This report provides an overview of progress made to date and priorities for the continuing Zero-Based Budgeting programme.
Martin Calleja (Assistant Director of Efficiency and Zero-Based Budgeting) presented the report that gave an overview of the Zero-Based Budgeting Programme, established in April 2019. The business case for the programme was based on the projected scale of further savings required over the next four-year medium term (£50m between 2020-24) and the need to improve the capability and capacity of the Council to achieve this.
Martin Calleja explained that achieving savings was not just a technical exercise but it was also about getting people to sign up and engage with change. A core principle of the programme was to work with teams collaboratively, not an imposed top-down review process. £5.19m of detailed viable plans have signed off by SLT - over the coming 3 years. This represented a £10 return for every £1 spent on the programme.
Half of the Council’s services have used the zero-based budgeting process so far and the team will continue to promote and encourage services to use it going forward. Officers were also working with heads of finance and using them to promote the programme to their management teams. The programme was still not fully established but has made significant headway and on balance people feel positive about it.
The Chair asked about the timeline for the £8.6m of pipeline savings. Martin Calleja said the pipeline represented modelled opportunity that required more detailed planning work and approvals from senior decision makers. For example – one of the proposals was to reduce management costs but the organisation had not set out how to do that yet. The programme would be developing a corporate strategy, priorities, and pipeline. Then there would be a managed closure of the programme by the end of the financial year next year. At that point all services will have been reviewed and work will move to delivery of the ‘big ticket’ savings.
The Chair, noting the £10 return to £1 spent on the programme, asked if there was a limit to these marginal benefits – should the Council be spending more to realise even greater savings? Martin Calleja said the Council had scaled the programme around balancing the budget. He felt it was the right approach to have a small, focused team that worked with departments. Previous approaches used larger central teams of consultants and agency workers that became disconnected from services.
The Chair asked if the managed closure at the end of two years risked losing experience. Martin Calleja said the programme needed to ensure the Council had the capability to carry on with its work. It was felt that the best home for reviews going forward is in the Business Intelligence team.
The Chair, referring to 3.8 of the report, asked if the Council had considered selling this service to other councils. Officers noted that councils don't trade well as sector but there were potential opportunities for trading certain functions.
Councillor Zarar Qayyum asked what period the 10:1 return on investment was calculated over. Martin Calleja said it was modelled over the medium term (4 years) but was likely to be delivered in one or two years.
Councillor Qayyum asked what the biggest challenges were for the programme. Martin Calleja felt the cultural challenge was the most significant. The Council had already delivered a lot of savings but it could still be threatening for departments. There had been some challenging discussions with senior managers, and some services were nervous to commit to savings figures, but everyone recognised the scale and seriousness of the financial challenge.
Councillor Qayyum asked if the Council was looking at revenue generation as well as savings. Martin Calleja said new commercial opportunities were being considered – the team was working with finance on all income and debt lines to look at the holistic picture.
Councillor Christabel Cooper wanted to ensure there wasn’t under-investment in the Business Intelligence team, given the need for more and more analytics going forward. She noted that their work to support other areas of the Council was properly attributed – for example, the single person discount fraud income would show on another department’s balance sheet. Lisa Redfern agreed and said that getting the right model and corporate buy-in for the Business Intelligence team was crucial and officers were focussed on that now.
The Chair asked for more information about the zero-based budgeting contract review panel. Martin Calleja said the team wanted to test how lead officers were managing contract costs. They looked at seven contracts, including CCTV, printing, and grounds maintenance. Each service was challenged to find opportunities to cut costs. The team found that services had a really good grip on the contracts and good ideas to reduce their costs - but there was limited drive to implement in the short term. Plans tended to revolve around major recommissions. Some services felt they needed sponsorship or some invest to save money. There were reports available on each of the seven contracts.