
Development of a project initiation
document and main project plan
should now be addressed as a
priority.
1
Agreed – this has
now been
implemented. A
project initiation
document is in
place which has
been approved
by CELG and the
members.
Underlying this is
a project plan.
N/a
N/a
R4
Each risk on the project risk register
should be cross-referenced to the
project work streams to ensure that
all of the identified mitigations are
being addressed, have clear
ownership and responsibility for
delivery assigned.
2
Agreed – the risk
registers are
being reviewed
and risk owners
are being
identified.
Head of
Strategic
Asset &
Estates
Management
31/03/09
Key to Priorities
Priority 1
A recommendation we view as essential to address a high risk
Priority 2
A recommendation we view as necessary to address a moderate risk.
Priority 3
A recommendation that, in our opinion, represents best practice or
addresses a low level of risk.
Blackpool Council: Internal Audit
Assuring Quality Services for Black pool
Recommendation
Priority
Agreed Action
Responsible
officer
Target
Date
R5
An Executive Director should be
appointed to take up the Project
Senior User role.
2
Agreed – a
governance
structure has
now been agreed
by CELG. It is
intended that
more than one
Executive
Director will fulfil
the Senior User
role; however
they still need to
be named.
Head of
Strategic
Asset &
Estates
Management
31/03/09
R6
The Assistant Director Built
Environment should take steps to
secure HR representation on the
Accommodation Strategy Group.
1
Agreed – this has
now been
implemented and
a Strategic HR
manager forms
part of the
Accommodation
Strategy Group.
N/a
N/a
R7
The Head of Strategic Asset &
Estates Management should
undertake a review of current project
organisation, with a view to
establishing a structure that provides
an appropriate framework for the
project to operate within, facilitates
management and decision making
and is in accordance with the
Blackpool Method.
1
Agreed – this has
now been
implemented and
is included in the
project initiation
document.
N/a
N/a
R8
In accordance with the Blackpool
Method, roles and responsibilities for
delivery of the programme and work
streams should be formally assigned,
communicated and documented in a
project initiation document.
1
Agreed – the
process for
undertaking this
is now in place.
However the
introduction of
new workstreams
will be ongoing.
Head of
Strategic
Asset &
Estates
Management
Ongoing
Key to Priorities
Priority 1
A recommendation we view as essential to address a high risk
Priority 2
A recommendation we view as necessary to address a moderate risk.
Priority 3
A recommendation that, in our opinion, represents best practice or
addresses a low level of risk.
Blackpool Council: Internal Audit
Assuring Quality Services for Black pool
Recommendation
Priority
Agreed Action
Responsible
officer
Target
Date
R9
The Head of Strategic Asset &
Estates Management should develop
a formal Project Communication
Plan, in line with Blackpool Method
guidance, to help in the development
and management of effective
communication channels with all
stakeholders, including partner
organisations.
2
Agreed – a
Communication
Strategy is now
in place. The
process of
communicating
to stakeholders
and when this
will take place is
ongoing.
Head of
Strategic
Asset &
Estates
Management
Ongoing
R10
The Head of Strategic Asset &
Estates Management should arrange
for feedback to be obtained from
mobile, flexible and home working
teams, to identify any problems,
issues and concerns so that these
can be addressed by the appropriate
support services.
2
Agreed –
feedback will be
obtained when
suitable flexible
working
arrangements
are in place and
staff have had
the time to use
them.
Head of
Strategic
Asset &
Estates
Management
30/09/09
R11
The Head of Strategic Asset &
Estates Management should
consider appointing an appropriate
officer to lead on delivery of the
necessary changes to culture and
working practices and co-ordinate the
work being undertaken to facilitate
new ways of working.
2
Agreed – the
process for this is
now in place and
change
managers and
champions will
be used to fulfill
this role. The
cultural change
will however be
an ongoing
process.
Head of
Strategic
Asset &
Estates
Management
Ongoing
R12
The Head of Strategic Asset &
Estates Management should
consider developing a contingency
plan of alternative strategies in the
event of the contractor defaulting.
2
Agreed – this will
be addressed
through the risk
management
process.
Head of
Strategic
Asset &
Estates
Management
30/10/09
Key to Priorities
Priority 1
A recommendation we view as essential to address a high risk
Priority 2
A recommendation we view as necessary to address a moderate risk.
Priority 3
A recommendation that, in our opinion, represents best practice or
addresses a low level of risk.
Blackpool Council: Internal Audit
Assuring Quality Services for Black pool
Recommendation
Priority
Agreed Action
Responsible
officer
Target
Date
R13
The Head of Strategic Asset &
Estates Management should
consider developing a Project Exit
Strategy in case the worst case
scenario should occur and the whole
project had to be abandoned.
2
Agreed – this will
be addressed
through the risk
management
process.
Head of
Strategic
Asset &
Estates
Management
30/10/09
R14
Services should be encouraged to
develop local risk registers as a
starting point to identifying and
addressing the key issues relating to
recruitment and retention risks.
2
Agreed – these
will be developed
as services
become involved
in the
programme.
Head of
Strategic
Asset &
Estates
Management
31/03/12
R15
The Assistant Director Built
Environment should address
development of succession plans to
mitigate the risk of losing key project
staff.
2
Agreed.
Assistant
Director Built
Environment
30/09/09
R16
The Head of Strategic Asset &
Estates Management should liaise
with the Head of ICT, to agree an ICT
policy and strategy that addresses
the working practice requirements of
the Accommodation Strategy and
business needs of the departments.
2
Agreed – a
workstream is
now in place to
deal with ICT
issues and
funding has been
included in the
financial model.
This links to the
implementation
of
recommendation
11.
Head of
Strategic
Asset &
Estates
Management
Ongoing
Key to Priorities
Priority 1
A recommendation we view as essential to address a high risk
Priority 2
A recommendation we view as necessary to address a moderate risk.
Priority 3
A recommendation that, in our opinion, represents best practice or
addresses a low level of risk.