To consider a report on the Future Operating Model for the work of the County Council and any consequent changes to the Directorate structure which may be required (yellow pages).
Minutes:
The Council had before it a comprehensive report on a proposed future operating model.
The report set out that the Council had faced significant challenges over the last three years, primarily brought about by changed financial circumstances with £100m of savings to be found by 2017/18, and increasing demographic pressures year on year. The number of older people in the county who were eligible to access Council social care was rising, and the number of children Looked After by the Council had increased substantially over recent years.
In response to these changes the Council had successfully launched the BOLD Programme in 2010 which focused on reform, efficiencies and reducing spending. During this period the way the Council operated had evolved incrementally rather than being designed. The report listed a comprehensive set of proposed changes to the way the Council should operate to ensure it was fit for the future. The report set out that should the proposed changes be approved, then once implemented they would fundamentally change the operation of the Council, enabling it to be more responsive, agile, innovative, and above all commission services for residents that met need and delivered high quality and good value.
The Council was reminded that a refreshed Corporate Plan was published in January 2013, with an opportunity to focus the Council's efforts and finances on four key areas of focus, with 'Open for Business' being a key priority. The Council was also reminded that as indicated in the Leader's report to Council in January 2014, it was unlikely that the current way of operating will be fit for the future. The challenge would be to maintain outcomes for the county's residents whilst recognising the financial constraints and also that the size of the workforce was reducing. Commissioning was to be the driver for delivering these priorities, with real emphasis on both current and future needs, within the reduced financial envelope.
The report emphasised that the changed role of the Council in becoming a strategic commissioner was becoming evident. The focus of each of the commissioning programmes would be to make savings, but at the same time maintain outcomes for residents and service users by harnessing external expertise and innovation.
· The commissioning of Learning and Achievement services was agreed by Cabinet in April 2014 with a view to a new provider being found and in place by April 2015; the provider would be expected to drive through transformational change to deliver innovative solutions in a range of services supporting schools and pupils and continue to work with schools to improve educational outcomes within existing financial constraints.
· There had been discussions with potential alternative providers for Adult Social Care services currently provided internally, and this would inform options for the future delivery of these services; this fitted into the context of the Future Lives programme where the Council would be giving service users eligible for Council funded care greater choice over the services they use and control over their own personal budgets.
· Commissioning of five different components of support services was underway. Each component would be at different stages of the commissioning process over the next 12-18 months with the Property Design Unit and IT infrastructure currently seeking alternative provision.
· The Cabinet in March 2014 gave approval to proceed with a detailed business case across partners for a Joint Property Vehicle. The outcome would be the formation of a single new company to manage the partners' property portfolio with the potential to drive service integration and property rationalisation, ultimately creating opportunities for further regeneration and growth.
· An emerging new phase of work in commissioning Council Transport Services should be completed by March 2015. The anticipated outcome would see the further market development of community transport providers and the transfer of the in-house fleet service to an arms-length operation, thereby exploiting further commercial opportunities.
The report described that following an extensive series of engagement events including visits, conversations and focus groups with staff, members and partners during late 2013, initial proposals were brought to the Cabinet in February and April 2014. The Cabinet agreed to recommend the Future Operating Model for approval by Council, and authorised the Leader to make any final amendments to the Model following completion of consultation prior to this Council meeting.
The report defined 'Operating model' as including the following components:
· Customer base and needs
· Outcomes
· People and skills
· Processes and systems
· Structures
· Decision-making and accountability.
Since the Cabinet meeting in February the following events had taken place.
· Seven staff roadshows
· Directorate Leadership Team Meetings
· Member briefing
· Partner briefing
· Two Overview and Scrutiny Performance Board briefings
· Four focus groups with commissioning staff
· Nearly 20 individual interviews with senior officers
· Focus group with managers
· Briefing for 150 senior managers.
In the main, the response had been very positive and all sessions had provided constructive feedback which had been used to support the further development of the Future Operating Model. There were a number of key emerging findings from the consultation and engagement sessions which would assist the implementation of the Future Operating Model, and these were summarised in the Appendix to the report.
The proposals were outlined to Cabinet at the February and April meetings. For each of these proposals an indication of what success would look like and what this meant was outlined in the report.
(a) Strategic Commissioner
What success will look like; the Council would ensure that residents and businesses get the right services at the right price for the taxpayer. The Council would have 3 strategic commissioning Directorates – DASH, BEC and Children's Services that will only provide services directly where there is not a viable alternative. A small core of services would be retained in-house for the immediate future covering social care assessment and safeguarding services in the Adult Services and Health and Children's Services Directorates, and asset and infrastructure management, regulation and economic strategy in the Business, Environment and Community Directorate (BEC).
What this will mean; the role of strategic commissioner would need to evolve by 2015/16 but it was anticipated that the strategic commissioner role would be a management responsibility of the lead Directorate. Strategic commissioners would remain accountable for all outcomes delivered by commissioning including service outcomes, budget and value for money, regardless of provider, and the county needed to ensure it had sufficient quality assurance in place to do this effectively. These roles would lead the development of robust analysis of service user needs, management of external markets and ensure all individuals and organisations affected were included in the process, including service users, staff, members and partners. Ensuring clear separation between the strategic commissioner role, operational commissioners and the operational management of internally provided services will be important, though both will contribute to quality outcomes and cost management.
(b) Business Intelligence
What success will look like; The Council will know more about the current and future needs of residents and businesses and will use this information more proactively to plan service design and delivery.
What this will mean; as part of a commissioning review begun in 2013, the Research and Intelligence Unit was restructured in January 2014. Research and Performance Management consequently operated as two distinct strands. The research specialism was forward-looking, focussing on informing the commissioning and service redesign decisions through the use of techniques such as forecasting, benchmarking and scenario planning. The Research Teams will be further aligned in May 2014 to better align with the needs of Directorates.
The Performance Management element would focus on monitoring in-year performance, analysis of trends and setting of targets, all of which would be used together to support the commissioning function (whether this be ensuring acceptable performance of a service provided by the Council or a service provided externally), and inform the Quality Assurance process.
Performance management (through the currently used Balanced Scorecard, for example) would continue to be a vital means of understanding progress against "Future Fit". The Balanced Scorecard reports progress against the Corporate Plan using measures which relate to outcomes for residents in which the Council has an important role, either in influencing, commissioning or directly providing. In addition, it demonstrates the 'golden thread' in priorities and their performance throughout the organisation. A cross-organisation review of Performance Management will be complete by June 2014 and this would be used to inform and develop key components of the Future Operating Model.
The future role of research would also be different, with strategic commissioners requiring the function to enable better evidence-based decision-making and more forward-looking information and scenario planning rather than merely collecting the data in its current or retrospective form. For example, Strategic Commissioners for adult social care services might need tailored demographic information to let them know where their service users were, what their needs were currently, what their needs might look like in the future and what delivery model(s) may suit them best. They would also require a comprehensive picture of the market place, if the Council no longer delivers services then it can only influence the open market by understanding capacity versus cost, the specialisms offered, and try to predict the future of services when jointly commissioned with partners. Another example would be the use of digital information in providing services where research officers will use customer insight tools to make recommendations on how the service could be designed to ensure maximum take-up from users.
(c) Quality Assurance
What success will look like; the Council would make sure that services are safe, effective and customer friendly and have in place appropriate mechanisms to ensure this, regardless of provider.
What this will mean; the Council would look to enhance existing arrangements for managing supplier delivery proactively, ensuring service user feedback is a key component in any quality assurance process. This will require changes across the Council but particularly in managing suppliers that provide services directly to people. The changes will need to cover appropriate governance, management information and qualitative checks on quality, including a bigger role for members in overseeing quality. The report highlighted that Scrutiny had suggested that they play a more active role in challenging quality assurance, which was welcomed and supported by the executive. All members had a copy of the OSPB's Task Group's comments.
(d) Act Local
What success will look like; the Council will support people to come together to do things for themselves and their local community using their time, ideas and skills to make where they live a better place.
What this will mean; the Act Local initiative has had considerable success in developing an awareness and toolkit for local innovation and service delivery. Examples include communities taking up provision of outdoor education centres, libraries, youth services and winter gritting. However, there was a desire across the county to seek out further opportunities to deliver services at a more local level at lower cost, and in response to the needs of local areas. This recognised the shift to individuals and communities being empowered to do more for themselves on issues that are important to them. Recognising that one size wouldn't fit all, the Council would continue to work more closely with District Councils, Parish Councils and communities to identify and maximise opportunities for innovative solutions to changing local needs.
(e) Partner Feedback
What success will look like; the Council would gather regular feedback from partners, such as the District Councils, schools and the NHS, about how the performance of the Council - in the same way that the Council already collects feedback from residents, businesses and staff.
What this will mean; from 2014 the Council will incorporate a formal mechanism in its annual feedback surveys for feedback from all partners. This feedback information will be vital in terms of informing, challenging and improving future service design and delivery. A presentation on the future Operating Model was made to the Worcestershire Partnership Executive Group (PEG) on 9 April, which involved a discussion about existing 'feedback' arrangements with other councils, and how this Council might adopt these in order to improve and expand existing feedback processes. Proposals and ideas would be explored further at the June meeting of PEG and this would be used to inform the development of future mechanisms for obtaining this feedback.
(f) Expectations of members' role
How we will measure success; to enable all members to fulfil their role as local community leaders who are active in their communities and acknowledged as the 'go-to' person, to pull together support for local solutions to local problems. Members of the Cabinet will also provide community leadership at a countywide level, as well as having a role on the national stage. Through their democratic leadership, members will work with residents and partners to develop community resilience, access to services, community spirit and democratic participation.
What this will mean; the Council supports members through a combination of induction, briefings and formal training. New support structures will be designed to ensure members know where to go and who to approach to get up-to-date information that facilitates the delivery of local solutions and provides timely answers to local problems. The Council will build on the work of Scrutiny around member input into the Commissioning Process to look at how best to provide improved mechanisms to facilitate member input, recognising that the Council would be operating with reduced resources. The Council will ensure emerging and cross-organisational themes were being captured and communicated early enough, and information bulletins will be provided on a more regular basis. This will help to develop members' roles in relation to specific services, political groups, local partnerships and Council scrutiny and decision-making.
(g) Expectations of Staff
What success will look like; Staff will know what their objectives are, how they contribute to the Corporate Plan and how this differs from previously, including the development of different skills and behaviours. Staff will be flexible in their working practices including working across the organisation where appropriate, for example on major projects or cross-cutting issues.
What does this mean; flexible and mobile working will continue to be implemented and overall scores for performance will be introduced in Staff Review and Development (SRD) assessments from 2014. Staff accountability will be strengthened through delivering better decision-making, with innovation, agility and calculated risk-taking encouraged where a better outcome for residents can be achieved. A number of initiatives are being progressed including a review of the Council's 'Our People' strategy to identify desired staff behaviours in line with the Corporate Values and any Future Operating Model, as well as the introduction of development programmes to build staff capability and skill.
(h) Expectations of Managers
What success will look like; above and beyond their technical expertise, all managers will have been trained and will be working in a commercial way to achieve key objectives, manage resources, increase staff performance and work across service and organisational boundaries, all of which will be assessed through individual appraisals.
What this will mean; general management competencies as well as existing professional and technical competencies had been introduced for all managers in SRDs from 2014 and will be used as the basis of all recruitment. Managers' performance will no longer be measured on the basis of how many staff they line manage but instead on their contribution to the commissioning outcomes. Building on 'Managing Beyond the Basics', a blended training approach will be taken to developing skills that are variable across the organisation, including needs analysis, commercial and supplier management and any others.
(i) Implementing a Digital Council
What success will look like; the Council will use information and technology to free up staff to help customers to help themselves. This will see a transformation in self-service over this period.
What this will mean; the Council expect all services to be available on-line by 2016/17. This does not exclude face-to-face, or telephone contact where it is needed, but ensures the Council is fully flexible for all residents in a technology-rich world. The Council will work proactively to address digital exclusion, for example in areas of deprivation and population groups such as elderly residents. Through matrix working, detailed plans have already been created across all of the 8 focus areas of the Digital Strategy
· How the Council communicates with citizens and businesses
· How the Council manage information to provide service users with the information needed to make the operational and strategic decisions
· How the Council provide applications to service users
· How the Council support services users
· How the Council improve the supporting infrastructure to enable flexible and mobile working
· How the Council improve connectivity to enable secure and effective council working
· How the Council are improving business engagement
· How the Council are improving IT (security, commissioning, etc).
These have been aligned specifically with Directorate strategies in a collaborative way, demonstrating the change in behaviours the Council will expect from Managers and Staff. Common systems and processes will improve access to real-time information and support operational and strategic decision-making processes. The commissioning of IT will provide access to a wider set of technological capabilities ensuring service delivery and accessibility continues to be aligned to service user needs.
(j) Support Services
What success will look like; HR, IT and Finance will be covered by a small professional team that will help service areas commission or deliver services. Routine volume transactions will be streamlined and automated, and where possible will be done outside the organisation at reduced cost.
What this will mean; the nature of each support service will be changing, which will therefore necessitate changes in their individual operating models. Commissioning of support services was well underway and revised operating models for core support services (Finance, HR and Legal & Democratic) had been developed. A consequence of the different operating model for these services will mean strengthening the Council's capacity to be an intelligent client in managing suppliers, to ensure the Council retain best value and quality outcomes for Council service users. This will affect the role of the Council's current Resources Directorate.
(k) Commissioning Support
What success will look like; the Council will make sure staff who are commissioning and buying services on behalf of the Council get the right expert and specialist support from colleagues with expertise in commercial management, finance and legal services.
What this will mean; the report set out that this was likely to require an element of structural change to reflect the changed expectations of support services as indicated in section (j) of the report. Strengthening of the Council's commercial capabilities will be critical and the Council need to ensure that this is focused not just at the point of contract tendering, but throughout the commissioning cycle. The Council will ensure the roles of finance, legal, democratic, programme management, business intelligence, organisational development and technology innovation are appropriately aligned to the different stages of commissioning and these functions will need to work closely alongside the Council's performance management function to ensure the performance of all services is clearly understood by all, including members and residents as well as staff.
A focus on how commissioning delivered social value would be important. Social value helps the Council to consider the collective benefit to the community and wider social, economic and environmental outcomes (e.g. stronger communities, improved health and improved environment) that can be procured over and above the direct purchasing of services, goods and outcomes. How the Council's commissioning supports the Corporate Plan objectives will be important, for example impacts on our local economy will be critical in delivering the Corporate Plan priority 'Open for Business'. Developing skills and capabilities to effectively build social value into the Council's contracting and measure its effectiveness will be important although it is likely that different elements of social value will be appropriate depending on the service.
(l) Matrix Working
What success will look like; staff will work cross-Council in teams to contribute to corporate priorities and share best practice.
What this will mean; as the Council's financial
resources get tighter and more complex challenges are addressed,
the Council will have to work across traditional Directorate
structures more effectively. The Council already had some
experience of doing this successfully, for example the
cross-Council teams that have supported the recent conclusion of
waste negotiations, the development of stronger families work and
broadband, but the Council will need to use this approach more in
the future. Further opportunities for matrix working are being
identified, for example opportunities across Adults' and Children's
services and a further look at service integration in
customer-facing buildings.
(m) Transfer of staff as a result of
commissioning
The Council will move to being a
Strategic Commissioner under this Future Operating Model, and it
was recognised this would inevitably lead to a reduction in
Council-employed staff. Commissioning will be enabled through
the development of different service delivery models suitable for
the particular service in question - including the procurement of
private sector organisations; establishment of arm's length bodies;
separate commercial legal entities and joint venture
organisations.
In delivering the Future Operating Model it will be the role of Cabinet (as the Executive) to make the final decision on the appropriate service delivery model for any particular service, and the Council to accept there will be a consequential impact reducing the numbers of directly Council-employed staff as a result of particular Cabinet decisions. The report suggested that many staff who currently delivered services which were subsequently commissioned-out by Cabinet were likely to be transferred to third-party providers through TUPE transfer.
Next Steps
The report set out that the three frontline Directorates would broadly stay the same, based on their track record of delivering good services and substantial savings for the residents of the county and the need for them to focus on the challenges ahead. However, there would need to be some structural changes to better implement the Future Operating Model. Their Directorate structure would remain, but a number of directorate functions would change and the role requirements of a number of managers will change. This would mean that a number of existing posts would be deleted and new ones would need to be created. In addition, the structure of the current Resources Directorate and Chief Executive's Unit would need more fundamental structural change.
The report concluded by referring to a separate report detailing the structural changes needed to implement the key components of the Future Operating Model if it was adopted.
The recommendations in paragraphs 1(a) to (c) of the report were moved and seconded.
An amendment was moved by Mr R M Udall and seconded by Mr C B Taylor to add a paragraph (d) in the following terms:
"(d) Council accepts the report from the OSPB and the recommendations within it. Council authorises Group Leaders and the Chair and Vice-Chair of the OSPB to undertake discussions to consider proposals for Quality Assurance and Commissioning Monitoring Panels and any changes to other Scrutiny Panels and the Members' Advisory Group as suggested within the OSPB recommendation.
Council requests further report with recommendations be made to a future meeting".
With the agreement of the mover and seconder of the original motion this additional paragraph was adopted as part of the substantive motion.
A discussion then ensued during which the following principal points were made:
· a number of members spoke about the pace of change being so swift and causing potential difficulties as a result. Other members spoke in favour of increasing the pace of change to buffer the Council against the continuing financial stringencies and creating a durable and robust operating model
· some members also spoke about the loss of the public sector ethos and the values that embodied. Other members reiterated that the Council had to ensure service users/Council Tax payers received the best service at the best price and that the Council was now operating in a very different environment
· some concern was expressed about how Council workers would lose benefits accrued during their service with the Council. Other members reminded Council that transferred staff were protected by TUPE regulations and the changes were required to control spending and providing services at the best price for taxpayers. The changes were about value for money and the needs of residents and not about political dogma.
· In summing up, the Leader expressed satisfaction that Scrutiny was contributing to the process and the OSPB recommendations would be further discussed with a view to a report being made to the Council in Autumn.
RESOLVED that:
(a) the outcomes of consultation with staff, members and partners on proposals to change the future way of operating within the Council as set out in the report be noted;
(b) the consequential impact on the status of directly-employed staff in services which are commissioned and to be provided externally be noted and accepted;
(c) the Council's Future Operating Model as set out in the report be approved;
(d) the report from the OSPB and the recommendations within it be accepted. Group Leaders and the Chairman and Vice-Chairman of the OSPB be authorised to undertake discussions to consider proposals for Quality Assurance and Commissioning Monitoring Panels and any changes to other Scrutiny Panels and the Members' Advisory Group as suggested within the OSPB recommendation. The Council also requested that a further report with recommendations be made to a future meeting.