Strategic Plan 2006 to 2011 (P.40-2006) - 13th amendments

STATES OF JERSEY

r

STRATEGIC PLAN 2006 TO 2011 (P.40/2006): THIRTEENTH AMENDMENTS

Lodged au Greffe on 6th June 2006 by the Deputy of St. Ouen

STATES GREFFE

STRATEGIC PLAN 2006 TO 2011 (P.40/2006): THIRTEENTH AMENDMENTS ____________

After the word "Appendix" insert the words – ", except that,

1. (a ) o n page 14, first paragraph,after the words "body of the Plan" insert the words "The Council of Ministers will ensure that priorto the developmentofanynew initiatives, policies orstrategies, consideration will begivento all cost, revenue andmanpower implications whichmay arise from the proposals. Priority will begiven to those which can beachievedwithin existing revenue and manpowerresources.";

(b ) in the Council of Ministers' Top Priorities on pages 14 to 15, in the Existing Priorities', insert the

following item –

" B a la nce the States income and expenditure within the financial constraints/ cash limits agreed in the Annual Business Plan;";

(c ) in the Council of Ministers' Top Priorities on pages 14 to 15, insert the following New Priority –

" 1 1 .       B  a l a nce the States income and expenditure, to include

• S t a y ing within agreed financial constraints/limits;

• F u r th er improve the delivery and efficiency of public services.".

2. in CommitmentOne, before Outcome 1.1, insert the followingnewOutcome –

" 1.1 S ta tes' revenue and capital expenditure is effectively controlled.

In d i c ated by:

• T h e States will only pursue activity relating to revenue and capital expenditure, which has been described, costed and approved by the States in the Annual Business Plan of the preceding year.

W h a t we will do:

1 .1 . 1  B etween 2007 and 2011, work within the revenue expenditure forecasts indicated in Table  4.1 of

the States Business Plan 2006-2010. (CM)

1 .1 . 2  L imit capital forecast figures to £39  million for the years 2006 to 2009 and£43  million in 2010

and 2011. (CM)

1 .1 . 3  A dd to the capital forecast figures the contribution of the Dwelling Houses Loans Fund until 2011.

(CM)

1 .1 . 4  S eparately identify financial support required for the income support scheme. (T&R)"

3. in CommitmentSix,Outcome 6.1 –

(a ) af t er the existing Indicators insert the following new Indicators –

" W h o le life costing of capital projects.

• T h e ongoing cost of new/amended legislation understood and provided for.

• A  g re e criteria for the use of Strategic Reserve.";

(b ) in Action 6.1.1, after the words "by early 2008", insert the words "which will remain fixed at 3%

for a minimum of 3 years";

(c ) af t er Action 6.1.3 insert the following new Actions –

" 6 .1 . 4 . E  n su re that any new policies will be financed within existing resources unless otherwise agreed by the States Assembly in the Annual Business Plan; (CM)

6 .1 . 5 D el i ver the £20 million cash savings as identified in the Change Programme by 2009 (CM) 6 .1 . 6 D e li ver all savings as identified in Public Sector reorganisation: Five Year Vision for the

public sector (P.58/2004) (CM);

6 .1 . 7 P u b lish annual performance reports and present the Annual Business Plan in a form that

reveals the full cost of providing services , including output targets (T&R);

6 .1 . 8 E n s u re that the revenue consequences of capital projects and the legislation programme are

fully  quantified,  and  that  the  ongoing  cost  of  new  or  amended  legislation  are  fully understood and provided for. (T&R)

6 .1 . 9 A g re e a policy for the Strategic Reserve.".

4. in CommitmentSix,Outcome 6.2, after Action 6.2.9 insert the followingnewAction –

" 6 .2 . 10 Review policies on the improvement of the delivery and efficiency of public services to ensure continued progress (CM)".

DEPUTY OF ST. OUEN

REPORT

Amendment (1)(a)

1. (a ) on page 14, first paragraph, after the words "body of the Plan" insert the words "TheCouncil of Ministers will ensure that priorto the developmentofanynew initiatives, policies or strategies, consideration will begiven to all cost,revenueandmanpower implications which mayarise from theproposals.Priority will begiventothose which can beachievedwithin existing revenueandmanpower resources.

The purpose of this amendment is to establish an overarching principle which will encompass the whole of the Strategic Plan. It is a statement of intent designed to underline the promises made by this Assembly to the Public that all States finances will be managed in an efficient and prudent manner. This is especially relevant at this time when we are proposing amongst other things to introduce a new Fiscal Strategy where residents and businesses alike will be expected to contribute more in the way of taxes to support existing public services.

One must recognise that an important part of the proposed Fiscal Strategy is dependant on managing States expenditure thereby limiting the increased burden on the taxpayer. The public expect that this will happen and therefore it is important that this view is reaffirmed.

The Council of Ministers are quite rightly responsible for delivering this commitment both collectively and separately supported by their individual ministries. Equally it is the role of the Council of Ministers to effectively prioritise revenue and manpower resources supported by the rest of the Assembly. By including this statement it reaffirms the Council of Ministers position and makes a powerful declaration to all that we will continue to follow this philosophy. This is the foundation of any good government.

Amendment (1)(b)

(b ) in   the Council of Ministers' Top Priorities on pages 14 to 15, in the Existing Priorities', insert

the following item –

• " B a lance the States income and expenditure within the financial constraints/ cash limits agreed in the Annual Business Plan;"

This amendment is designed simply to highlight how the States manages its finances and ensure that previously agreed  guidelines  are  followed  by  the  Council  of  Ministers  and  States  as  a  whole.  This  was  one  of  the commitments included in last year's Strategic Plan which the States wholeheartedly agreed with and yet is omitted from this Strategic Plan. It was only last year in both the Resource Plan and the Budget that we were told that one of the main ways of controlling inflation was for the States to keep its own expenditure under control and not create budget deficits. However now we see within this Plan the Council of Ministers promoting an increase in expenditure over and above what has been agreed.

It is important to understand the relationship between the Strategic Plan and the States Business Plan. The Strategic Plan is designed to translate what people want into what we must deliver, whereas the Business Plan translates what we must deliver into how we will deliver it and with what resources. It is therefore important that we ensure that there is a direct link between the Strategic Plan and the Business Plan. The Business Plan as provided for in the new Public Finances Law will be produced by the Council of Ministers so that States members can approve public sector spending plans and perhaps more importantly to inform the wider public of how States resources and taxpayers' money will be used.

It is therefore important that we include the above priority into the Strategic Plan as this provides some comfort and security for the general public as well as guidance to our Ministers.

During the period of this Strategic Plan the Island will be moving to a new Tax structure which will cause a significant  drop  in  corporate  tax  revenues.  It  is  therefore  essential  that  we  balance  the  States  income  and expenditure within clearly defined limits. These limits are quite rightly set when the Annual Business Plan is

agreed by the Assembly and it is therefore right that we follow this procedure.

Amendment (1)(c)

(c) in   the Council of Ministers' Top Priorities on pages 14 to 15, insert the following New Priority –

" 1 1 .  B alance the States income and expenditure, to include –

• S ta y i ng within agreed financial constraints/limits;
• F u r th  er improve the delivery and efficiency of public services."

The purpose of this amendment is in many ways a continuation of the last amendment in that it is designed to ensure that not only do we recognise that balanced budgets should be an existing priority but that it should also be an ongoing one. Currently the States have committed themselves to managing States finances within agreed limits and I believe this should be an ongoing commitment. It is worth pointing out that the States have already accepted the principal to operate within agreed financial constraints.

We were reminded of this in last year's Business Plan 2006-2010: P.151/2005 where it states that; the Public Finances Law prevents the deficit in any year exceeding the forecast balance in the Capital fund and as a result the level of forecast deficits is unsustainable much beyond 2006 without further tax measures being approved and implemented. This is a stark reminder that it is the taxpayer who foots the bill for the inability to control expenditure and any increases proposed.

It further states that the achievements of balanced budgets over the timescale will depend on the States continuing to maintain a tight control on expenditure growth which will require adherence to the current planning totals for revenue and capital and recognise the impact of any unplanned changes to tax allowances.

If we are to balance the States income and expenditure we also need to continue to improve the delivery and efficiency of public services. I am aware that the States Modernization programme is designed to produce efficiency savings by 2009 however this Strategic Plan covers a greater period.

If we are to maintain the impetus and continue to promote the Better, Simpler, Cheaper, philosophy we need to restate the importance of maintaining this initiative.

Amendment (2)

2. in Commitment One, before Outcome 1.1, insert the following new Outcome –

" 1.1 S t ates' revenue and capital expenditure is effectively controlled.

In d  ic ated by:

• T h e States will only pursue activity relating to revenue and capital expenditure, which has been described, costed and approved by the States in the Annual Business Plan of the

preceding year.

W  h a t we will do:

1 .1 . 1  Between 2007 and 2011, work within the revenue expenditure forecasts indicated in Table 4.1

of the States Business Plan 2006-2010. (CM)

1 .1 . 2  Limit capital forecast figures to £39  million for the years 2006 to 2009 and£43  million in

2010 and 2011. (CM)

1 .1 . 3  Add to the capital forecast figures the contribution of the Dwelling Houses Loans Fund until

2011. (CM)

1 .1 . 4  Separately identify financial support required for the income support scheme. (T&R)".

This amendment is designed to describe not only the outcome expected from a commitment to balance the States income and expenditure but also indicators which can be measured to assess progress towards the outcome.

Under the heading Strategic Aim 9 of the 2005-2010 Strategic Plan approved last year, the following comments were made:

Future financial forecasts show that current levels of spending and taxation are unsustainable. The States must tighten its belt and reduce spending.

We are committed to being a relatively low spend, low tax economy therefore spending reductions and improved efficiency are our first target in order to minimise tax increases.

Subsequently, in the 2006 States Business Plan it was stated that:

Proposed targets for 2006 to 2010 are for total States net revenue and capital expenditure of an average growth of 2.5% within which the revenue and capital allocations may vary year on year but with a minimum capital allocation of £39 million. 3 year cash limits were accepted by all major Committee Presidents with Committees required to manage their budget within these cash limits. Furthermore the Capital programme of £39 million was equally accepted by all major Committee Presidents and supported by the Chief Officers who were consulted.

The States also agreed to reduce expenditure growth to 2.5%. This decision enabled the financial position currently showing a small deficit to remain sustainable in the short term

Revenue expenditure targets were set and agreed and an expectation was raised that these targets would be met.

The new Strategic Plan however proposes revenue expenditure much higher than those targets which were only agreed last year. This is a major departure from the current position and some cause for concern particularly so because in the main those same Presidents who signed up to those targets are now Ministers who collectively make up the Council of Ministers.

Expenditure growth has also been increased and varies from 2.8% to 4.4%, this isn't what was agreed by the States or promoted by those same individuals.

Total States net revenue has also been increased above agreed targets and large deficits are being forecast.

The first two action points therefore simply reflect the current position as agreed by this Assembly and support other strategies that are now being implemented such as the Fiscal strategy, Income Support Scheme and the States' modernization programme.

The third action Point reflects the new decision by the Council of Ministers to use the Dwelling Houses Loans fund to support the refurbishment of the social rented Housing stock as well as the Town Park and other capital projects.

Where this action differs from the view expressed in the Plan by the Council of Ministers is that it is my intention that this sum of money should only be used for essential capital projects and not ongoing revenue expenditure. It must be remembered that this is a finite sum of money totalling approximately £32 million. The States are already aware that essential infrastructure such as main roads and drains are currently underfunded so it follows that part of this sum could be used for such a purpose. It must also be remembered that until last year the States had a planned annual capital programme of £45 million. This figure was reduced so that revenue expenditure could be increased thereby reducing any forecast deficit. It is therefore the intention of this amendment to increase the capital allocation whilst containing on going revenue expenditure.

On page  8 of last year's States Business plan 2006 to 2010 it states that; ahead of 2010 the States will need to address a number of funding issues and a favourable financial position will make this much easier to deal with. Any surplus funds could be used to.

Fund the transitional arrangements in relation to the introduction of the new income support.

Establish a stabilisation fund to smooth cyclical variations in the economy and provide necessary funding to continue support of the Economic Growth plan.

Finally provide the ability to maintain GST at the level of 3% for an extended period.

It follows therefore that these issues should be addressed at the proper time when the States are in that favourable financial position and not before. It is also important to realise that reaching this position is dependant on a number of factors not least of which is the timely introduction of the Goods and Services Tax.

It is for this reason that I have included the final action point which reflects the view that when a Goods and Services Tax is introduced we need to have a properly defined income support scheme. Part of this work must include the identification of what financial support will be required and where the funding will come from.

Amendment (3)

3. in Commitment Six, Outcome 6.1 –

(a ) a ft er the existing Indicators insert the following new Indicators –

" W  h o le life costing of capital projects.

• T h e o ngoing cost of new/amended legislation understood and provided for.
• A g r e e criteria for the use of Strategic Reserve.";

(b ) in   Action 6.1.1, after the words"by early 2008", insert the words "which will remain fixed at

3% for a minimum of 3 years";

(c )       a ft er Action 6.1.3 insert the following new Actions –

"6 . 1 .4 . E n s ure that any new policies will be financed within existing resources unless otherwise agreed by the States Assembly in the Annual Business Plan; (CM)

6 .1 . 5 D e l iv er the £20 million cash savings as identified in the Change Programme by 2009

(CM)

6 .1 . 6 D e l iv er all savings as identified in Public Sector reorganisation: Five Year Vision for

the public sector (P.58/2004) (CM);

6 .1 . 7 P u b l ish annual performance reports and present the Annual Business Plan in a form

that reveals the full cost of providing services , including output targets (T&R);

6 . 1 .8 E n sure that the revenue consequences of capital projects and the legislation

programme are fully quantified, and that the ongoing cost of new or amended legislation are fully understood and provided for. (T&R)

6 .1 . 9 A g r e e a policy for the Strategic Reserve.".

The first part of this amendment is simply to underline the fact that support for the introduction of a Goods and Services Tax was on the understanding that it would be fixed at 3% for a minimum of 3 years.

The remainder of the amendment deals with the implementation of previously agreed States decisions most of which were encompassed in the proposed Fiscal Strategy and last year's Strategic Plan.

Great importance has been given to managing the States finances and this task is now for the most part the responsibility of the Council of Ministers and subsequently the States as a whole. It is equally important that these responsibilities are included in the Strategic Plan as without this commitment financial forecasts will be difficult to meet.

At a time when our residential population is being expected to pay more for public services it is the Council of Ministers duty to ensure that they manage a balanced budget and do all that they can to provide an efficient and cost effective public service.

It is extremely important that the Council of Ministers meet the challenges set in the Fiscal Strategy. These include:

Managing the States expenditure and delivering the cash savings of £20 million from efficiencies.

The 4 year resource allocation 2005 to 2008 identified an increase of 200 FTE posts which would be offset by savings and efficiencies arising out of the change programme. This estimated a reduction of 300 FTE posts over the 5 years 2005 to 2009. It was expected that there would be no increase in overall staff increases. See section 8.2.

Target for the change programme was to deliver a cash saving of £20 million from efficiencies.

6.1.7 Performance management framework will be introduced enabling performance against targets set in department plans to be monitored by the Corporate Management Board.

The States unanimously supported P.58/2004 entitled Public Sector Reorganisation; Five year Vision for the Public Sector. See Appendix.

The proposition included a detailed analysis of how and when those savings would be made. This is as relevant today as it was then and the Council of Ministers and the States as a whole need to be seen to be committed to delivering these savings and efficiencies.

It is equally interesting to note that there is a change of emphasis in the Strategic Plan as proposed which seems to be supporting a Spend not Save philosophy and contrary to recent States decisions.

The New Vision on page 5 highlights this fact .Although the Council of Ministers are declaring that they will deliver £20 million savings as promised in the Change Programme, they are now suggesting that these savings should be spent on such things as roads, housing, health and education. I recognise that all departments would like more money however we can't spend what we don't have.

As far as Health and Education are concerned Resource Plans have already been agreed and supported by the States as a whole. Also priority has already been given to these two departments.

If there is a decision to be made on whether the States should spend some of the savings then first we should properly identify those savings and turn it into real cash.

Currently we have no simple way of identifying the savings or indeed monitoring whether they have indeed been made. It is important that clear targets are set and measured against performance if we are to achieve the desired outcome.

Action points 6.1.8 and 6.1.9 are actions which were included in the 2005-2010 Strategic Plan but omitted from the new Plan. Both actions are self explanatory and are essential if we are to properly manage all States finances. Finally it is my view that we must have a clearly defined policy for the Strategic Reserve which is why I have included this in my amendment. Many ideas have been promoted in the past including using the interest to fund particular initiatives, and yet we don't have a coherent policy for this reserve. It is therefore essential that this is developed and eventually agreed by the States.

Amendment (4)

4. in  Commitment Six, Outcome 6.2, after Action 6.2.9  insert the following new Action –

" 6 .2 . 10 R e v ie w policies on the improvement of the delivery and efficiency of public services to ensure continued progress (CM)".

Due to the fact that this is a 5  year plan I believe it is important within that timescale to review current policies designed to improve the delivery and efficiency of the Public Service. By including this action the States will ensure that every effort will be made to continue the progress made so far.

Currently the Plan is almost silent on this subject and seems to concentrate solely on existing programmes. This is not to say that those programmes are wrong in themselves however if we are to be pro-active in this area then we need to be maintaining the momentum that exists at present.

Much good work has been done but we can't be complacent, changes in both attitude and culture do not happen over night. We have a good workforce that must be encouraged to meet the challenges of the future, this can't be achieved without strong leadership and guidance.

Financial and manpower implications

There are no additional financial or manpower implications for the States arising from these amendments which, in fact, seek to constrain States' expenditure within agreed spending limits and avoid the increases provided in the Plan as proposed by the Council of Ministers.

APPENDIX

Extracts from P.58/2004

Main themes

7. T h e key messages in the five year vision for the public sector are as follows: T h e C  ustomer will be at the heart of everything we do

7 .1 T h e vision describes how the customer can access services through one point of contact, called the

Customer Services Unit, and that they can do this in a number of ways. They can telephone the call centre which would also have evening working hours to improve access. They could drop into a contact centre and deal with an assistant face to face, again this would be open beyond normal working hours to suit customer demand, and finally, there would be increasing use of e- mail contact which would be available 24 hours a day 7 days a week.

7 .2 T h e customer access model would be supported by information held electronically in a robust

database, which is kept up-to-date and accurate, and which allows cross departmental issues to be handled by one assistant. Front line employees would have as a target the satisfactory resolution of  80  per  cent  of  all  enquiries,  the  remaining  20  per  cent  being  passed  to  an  appropriate professional for action.

7 .3 T h e Customer Services Unit handles not only enquiries from the public, the external customer, but

also deals with enquiries from members of staff or other service areas of the States, or internal customers,  who  wished  to  access  the  common  support  services  of  Human  Resources,  ICT, Property and Finance. In order to achieve further economies, these support services are grouped together in a Support Services Centre as part of the Customer Services Unit. External and internal calls will be handled through the same processes. For example, in relation to HR, this might mean that a member of staff might call the Customer Services Unit in order to find out about maternity leave for example or other policies, or to pass on details of training courses attended, or leave of absence for recording.

7 .4 V e ry often the experience of the customer in the past has been that they have to approach a

number of departments to try and discover which department can answer a particular enquiry. Because  individual  departments  do  not  have  detailed  knowledge  of  the  workings  of  other departments, they may not be able to provide the correct information in order to direct the customer to the correct department. The proposals describe how the customer would ring one number and speak to one assistant, who would be able to access information for the customer and advise him or her how to go about making an application for any number of functions, would be able to forward any application forms necessary in respect of any department or service area, and also would be able to make bookings and check the status of transactions. The end result would be the customer being impressed by the service received and feeling that they had had a good experience.

7 .5 I t is not proposed to remove the direct dial facilities by which customers, both internal and

external, can contact an individual employee as this may not be perceived to be an improvement to the service where working relationships between customers and officers are already be in place. However, it is anticipated that as customers experience the levels and quality of service from calling the Customer Services Unit the number of calls that are made directly to individual employees will decrease.

7 .6 A s a result of this the States of Jersey will be recognised as providing a cost effective first class

service, modern in our outlook and valued by our community as a whole.

W e a ll work together for the benefit of all concerned

7 .7 In order to combat competition, barriers to progress and the silo mentality that currently exist

between departments the vision describes how the Corporate Management Board and all service areas will work together in a new structure. The whole organisation will act seamlessly to deliver one set of prioritised aims which has been agreed by the States in a single unified strategic plan. The Corporate Management Team will be responsible for breaking down barriers to improve performance. They will be supported by a Change Management Team which will drive the process forward.

7 .8 It is proposed that in between the service delivery areas and the Corporate Management Board

there should be an Integrated Policy Network unit responsible to the Corporate Management Board. The unit works by seconding staff with particular expertise from other service areas to work on projects or policies, after which these officers return to their usual employment. A major benefit of policy being developed in a central unit is to ensure that policy making across the States of Jersey is joined up', and that policy developed for one service area neither conflicts with that of another service area, nor allows the development of gaps in provision between service areas. This joined up' thinking ensures that criticism, such as that levelled in the Kathy Bull Report (2003), should not happen again.

7 .9 T h e Corporate Management Board will also need to take the lead on integrating and rationalising

the States property portfolio. This will be in accordance with the decision of the States in July 2002 to approve the report and proposition "Machinery of Government: Proposed Departmental Structure  and  Transitional  Arrangements  (P.70/2002),  with  regard  to  the  transfer  of  the management of the States property portfolio to the Treasury and Resources Department. This would include policy responsibility for all the fragmented arrangements across departments for property maintenance, design and procurement.

C u lt u re Change

7 . 1 0 U nderpinning the  change  is the  culture  for both employees  and  the organisation  as whole.

Comprehensive training will be provided to our managers and employees to develop a way of working that is fast moving, forward thinking, customer serving and flexible. By means of training and assessment all employees will be allowed to develop a can do' mentality and work to shared principles and goals. As a result of this all will feel a sense of pride and achievement in what they do.

B u s in ess Process Re-engineering

7 .1 1 B usiness process re-engineering (BPR) is fundamental to making savings across the organisation,

particularly in the areas of customer access and support services. The public sector currently has many different processes and ways of working. Business process re-engineering ensures that, where possible, only one method or process is adopted for similar business processes and that the selected process is based on best practice.

In t e ll igence Led Government

7 .1 2 T he proposals describe how the States Strategic Plan, supporting plans, operational work and

employees will all be subject to ongoing performance measurement, review and improvement in order to deliver services in better, simpler and cheaper ways. This approach will ensure resources are coordinated to work together efficiently and effectively across the whole organisation. The employees in the organisation will be trained, developed and held accountable for delivery of service and each employee will be clear through service level action plans how their own work and the work of the service area contributes to the overall strategic aims. Managers at every level will be accountable against clearly defined outcomes. This will result in economies of scale, less bureaucracy, cost and post savings and resources being focussed on where they are most needed.

5.3 C o rnerstone 3:   Intelligenc-eled Government

Intelligence-led government means that the public sector is informed by customer feedback and responds to good practice elsewhere. Decisions are made on the basis of valid and timely information from service delivery areas. The public sector has a clear set of aims and objectives and measures its progress towards them. Behaviour is driven by relevant performance measures and continuous improvement at all levels.

The public sector has strong leadership and every member of the organisation works to achieve the same goals. The needs and expectations of customers drive the Vision and Strategy. A five year Island Strategic Vision, created by the Council of Ministers and approved by the States is put into meaningful practice by the Corporate Management Board through the development of a Public Sector Strategy. This is translated into Service Delivery Action Plans for each service area. Employees in the different service delivery areas work towards delivering the overall strategy thanks to a culture of continuous improvement and accountability. Staff development is fostered by an improved performance management system with individual targets and objectives (see fig  5.3).

As a result, efficiency savings are achieved by a better, more effective way of working, rather than by cuts in service. The public sector continuously improves the service it offers and achieves its high level aims and objectives by ensuring that everything done by the service delivery areas is in line with the overall Public Sector Strategy. This is reviewed and assessed regularly.

There has been a fundamental change in culture since the public sector started to define clear objectives, develop effective monitoring systems and hold managers to account for delivery.

This has been achieved because –

• a c le ar distinction has been drawn between the role of the political sector and that of the public

sector in defining and delivering government strategy. The political Island Strategic Vision sets out the desired economic, social and environmental vision of Jersey as a place to live, to visit and to do business, and defines the financial parameters within which public sector services must be delivered. This is underpinned by a Public Sector Strategy which describes what the public sector will do in order to deliver the overall vision;

• t h e re is an integrated planning and review process and cycle. This is based on stakeholder needs, information from performance measurement, benchmarking and research. The planning process is

owned by the Corporate Management Board;

• t h e P ublic Sector Strategy provides a reference point against which policy decisions, performance

and resource deployment can be reviewed by the Corporate Management Board. It is underpinned by action plans, developed at service level, which set out how individual services will contribute to overall strategic aims, through direct and shared objectives;

• t h e P ublic Sector Strategy sets meaningful aims and targets which, where necessary, cut across service boundaries. Accountability is driven at all levels through a corporate performance

management system informed by dynamic performance data;

• m a n agers at every level are held accountable against clearly defined outcomes. Competing resource demands can be evaluated against strategic aims and objectives and value judgements

can be made based on timely performance data.

Figure 5.3 Strategic planning and performance management framework Costs and benefits

The four cornerstones of change together with the themes identified above will succeed in delivering up to £29 million of annual improvement in the value of Public Sector services. This is made up of £9 million of service improvements and £20 million of cash savings achieved through £5 million in capital receipts and £15 million savings in running costs.

These benefits and savings achieve the overall objectives of improving service and reducing annual costs by £20  million within five years.

1. C o st/benefit analysis

A summary of the costs of each theme, both initial and ongoing and their associated savings is shown in Table 7.1 below.

Project Theme Estimated Estimated Estimated Investment Net Annual Post

Savings Savings £000's £000's FTE's

Programme Management 600 0 0 5,600 110

200 5 9,500 65

4,800 120 300

(100) 20,000

Table 7.1 Cost/benefit analysis Savings

This shows that five years after the introduction of the Vision, net annual savings of approximately £20  million should be achieved, with an associated loss of approximately 300 posts. These savings will come from the following: –

Customer  Focus Significant  customer  improvement  will  result  from  the

& BPR integration of all customer contact staff across the States. Using evidence from Employment & Social Security, IBM and others, estimates  have  been  extrapolated  to  predict  the  benefits  that could be achieved. New technology and BPR to both reduce and improve processes is key to reducing staff and administration costs. Allowance has been made for a 10% increase in demand from the improved customer focus with 10% of transactions coming through the web site. All processes across the States will benefit  from  being  re-engineered  around  modern  ways  of working and technology. Evidence suggests that performance improvements of 40% – 60% and staff savings of between 10%

– 20% can be made from just the re-engineering process. A conservative 30% saving in administration costs and associated back office staff savings of 5% have been used to produce the estimated £5.6  million saving.

Working By reorganising the structure around the customer (both internal Together and external) the support services functions of departments will

be removed and reorganised within the Customer Services Unit. This will provide the opportunity to reduce costs resulting in a saving of £4.5 million. The strategic management of the States property portfolio will release another £5 million each year.

Intelligence-led The introduction of co-ordinated strategic and action planning Government and performance management will result in significant savings.

Evidence suggests that performance management systems can save  10%  per  annum  from  gross  costs.  A  2%  per  annum performance improvement saving has been used here.

Culture Whilst culture change on its own will not produce any direct

savings it has quantifiable and observable benefits and is key to enabling the other savings identified above.

To achieve these savings it is essential that an investment is made of approximately £9  million. This investment will be in new systems and technology as well as management and staff capability. These costs are discussed further in section  9.3. Based on the high level analysis completed, and the assumptions below, payback could be achieved in four years.

The loss of posts, whilst extremely regrettable, is a necessary part of becoming more efficient. However, staff losses will be as a result of working together more effectively with improved business processes and not due to a reduction in services. The Corporate Management Board will attempt to manage the loss of jobs by natural turnover, redeployment, retraining, voluntary redundancy (including seeking volunteers for redundancy from those  unaffected  by  the  changes),  voluntary  early  retirement  and  only  if  absolutely  necessary  compulsory redundancy.

A large part of the savings will come from the introduction of performance management and business process re- engineering. Whilst not all savings will be directly realised through post savings (e.g. performance management may save a member of staff half an hour a day) it is still recommended that these savings are taken from budgets. This performance improvement will also enable the organisation to increase its capacity to absorb growth in demand for its services.

The lack of available information across the States makes it difficult to predict accurately the savings that can be made.  However,  even  if  the  savings  have  been  overestimated  and  the  costs  underestimated,  there  is  still compelling evidence that this Vision will both improve performance and reduce cost.

2. B e nefits

In making the case for this major shift in public sector operations, other measurable benefits which may be less tangible have been identified across the different streams of work. There has been a great deal of overlap within these streams and the benefits have been classified for simplicity into three categories; customer, organisational and financial. Further work could be done to research these benefits in more detail to turn observable and quantifiable benefits into more tangible benefits. It is estimated that there is up to £9 million of added value from these improvements in service.

Customer benefits

Access and choice The customer will be able to access the services of the public

sector by whatever means suits them, at the times and places convenient to them.

Quality and speed Customer (internal and external), will receive a high quality,

faster  service,  resulting  in  savings  for  individuals  and businesses.

Look and feel The customer experience will be improved through purpose

designed facilities.

Accountability The  people  of  Jersey  will  be  better  informed  about  the

operation of the public sector service on a day to day basis. There will be transparency, and the citizen will appreciate and value the service.

Organisational benefits

Focus on The organisation will focus on the customer at the highest customer level through a Customer Services Director on the Corporate

Management Board.

Improved The organisation will make the appropriate decision at the decision making appropriate level because function, strategy and policy are all

aligned.

Increased staff Staff  will  want  to  belong  to  an  organisation  which  offers morale improved  career  paths  and  prospects,  job  satisfaction  and

better, consistent management of performance issues such as sickness absence.

Employer of The organisation as a whole will benefit from better public choice perception as an efficient, diverse and challenging place to

work.

Financial benefits

Procurement Savings will be made through better procurement across the

whole public sector service including ICT.

Efficiency Business  process  re-engineering  of  all  central  and  other

processes will result in large efficiency gains through cost reductions,  removal  of  duplication  and  the  release  of  staff energy  to  focus  on  service  delivery  and  the  promotion  of change.

Resource A clear focus on strategy and planning, with the customer in direction mind, will allow the Corporate Management Board to help

direct resources to priority areas.

Strategic A specific review of property will release savings through management of rationalisation,  improved  maintenance  resulting  in  less property portfolio reactive  spend  and  a  reduction  in  storage  and  vacant

accommodation.

8 R i sk s

In any change management programme it is important to identify the risks associated with the specific change and to plan ahead to reduce both the chance of failure and the negative forces acting against the change. The Visioning team has spent some time identifying the ways in which risks for this project could be minimised or eliminated.

Organisational risks