Jan 13 2014

Harrow Council’s Project Minerva – More Job Losses on the Way?

harrow_council_logoSpotted here tonight was a document which seems to suggest that more job losses could be on the way at the Council. We’ve highlighted the interesting bits…

Project Minerva was set up to investigate ways in which the Council could look to reduce service costs by up to 30% for the four financial years commencing from April 2015. It has followed a systematic examination of alternative service delivery options including redesigning services, sharing resources with other authorities and outsourcing all or part of the services in scope. A key reason for the project is to bridge the “funding gap” that could otherwise exist in 2015/16 as a consequence of reductions in revenue support grant allocated in accordance with the comprehensive spending review, although the specifics of these reductions have not yet been communicated to Councils.

The Council currently has a balanced budget for 2013/14 and 2014/15 which includes the delivery of savings of £22.8m over those two years. However, it is anticipated that the national ‘austerity’ measures already in place to address the national budget deficit are likely to continue up to 2020 and possibly beyond. The Council therefore needs to plan for further potential cost reduction challenges in addition to the £75m of savings it has already identified for achievement between 2010 and 2015.

Within the current economic and financial climate, the future service delivery model will need to change if further significant cost reductions are to be achieved. The protection of “front line” services is considered to be a pre-requisite to ensuring that the Council can continue to deliver services that meet customer requirements and support and protect people that are most in need. Consequently, planning for the future delivery of services needs to be undertaken now in order for cost reductions to be delivered by 2015/16. To facilitate the evaluation of cost reduction options, primary research has been undertaken into the potential for a shared service arrangement with another Local Authority, outsourcing services to a private contractor, implementing internal changes delivered through the services concerned, replacing the SAP system and relocating “back-office” services to cheaper alternative locations. Additionally, the initial period of the existing Incremental Partnership Agreement with Capita expires on 3rd November 2015 but may be extended by up to five years by giving at least 12 months written notice. The variation to the above agreement for the provision of IT Services expires on 24th November 2020 and contains a break clause provision that can be exercised subject to giving prior at least 12 months prior written notice. As such, it has been considered prudent to also review and consider the current outsourced IT Service arrangements within the context of the above and the likelihood for changes in future demand for the provision of IT Services and backoffice transactional support services. It is also anticipated that other activities, particularly relating to channel shift, will increase volumes of online activity, data storage requirements and requirements for 24/7 system availability in the future. The IT Service also represents the largest cost base and there have been significant changes in the market over the past three years in particular. Following evaluation of the various cost reduction options outlined above, recommendations have been submitted for consideration by Cabinet. These include proceeding with a cost reduction programme through the implementation of the internal option that has identified a potential savings target of £2.0m per annum across the following services in scope; Finance and Assurance, Human Resources and Shared Services and Collections and Benefits. The annual cost base of these services is approximately £11.6m and the savings target represents 17%.

If approved, the recommendations contained within the Cabinet report will enable the Council to embark on a two-year cost reduction programme aimed at achieving an annual savings target of £2.0m from 2015/16. However, where appropriate, some service options may be delivered earlier than the target date. The recommendations also facilitate the re-tender of the existing IT Service contract to better support and facilitate achievement of the Council’s corporate priorities and secure greater value. As there are 254 posts in scope within the Resources Directorate and the internal options identify potential savings of £2.0m per annum, there is a potential for approximately 40 to 50 posts to be deleted through the cost reduction programme.

So, there you have it: 17% job cuts across the Resources Directorate.

Source: Minerva Appendix 1

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