Productivity Plan - July 2024

Productivity in Local Government 

Below is the requested productivity plan for Preston City Council (PCC), which was agreed by the Executive Leader on 15 July 2024.

1.0 - Introduction

1.1 - Councils aren't simple or single process-based organisations. They are a complex web of interlinked services that are proactive, reactive and responsive to changing environments.

Increased demand for services, reduced funding from government, inflationary pressures and the cost-of-living crisis to name a few. Productivity can't be considered in isolation. It is intrinsically linked to efficiency, performance, quality, investment, and plans for growth that influence both demand for council services and the revenue (from tax base growth) available to deliver those services.

1.2 - Preston City Council's approach to productivity is intrinsic within the 'Preston Model' a radical model of giving power back to communities.

• Community Wealth Building (CWB) - better outcomes for local people and communities through inclusive growth and shared prosperity.
• Sustainable public services - a modern council building capacity and effectiveness.

1.3 - The nationally recognised¹ 'Preston Model' of CWB is key to productivity.

Better outcomes are the cornerstone of sustainable public services, and are achieved when influence over power and prosperity is devolved to communities. Progressive procurement, prioritising social value, cooperative delivery models and the Real Living Wage have enabled PCC to deliver on CWB. For example, close working with developers has ensured the Animate project (city centre leisure facility) has maximised social impact through a Community Benefit Framework.

We continue to pursue economic democracy and some of the choices we have made around ownership as an authority e.g. delivering regeneration initiatives in directly including a leisure complex, Animate, Amounderness House a shared working space.

1.4 - Despite falling resources² (PCC is one of the hardest hit councils in Lancashire with general government grants down by over a half), increased demand for services and inflationary pressures³ the council has always set a balanced budget. 95-100% of the planned savings targets for each year have been achieved, and any shortfalls been made up through additional unplanned savings in other areas or revenue increases.

1.5 - The council's approach to savings is across five categories.

• Alternative and shared service delivery (CWB)
• Income generation
• Efficiencies
• Review of council assets, with assets a
• Where necessary a reduction in non-statutory services.

1.6 - Headline examples of savings from recent years include:

• £700k - from the change to operating model of leisure services
• £500k - from the restructuring of management
• £300k - from service efficiencies including technology in the customer service centre, shared services in revenues and benefits and restructures in various teams
• £250k - from rationalisation of council assets informed by a strategic property review
• £200k - from waste services changes identified through an efficiency review
• £125k - from insurance contract savings. 

1.7 - Savings of circa £1.5m were achieved from pension fund triennial reviews, and housing development has increased council tax receipts by £2m⁴. Both have helped retain some capacity to focus on major projects funded by £20m Towns Fund (TF) and £20m Levelling Up Fund (LUF).

The capital programme is the largest it has been in over 30 years. Regeneration in the city is to key to delivering productivity, alongside a modernised council.

^[1] Centre for Local Economic Strategies (CLES); University of Central Lancashire (UCLAN); Cooperative Councils Innovation Network (CCIN); Policy and Evidence Centre (PEC); Local Government Chronicle (LGC).

^[2] General government grants reduced by over half between 2019/20 and 2023/24. Despite an increase in some specific time limited grants overall government funding to PCC reduced by 13% (across the same period).

^[3]Service running costs have increased by 15% (£7m) between 2019/20 and 2023/24.

^[4] Council Tax receipts have increased by £2m since 2019/20.

2.0 - Transformation and improvement

2.1 - PCC has been effective in balancing the budget despite decreasing funding and increasing demand for services, as well as inflationary pressures, through a systematic approach to efficiency reviews.

The next step is to deliver future savings with a radical approach to transformation. That is, to develop an inclusive economy that grows the tax base and reduces demand (see 3.0); while modernising the way the council works to reduce running costs (see 4.0, 5.0 and 6.0).

2.2 - Following a LGA corporate peer challenge in 2023, the budget setting for 2024/25 and the recent local elections the council is currently developing a 5-year change programme with an annual review at the start of each municipal year. The purpose of the programme will be to:

• Further embed the 'Preston Model' of community wealth building
• Support the regeneration and shared growth ambitions for Preston
• Underpin the financial sustainability of the council
• Improve the experience of council service users, clients, and partners
• Modernise the council's systems and upskill the workforce.

2.3 - The Change Programme will pay regard to, and be informed by, the Plan for Preston (currently in development with the Anchor Board); PCC Corporate Plan (and associated delivery plans); CWB principles (the 'Preston Model'); PCC medium term financial strategy (MTFS) and annual budget; Local Government Association (LGA) transformation capability framework; Best Value Statutory Guidance (May 2024); and the Oflog framework.

2.4 - All projects included in the Change Programme will be assessed under criteria such as need and priority; opportunity and risk; resource required - non-cash (e.g. staff, IT) / cash (invest to save, to grow, to improve); savings potential (cost avoidance, cashable, income generation); impact - council (e.g. efficiency) / community; CWB and shared growth.

The initial proposal for a project will be assessed using evidence-based decision-making principles (under pinned with data). Change projects will be reported regularly in public to the Executive Cabinet (who hold primary accountability); and other committees on an ad hoc basis where appropriate (e.g. Overview and Scrutiny). Allied to that will be a procedure for escalation and remediation where slippage or risk occurs.

2.5 - A successful change programme needs an effective performance management framework to measure progress. As does, the business as usual of the council and partners.

PCC is undertaking a root and branch review of the approach to performance management. The new performance system in development will cover four areas.

(1) Outcomes for communities and individuals;

(2) Service operation, effectiveness, and delivery (including productivity and efficiency);

(3) Corporate health of the council; and

(4) Insight and learning from regulators, peers, and special interest groups.

The performance framework will be more than just performance indicators. It will utilise both quantitative and qualitative measures.

• Quantitative - performance indicators, needs assessments, evaluation reports, budget monitoring.
• Qualitative - peer reviews (e.g. LGA corporate peer challenge), external reports (e.g. the public interest and in focus reports from the LGCSO), consultation findings, audit reports, and Overview and Scrutiny findings.

2.6 - Where performance indicators are used there will be a consistent approach to the data provided through regular internal and public reporting. That will include baseline data; time series data; latest data; comparators (e.g. Lancashire district councils, the North-West and England); ambition (i.e. desired direction of travel or broad target); RAG ratings; and commentary explaining changes in performance plus remedial action where needed.

All measures being reported by the Office for Local Government (Oflog) via their Local Authority Data Explorer will be included as a minimum (and reviewed on a regular basis as Oflog continues to expand their data set). While many functions are the primary responsibility of the county council (e.g. social care) or partners (e.g. crime) it is appropriate for these to be monitored in a Preston place dashboard.

Firstly, as PCC are place leaders and advocates for Preston and its residents; secondly as these measures are wider determinants of outcomes for those communities; and thirdly as they are an indication of the effectiveness (and productivity) of partnership working.

3.0 - Inclusive growth and shared prosperity

3.1 - Growth plans are key to the long-term productivity, efficiency and effectiveness of public services, not least in a period of reducing funding from government. However, it must be inclusive growth, and it must deliver shared prosperity. As such it will grow the tax base (and council revenue) but also reduce demand for services by improving outcomes for residents. PCC achieves this through the 'Preston Model' which is founded on the principle of CWB.

3.2 - An example is the Making Homes from Houses project, which has won national awards (Empty Homes Network Awards 2022). It's a partnership with Community Gateway Association (CGA) which uses S106 affordable homes funds, CGA investment and Homes England (HE) grant to purchase empty properties to provide affordable rented homes which the council has nomination rights over.

So far, £820k has been invested by PCC using S106 contributions, with a total of £3.9m being spent to deliver thirty affordable rented homes (with that figure expected to rise to over 50 homes).

3.3 - Other major projects delivering inclusive growth and shared prosperity include Harris redevelopment - £16m investment; Harris Quarter (culture, heritage, and leisure); Salmesbury (cyber and digital); Station Quarter (commercial); Stoneygate (residential); Markets - £5m investment; Animate (leisure) - £45m investment; UCLAN masterplan (learning) - £200m investment; Towns Fund (streetscape and parks) - £21m investment; and Levelling Up Fund - £20m investment.

3.4 - All the above have robust governance and accountability to ensure value for money. For example, the Towns Fund Board is shaping the delivery of that programme for the city and link back into council governance through a specific Towns Fund Assurance Framework which is overseen by a Monitoring and Evaluation Group.

4.0 - Technology and digital

4.1 - Technology is being utilised to streamline processes, build capacity and improve delivery. E.g.

• Review and updating of systems and processes within the last few years e.g. HR and Payroll, E-Learning, E-Recruitment, Accident Reporting, Agency Managed Service, EAP, Time Recording, pension enrolment.
• iTrent dashboards - access to data re turnover, absence, establishment, temporary contracts, agency.
• Mobile self-service access for staff to payslips, leave requests and approvals.
• E-documents for overtime, standby and bank holiday time and expenses.
• E-recruitment system to replace time-consuming manual process.
• Online Learning tool giving better access and monitoring of mandatory training.
• Website development continues with the introduction of ChatBot and more services and processes that can be completed digitally. In the year 2023 nearly 16,000 transactions were carried out via the website.
• Planning application validation has been speeded up using Apas an AI tool from Agile Applications, which is saving around £10k a year and freeing up staff to absorb other tasks in planning.

4.2 - Other technological improvements include electronic contract signing; Exacom for Community Infrastructure Levy, Section 106 and building control; and the Civica App for Environmental Health and private rented housing.

5.0 - Shared services and Delivery models

5.1 - Outcomes are the primary consideration when deciding appropriate delivery models for services. The most efficient and effective mechanism is paramount, whether that be in-house, shared with another council or contracted out.

5.2 - The Shared Service partnership brings together Revenues and Benefits teams from PCC and Lancaster to improve the delivery of the service to residents and businesses and reduce costs. Cumulative savings in the ten years to date amount to more than £10m, achieved primarily by streamlining processes and reducing staffing costs.

The current establishment for the existing Shared Service totals 92 full time equivalent (FTE) posts, in comparison to 178 FTE posts at the start. The Shared Service has built up a strong record of business transformation - e.g. online services, IVR telephony, hybrid mail and working with third party suppliers on debt insight. Most recently debt insight officer roles work with 'hard to collect' and ''hard to reach' debtors, using the latest technology and data sets. In June 2022, the agreement was approved for a further ten years.

5.3 - Other examples include:

• The fraud team are part of a tri-partite arrangement with Lancaster and Fylde.
• Chipside Partnership is a joint service between nine district councils in Lancashire for the provision of on-street parking enforcement.
• CCTV in Preston town centre is operated jointly with the CCTV function at Blackburn with Darwen.
• Central Lancashire Plan is an initiative between Preston, Chorley and South Ribble councils to develop a joint Local Plan for the (informal) greater Preston economic area. The joint working has existed for about 15 years now and is seen nationally as good practice.
• The leisure offer - marketed as Better Health - has been transferred to Greenwich Leisure Limited (GLL). Savings of circa £750k. Consideration was also given to closing a site and maintaining the rest as council run or procuring from a private company. The balance of evidence led to the transfer to GLL.
• Cosy Home in Lancashire (ChiL) is a partnership of the 15 councils in Lancashire, offering residents in the region access to energy efficiency grants, affordable heating solutions, energy advice and support on a range of money saving energy measures, to help heat and insulate their homes.

5.4 - Delivery models are regularly kept under review and adjusted where appropriate. E.g.

• Rough Sleepers Initiative was previously contracted out but has been brought back in house as that enabled easier links with other support services and thus improved outcomes for service users.
• Externalising the provision of waste services was considered but after a great deal of analysis this was not taken forward for several reasons. However, an external efficiency review of the service was carried out and changes have realised circa £200k savings.
• Reviewed potential for trading company - e.g. wind farms - but risk analysis showed it wasn't feasible.
• Following an external investment property review the property team have been negotiating rent reviews with tenants achieving an extra £50k income. Freehold assets which have no passing rent will be sold.
• Reduced city operations from three buildings (the Town Hall, Lancastria House and Premier House) to one building (the Town Hall). Wider rationalisation of council estate has realised circa £200k savings.

6.0 - Productive workforce

6.1 - In 2014 the council workforce was 1,300 full time equivalents (FTEs). A decade later that is down to 600 FTEs. A reduction by over a half, means it is more important than ever that the current workforce is highly productive and motivated. Key to that is staff welfare, good attendance, skills growth and retention of knowledge and experience.

• Occupational Health, health checks, counselling, physiotherapy, mental health support and flexible / hybrid working  all help to keep staff working productively. In 2022/3 the absence rate was 15.8 days per FTE. This is now down to 13.8 days per FTE in 2023/24. While still too high and there is much more to do it does evidence a positive impact and encouraging direction of travel.
• The transfer of supplier for DSE eye tests and basic VDU glasses has led to a quicker process for the employee and cost saving in time due to an easier administration process and lower price per eye test.
• Review of personal safety devices for staff will consolidate numerous individual contracts saving a significant amount of administrative time in matching invoices to devices and paying invoices in a timely manner.
• Purchase of new Hand Arm Vibration testing devices to modern specifications is enabling more accurate readings in less time.
• The introduction of a Salary Sacrifice Shared Cost AVC Scheme has delivered savings just over £49k in 2023/24 (less scheme fees) on employers' national insurance (NI).
• The Neutral Vendor Agency Contract has saved £135k on agency costs in 2023/24.

6.2 - Trade Union Time/ Equalities

Trade unions

• We have 5 trade union representatives (5.0 full time equivalent)
• We have no trade union representatives who devote at least 50% of their time to union duties
• We recognise four trade unions at the council - UNISON, UNITE, GMB Union and ALACE
• The estimated spending on trade unions (estimated proportion of time spent on trade union duties x individual salaries) = £4537.02 per year
• The estimated spending on trade unions as a percentage of the total pay bill is 0.02%

The Council has one Part Time Equalities officer who supports and drives our equalities programme.

7.0 - Ask of government

7.1 - Funding:

• Multi-year / long-term funding settlement based on need (both place infrastructure and socio-economic deprivation)
• Public works loan board (PWLB) interest rates at more competitive levels
• Greater flexibility and local choice around the spending of capital receipts.

7.2 - Growth:

• Simplify the growth funding landscape. Direct single funding, not bidding into multiple different pots.
• New devolution and city deal with a commitment to the real living wage for all public sector employers.
• Investment in local economic development capacity, skills and experience, plus better data.

7.3 - Housing:

• Powers and funding (single plan and pot) to build good quality affordable homes. Including increased Affordable Homes Programme grant levels, reform of right to buy and a ban on no fault (s21) evictions.
• Increase local housing allowance (LHA) rates and the subsidy for temporary accommodation.

7.4 - Other:

• Legislation changes to enable councils to enforce more effectively - e.g., s46 waste, ANPR in car parks.
• National climate plan and funding for local areas to retrofit homes and public sector estate, grow the electric charging network and increase use of green energy sources.
• Programme of shared capacity and skills (potentially through the LGA and/or Oflog) to support local areas in the development of AI and data science.
• Local government re-organisation into three unitary authorities across Lancashire and radical devolution of powers to local leaders.