Asset driven transformation
The public sector is facing substantial pressures on financial settlements. The UK budget announced a further £11billion of savings from central government and local government is expected to deliver additional cuts of 3% from 2011 onwards as well as seeing income plummet from other sources with costs increasing.
Technology and process-led transformation initiatives which started in the late 1990’s are exhausted and it's debatable whether programmes actually delivered significant efficiencies and cost savings - or indeed performance improvements.
HR initiatives around cultural change to align staff behaviours to organisational values are often regarded as too nebulous to deliver tangible results and many never reach a conclusion.
For most organisations, 20 - 30% of annual costs are property-related, and yet these have still not received the appropriate attention to optimise efficiency and effectiveness.
Reducing the size of public sector estates (even through judicious sharing) leads to reduced maintenance and staffing costs. There are also opportunities to sell underutilised assets to realise capital receipts and stimulate regeneration initiatives.
Organisations understand that in order to deliver a substantive change in performance, an organisational-wide change programme is required with real teeth in programme management and milestones to deliver tangible results.
There is therefore a need for asset driven transformation.
Key Issues Being Faced
The key issues facing local government currently include:-
- Imperative to reduce operating spend
- Drive to improve (or at least maintain) quality of services to citizens
- Need to create an efficient, well located, customer focused, operating environment
- Service delivery models should be measurable and accountable to customer needs
- Asset provision should be aligned to customer and service delivery needs
Why Asset Driven?
There are a number of factors as to why an asset driven model for organisational transformation is more likely to succeed as a programme of change for the issues outlined above.
- The programme for asset change puts in place ‘solid’ milestones for other change initiatives to meet (e.g. building opening day, lease breaks etc)
- Asset change is a catalyst for internal and external debate and organisational evolution
- Assets are a unique, tangible expression of an organisation’s service delivery approach, culture, vision and values
- Changing the physical environment provides a tool to change behaviours and to connect people to those values
We have saved Communities and Local Government £8 million per year through new ways of working. This equates to a reduction of 20% of annual property revenue costs. At the same time we have helped to connect staff to the organisation’s values.
We have recently identified over £1 million per year savings for a County Council and over £400,000 for a Borough Council from implementing new ways of working.
We identified £2 million savings for a City Council and £2.5 million annual savings for a London borough through working more efficiently and effectively.
We have supported a Scottish local authority to use an asset-driven approach to inform its flexible working and customer management transformation initiatives; this has reduced internal accommodation requirements by 18%, rationalised front office delivery points by 60% and contributed more than £3 million in asset-related FTE costs.
Asset Driven Transformation is enabling a Unitary Council to reduce its HQ office space by over 20%, to realise over £2.5 million in capital receipts and to implement radical improvements in customer service while saving over £1 million in revenue expenditure.