13 September 2011

Mike Freer appears in an episode of The Billion Pound Drop.

Mr Mustard has now found an article that appeared here in publicservice.co.uk about the savings that Mr Freer believes can be made in central government. Mr Mustard hazards that these are the kind of potential savings he will highlight to Francis Maude MP.

You can play TV show game The Million Pound Drop here

So here is the article with added comments by Mr Mustard in red.

The cost of government
15 April 2011

Questions from MP Mike Freer recently uncovered more than 10,000 mobiles in just one government department. Having achieved efficiencies when he was Barnet Council leader, he looks at how central government could learn from the 'easyCouncil' approach. The department was the Ministry of Justice. It has 81,000 staff. So one in eight has a work issued mobile.

Mike Freer was elected as MP for Finchley and Golders Green in the May 2010 general election. Previously he was leader of Barnet Council and previous to that was the lead member for driving efficiency.

Barnet Council took nearly £90m out of the annual £600m+ revenue spend during the period May 2002 to December 2009. It reduced the back office costs to the second lowest in London, reduced it's workforce and moved services from two star to three and four star. How very odd. In this article they were only claimed to be the fourth lowest in London. Statistics eh? slippery devils. Mr Mustard refers readers to the Q2 2010/11 performance report on the Deputy Chief Executive, available here, which says in respect of indicator 17b that no benchmarking data is available as the calculation is unique to Barnet and that "We recognise that the council's true back office costs, when taking into account back office functions embedded in frontline services, are much higher than this ( £59.41 )" and yet someone gave Mr Freer comparative figures previously?  How odd.
Many of the savings were driven by monthly meetings of each spending department to drill down into over/under spends. Both the chief executive and I would lead the review and each service director and lead councillor would be expected to attend and know their departmental budgets – line by line. Spend lines forecasting an end of year under spend were returned to central contingency; any unreported under spends (slush fund) discovered were 'confiscated' and returned to central reserves. The monthly meetings maintained the pressure and the fact that they were driven by both 'the council leader' and the chief executive established an culture of driving out costs; that budgets were not a 'target for spending' but to be under achieved. I fear that in government, spending departments regard their agreed budgets as a spending target. Mr Mustard does not know if this still happens but suspects that it does not. He has seen this system in use in the private sector and it worked very well indeed. It should be reintroduced at Barnet Council.

The year on year 'salami slicing' that identified the £90m also drove us to understand some three years ago that central government support would inevitably be severely reduced. We embarked on the a major review of how to structure the council for an age of austerity; the programme – the future shape of the council was dubbed 'easyCouncil' because of its relentless drive for spending transparency and efficiency; a drive for merging back office functions within the borough's public sector (rather than sharing back offices across councils) and a co-ordinated drive to resolve the causes of dependency costing the council and public sector partners huge sums (300 families cost Barnet £16m a year, every year). Mr Mustard is all in favour of efficiency and not wasting money. The forerunner to One Banet, called Future Shape, was a much more modest programme and unfortunately it is now like a runaway horse. The rider really needs to stop it but can't.

Recently I have been looking at key lines of expenditure for central government to see if the learning from Barnet could be carried across. Early indications are that nearly £900m could be saved without impacting front line services: reducing office accommodation by adopting private sector space per employee allowances; introducing hot desking and flexible working - £832m; moving all departments to paying invoices electronically and driving down the cost of invoice processing to 'best of government' – £9.1m; releasing surplus office accommodation - £61.4m; reducing employee annual days lost to private sector average - £63m; and cutting the amount spent on magazines and periodicals - £6.3m. On top of this my next round of enquiries has identified that 10,000 mobile devices, costing £2.3m a year, are issued to just one government department – the Ministry of Justice.( Hot desking is an abomination. Where is the feeling of security for the employee, driving to work not knowing if there will be a space for them or not. Barnet Council seems to still have lots of offices, surely room still for some further consolidation. Mr Mustard will make some enquiries about the number of mobiles at Barnet Council and report back.

A simple review of usage identified how many mobile handsets had been issued; looking at spend anomalies – highlighting unusually high usage (inappropriate numbers e.g. sports results lines) or high data downloads (inappropriate web access). Also identifying unusually low usage; those whose bill was just the minimum monthly charge identified those who were not using the phone (a surprising number were in desk drawers, unused or rarely turned on). Not only did this lead to the withdrawal of mobile that were clearly not needed because they were not being used but also drove management to refresh the list of blocked sites/numbers. Hopefully this will not be an issue in Barnet Council?

The exercise also gave a clearer insight into the volume and type of calls. The information allowed a complete renegotiation of the contract, shaving significant sums off the annual cost. Money that was redirected to front line services. There are contracts now that allow calls to other mobiles within an organisation and even desk phones to be made for an all inclusive price – irrespective of the volume. The challenge is for central government – is there one contract or does each department negotiate it's own. When was the last time the number of handsets issued and usage was seriously reviewed? Above all, which minister is responsible for in-year savings? EasyCouncil can deliver some easy wins. Barnet Council's notorious procurement section will have tackled this already, won't they?

Nothing radical or novel then in what Mike Freer has to say. It will be interesting to see what comes out after his meeting with Francis Maude or whether this story quietly  disappears.

Yours frugally

Mr Mustard

1 comment:

  1. oh please: an analysis of potential savings by a BT Vital Visionary turns out to be about negotiating phone contracts? How did that happen?


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