MIDDLESBROUGH COUNCIL
EXECUTIVE REPORT
Change Programme 2015-2018
Executive Member for the Change Programme: Councillor Mike Carr
Deputy Mayor / Executive Member for Resources: Councillor David
Budd
Executive Director of Commercial and Corporate Services: Tony
Parkinson
17 March 2015
PURPOSE OF THE REPORT
1. To seek endorsement of proposals for the Change Programme and its activities for the
period 2015-2018.
SUMMARY OF RECOMMENDATIONS
2. That Executive endorses the direction provided in the draft Change Programme 20152018 document.
IF THIS IS A KEY DECISION WHICH KEY DECISION TEST APPLIES?
It 3.
is over It is over the financial threshold (£150,000)
It has a significant impact on 2 or more wards
Non Key
x
x
DECISION IMPLEMENTATION DEADLINE
3. For the purposes of the scrutiny call in procedure this report is
Non-urgent
Urgent report
x
If urgent please give full reasons
BACKGROUND AND EXTERNAL CONSULTATION
4. On 23 April 2013, Executive approved the initiation of the Council’s Change
Programme to meet the challenges presented by unprecedented and ongoing financial
contraction within local government, while at the same time maximising the Council’s
contribution to the Mayor’s Vision for Middlesbrough.
5. After a period of stakeholder consultation, Executive approved Phase 1 of the
programme on 16 July 2013. Phase 1 was focused on development – providing a
direction of travel for the organisation and its services over the medium term.
6. With the approval of the Mayor’s Budget for 2014/15, Phase 1 was completed, and the
Council revised the programme to ensure that it was fit for purpose for Phase 2, which
focuses on implementing change via a rolling, three-year programme. The first threeyear plan (for 2014-2017) was designed to address the then three-year budget gap of
£67m, and was endorsed by Executive on 18 March 2014. The document was
subsequently approved by Council on 14 May 2014.
7. The Council’s medium-term financial position for the period 2015-2018 has now been
established, with savings of £56m are required for this period. It is therefore
appropriate to extend the Change Programme to 2018. The revised document is
attached at Appendix 1 for Executive consideration and endorsement.
8. The document will be discussed with the new Mayor and Executive following the May
2015 elections, revised as appropriate and then presented to Council for approval as
early as practicable in the new municipal year.
9. The draft 2015-2018 document restates the Council’s approach to change, provides an
update on progress in the first year of the programme, and outlines anticipated
resources (both revenue and capital) and targeted outcomes over the next three, years
for each of the Council’s nine outcome areas.
10. Significant progress has been made in the Change Programme’s first year of
implementation, as outlined below.
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
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



Change projects have delivered £15m of savings in 2014/15, which has been a key
contributory factor to the Council meeting its budget gap.
The preferred future delivery models for Sport and Leisure; Environment, Property
and Commercial Services, and the support services currently delivered on behalf of
the Council by Mouchel have been determined.
A senior management development programme for the Middlesbrough Manager
Competency Framework has been delivered and the Middlesbrough Employee
Framework has been launched. A new appraisal system has been implemented to
embed both frameworks into working practice.
A new Performance Management Framework has been introduced across the
Council based on the Balanced Scorecards concept, supporting a focus on
outcomes and a more rounded view of best value.
New Commercial Strategy and Estates Strategies for the Council have been
developed, to change the culture of the organisation in relation to commercial
practice, and ensure the Council drives maximum value from income-generating
services and its land and property portfolios.
A ‘Service Promise’ process has been introduced to promote a more customerfocused approach to support services going forward.
The capital appraisal process was revised to fully take into account return on
investment and in January 2015 Executive agreed a new capital programme,
investing a total of £175.5m in the town in the medium-term.
11. In extending the Change Programme to 2018, the Council has undertaken an exercise
to develop three-year Outcome Delivery Plans, supported by outline medium-term
revenue budgets, and a revised capital allocation resulting from the capital programme
review outlined above.
12. A summary of the nine Outcome Delivery Plans is included in the revised Change
Programme document at Appendix 1, including the key measures of success for each
outcome area over the next three years.
13. The approach previously deployed to identify budget reduction targets was based on
saving 50% of baseline expenditure from support services, 30% from discretionary
services and 15% from statutory services. These savings have been factored into the
Medium Term Financial Plan. To meet the current financial gap of £56m in its entirety
further savings were required. To enable this, an evidence-based unit cost
methodology for assigning further budget reduction targets was devised.
14. Within this exercise, 18 high-level and 140 detailed unit cost indicators across the
Council’s nine outcomes were constructed and performance compared with the
Council’s family group, with each indicator traffic-lighted to reflect distance from the
average cost across all benchmarked authorities. This process identified potential
savings well in excess of the Council’s net £15m medium-term budget gap and through
a process of refinement and discussion the allocation of the net gap to the nine
outcome areas (with an additional £3m factored in to mitigate potential underachievement in the wider programme) has been drafted, as follows:
Outcome area
1 Economic Development
3 Public Health
5 Safeguarding & Children’s Care
6 Social Care
7 Environment, Property & Commercial Services
2016/17 (£m)
0.720
0.720
2.100
1.800
0.090
2017/18 (£m)
1.680
1.680
4.900
4.200
0.210
15. The effect on this exercise on the Council’s departmental budgets is illustrated in the
charts below. In summary:



The budget for the Economic Development and Communities department
(Outcomes 1-3 above), will continue to reduce over the period, reflecting the fact
that the Council has historically spent significantly more on some services in this
area than its family group average, reflecting significant potential savings
opportunities.
The budget for the Wellbeing, Care and Learning department (Outcomes 4-6
above), will reduce in cash terms from 2016/17, but still grow as a proportion of the
Council’s net budget for the period from around 50% to 60%, thereby continuing the
principle of protecting frontline services and vulnerable groups as far as practicable.
The budget for the Commercial and Corporate Services department (Outcome 7-9
above), will continue to reduce over the period, albeit at a slower rate, reflecting the
significant savings (up to 50%) already achieved or planned in these areas in line
with the budget savings targets identified in Phase 1 of the Change Programme.
Pre-comparative unit cost exercise
Post-comparative unit cost exercise
16. Provisional revenue budgets for the next three years are outlined below.
Outline net revenue budgets 2015-2018
Outcome area
1 Economic Development
2 Supporting Communities
3 Public Health
4 Learning & Skills
5 Safeguarding & Children’s Care
6 Social Care
7 Environment, Property & Commercial Services
8 Finance & Investment
9 Organisation & Governance
Corporate
2015/16 (£m)
9.391
5.682
-0.543
-1.642
27.818
41.215
12.579
5.205
10.208
10.004
2016/17 (£m)
8.805
5.601
-2.645
-1.735
26.950
40.358
9.181
4.306
7.757
12.446
2017/18 (£m)
6.737
5.601
-4.474
-1.735
24.050
37.691
8.911
4.306
7.701
12.405
17. Provisional capital budgets for the next three years are outlined below.
Outline capital budgets 2015-2018
Outcome area
1 Economic Development
2 Supporting Communities
3 Public Health
4 Learning & Skills
5 Safeguarding & Children’s Care
6 Social Care
7 Environment, Property & Commercial Services
8 Finance & Investment
9 Organisation & Governance
2015/16 (£m)
41.762
0.042
0
5.206
0
2.508
9.174
0.460
4.952
2016/17 (£m)
19.826
0
0
1.263
0
0.938
4.316
0
2.247
2017/18 (£m)
TBC
TBC
TBC
TBC
TBC
TBC
TBC
TBC
TBC
IMPACT ASSESSMENT
18. In line with statutory requirements, the overall approach to the Change Programme has
been subject to a Level 1 (screening) Impact Assessment, which is at Appendix 2 of
this report.
19. No negative differential impact on diverse groups and communities is anticipated from
the direction of travel set by the Change Programme as currently scoped. Proposed
changes for 2015/16 and beyond have formed part of the Mayor’s Budget
Recommendations, approved by Council on 4 March 2015, and were either impactassessed as part of that process, or will be assessed in-year where appropriate.
Additional proposals for future years may come forward during the coming financial
year, and if so will be impact-assessed separately.
OPTION APPRAISAL/RISK ASSESSMENT
20. Past reports to Executive on the Change Programme (23 April and 16 July 2013) have
outlined risks associated with the implementation of the Change Programme and plans
to mitigate these risks. Plans set out in the draft Change Programme document will
further mitigate these risks.
21. The Council is currently undertaking a review of its approach to risk management, and
this will include a comprehensive review of its strategic risks. This will be reported to
Executive in due course.
FINANCIAL, LEGAL AND WARD IMPLICATIONS
22. Financial implications – The Council has no option but to address the anticipated
reduction in resources. The Change Programme provides the means to achieve this in
a strategic manner, while continuing to reshape the Council to lead on the delivery of
the vision for the town.
23. Proposed changes for 2015/16 and beyond formed part of the Mayor’s Budget,
approved by Council on 4 March 2015.
24. Both revenue and capital funding is available to support the Change Programme,
notably the Change Fund and the Capital Programme.
25. Ward Implications – The activity outlined in the Change Programme 2015-2018 will
affect all wards.
26. Legal Implications – The rolling, three-year Change Programme document
supersedes the former Strategic Plan and as such forms part of the Council’s core
policy framework, as set out in its constitution. The approach outlined within the
document will enable the Council to operate within the resources available and
continue to meet its many statutory duties.
RECOMMENDATIONS
27. That Executive endorses the direction provided in the draft Change Programme 20152018 document.
REASONS
28. To enable the Council to take a systematic, coherent and controlled approach to
addressing ongoing financial challenges, while maximising its contribution to the
Mayor’s Vision.
BACKGROUND PAPERS
Executive Report | 23 April 2013 | Change Programme and Senior Management Arrangements
Executive Report | 16 July 2013 | Progressing the Change Programme
Executive Report | 18 March 2014 | Change Programme 2014-2017
AUTHOR: Paul Stephens, Change Programme Manager
TEL NO:
01642 729223
EMAIL:
[email protected]
______________________________________________________
Address: Civic Centre, Middlesbrough, TS1 2QQ
Website: www.middlesbrough.gov.uk