COUNCIL RESTRUCTURE - TERMS OF REFERENCE : Executive on 03/10/2006

Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 03/10/2006
COUNCIL RESTRUCTURE - TERMS OF REFERENCE

ANNEXE 1

COUNCIL RESTRUCTURE - TERMS OF REFERENCE

Objectives

To recommend a senior management structure, not necessarily limited to top Director positions only, that delivers: -

The Council’s Vision, Aims and Objectives

Continuing ‘good or excellent’ CPA and Value for Money outcomes;

To acknowledge the possibility of Local Government Review and, consequently, to avoid radical change with likely high one-off implementation costs with uncertain pay-backs

To address the issues within the Housing Service following the tenants vote in favour of remaining with the Council

To maintain, so far as is possible, on-going savings at top management level

To reflect and make best use of existing Council resources most particularly the talents, knowledge and experience of existing staff

To deliver a structure capable of being adapted to respond to changes that may occur

To maintain well-managed services and functions, with statutory functions fully supported, during the transition period

To improve the corporate capacity for policy development and change management

To ensure the interests of internal and external stakeholders are not compromised as a consequence of the proposed new structure

PROCESS

Process to identify

Potential structures currently in place in other similar organisations

Actions resulting from inspection regimes (CPA, IIP etc.) insofar as they relate to structure issues

Issues of detail that need to be taken into account in evaluating a new structure

Job roles that need to be covered in the new structure,

An initial attempt to cover the job functions in a 4 x director structure

Head of Paid Service to propose a minimum of 2 and a maximum of 4 structure options for assessment.

The potential structures to include headline statements of job purpose of posts identified in the proposed structure to show where responsibilities for existing services will lie. Also a provisional financial assessment and analysis.

Review, in September 2006, by the Executive, taking comments from the Corporate O&S, and the provisional selection of a preferred option.

Comments to be solicited from ‘stakeholders’ (internal including Staff Side, and external)

Support and guidance to be sought from a preferred external adviser (a critical friend), on the preferred option

Head of Paid Service, or Head of Personnel and Central Services under delegation when a possible conflict of interest arises, to report to the Council meeting of December 2006 taking on board the views of the Executive as informed by Corporate O&S.

Implementation of the revised structure is scheduled to begin no later than 1st April 2007.

OPTIONS

Officers to identify the main features and major advantages and disadvantages of the potential structures identified in the January restructuring reports as follows:-

(a) Strategic Director

(b) Customer Focused

(d) Partnership/ Joint Working/ Outsourcing approach

Officers to explore how the 'Daventry' model (without permanent Chief Executive) has been set up with a view to this becoming one of the proposed structures put forward by the HOPS for assessment; and

Officers to assume that (as per 'criteria' section p 38) another 'proposed structure' is based on one of the present Directors becoming a lead Director, with the work of the previous Chief Executive and four Directors being shared between the remaining four Directors (and other staff if appropriate).

Issues that may supplement the terms of reference

To examine how partnership working could deliver cost effectiveness

To ensure, working through the Implementing Electronic Government (IEG) Group, that attention is given, across the board, to the service benefits that may flow from the e-Government agenda

To examine the impact of community partnership issues, including working with the LSP

To deliver positive communication with the community

To embed performance monitoring to support the drive for efficiency savings and create awareness of areas in which improvements could be achieved as well as ensuring the maintenance of a ‘good’ CPA rating

To review the ‘corporate health’ performance indicators to identify areas for attention in order to deliver on targets.

To consider where policy development and project management could fit into a new structure

To acknowledge that IIP re-accreditation is required before the end of December 2006 and to be aware of the new IIP standards in developing the new structure.

CRITERIA FOR THE PREFERRED OPTION

To make the best use of current expertise, including giving development opportunities for staff in the interests of Waverley.

The objective of avoiding radical change would not necessarily eliminate a new structure that has a particular focus such as identified in the report to the January Executive although a clear case in favour of taking a particular new focus would need to emerge at an early stage.

IMPLEMENTING ORGANISATIONAL CHANGE

The effort to implement the preferred structure will gear up when the choice has been made. However, recognising what needs to be done at any early stage will both inform the review and prepare for an implementation plan.

Issues in the Implementation Plan will include: -

Positioning the organisation in relation to the community, partners and service users to establish a clear role and identity

The Management Strategy – how will things be done?

Developing leadership capacity

Other skill development issues (a Training Needs Analysis)

Making performance management work to deliver value for money

Knowledge management and information sharing

Applying the Workforce Plan for Waverley on the ground

Communicating the changes – internally & externally

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ANNEXE 3

The Six Options

The ‘Daventry’ Model

This is about a structure that is driven by functioning without a chief executive and making different management arrangements to ensure that the statutory Head of Paid Service function is covered. It was given this euphemism because it is an approach that is currently being applied at Daventry District Council effectively as a ‘permanent’ management structure.

In 2005, Daventry DC dispensed with the post of Chief Executive after the last Chief Executive resigned his post. In its place, Daventry has a top management team of four directors working as a collegiate who rotate the head of paid service function on an annual basis. They are currently in the second year of operating in this way.

The Evolutionary Approach

This was the title given to using, as the driver for the restructuring, the existing interim management arrangement in Waverley, i.e. the four departmental directors following the deletion of the post of Chief Executive from the staffing structure, and considering how that could best be adapted to meet Waverley’s needs as defined in the Terms of Reference.

The Strategic Director Approach

This would require the Council to determine that the emphasis should be on a top management structure that focused its activity on the strategic direction of the Council rather than on operational matters.

This would see a small top team with a Managing Director whose function it is to ensure that the current activities of the Council are suitably resourced and operating appropriately and to chart the future direction of Waverley to meet the ever changing demands placed on local authorities. This would leave all day-to-day operational matters in the hands of heads of service that would have increased accountabilities.

Designing the Structure for Customer Service

Unlike the first three options that, effectively, start the review exercise from the position of the existing structure, this and the remaining two options would require the Council to determine that a particular principle should drive the restructuring.

This option sees customer service as the driver for change.

Its key is in the front office : back office split with those at the front office, in a contact and/or call centre, recruited for their customer service skills and aiming to deliver, substantially, a ‘one stop shop’ service to the public.

In order to do that, the front office staff would be dependent upon the knowledge, skills and experience of the back office staff.

The ‘Form Follows Function’ Approach to Structure Design

This is an architectural term, first coined by the architect Louis Sullivan, which, during the 1990s, became applied to the design of organisational structures. It is a well tried approach that has been the subject of guidance from the Audit Commission.

This would place the emphasis on considering all of the functions carried out in Waverley and analysing whether the functions could be banded together in a more logical way that would deliver efficiencies, for example by putting all regulatory services together.

The Outsourcing/Partnering Approach to Structure Design

This links two options that could result in fewer directly employed staff working on service delivery, whether front line services or support services. This structures the organisation on a client and contractor basis. The emphasis could be on either outsourcing services to the private sector or joining together with neighbouring local authorities with one authority leading on particular services in the expectation that this would deliver efficiencies.

This option would require staff in Waverley whose expertise is in contracting and/or partnering as well as specific professional competencies.

At one extreme, a local authority could directly deliver all of its services. At the other extreme, all services could be outsourced. The Council would specify services, issue contracts for the delivery and monitor the service outputs. Any point between these extremes could be the preferred option.

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ANNEXE 4

WBC – Structure Review

Discussion Paper for Briefings

The decision of the Council in July 2006 included agreement on the Terms of Reference for the review (Annexe 1) and revised to six the structure options (see Annexe 3) to be considered in detail by the Management Team.

These options are not mutually exclusive but rather have significant areas of overlap.

In carrying out this activity, the Management Team is mindful that a number of significant factors could impinge upon any potential solution such as: -

Ų The possibility of local government review
Ų The local elections in May 2007
Ų The current style/culture of the organisation which has not seen significant organisational/structure change since the mid 1980s
Ų Potential staffing changes at senior management level
Ų The benefits of partnership working
Ų New formal funding structures (e.g. LAA)
Ų The consequences of decisions related to the housing vote
Ų Continuing restrictions on our resource levels
Ų The ‘efficiency’ agenda including the potential contribution, which could be made by e-government enabled transactions etc.
Ų Maintaining the ‘good’ CPA rating
Ų Maintaining the Investors in People Award

These are not seen as barriers to change but as factors that need to be taken into account as this review is progressed. It has been agreed between the three party leaders and at Corporate Overview & Scrutiny that a challenging and rigorous review process is required and this is detailed at Appendix 2.

Analysis of the Six Options

At the request of the Management Team, six officer teams were set up to consider separately and independently, one of the options and carry out a ‘strengths and weaknesses’ analysis. Helped by feedback from these teams, the Management Team has considered in detail all of these six options as the driver for change.

In summary, the current views of the Management Team against all of the options are as follows:

The Daventry Model

Members and officers were informed about the Daventry approach by the visit made to Daventry made on 25th July 2006.

There is a clear indication that their structure is working well for them. Its continuing success will depend heavily on the ongoing cooperation and support of the senior officers involved. However, Members and senior staff at Daventry are uncertain what will happen when one (or more) of the existing directors leave.

Also, others have tried a version of this approach but have reverted to one in which there is a clear and permanent head of paid service. Examples of this are Basingstoke and Deane and Reigate and Banstead, both of which have been visited by Waverley Members and officers. Officers believe Bristol City Council have also tried this approach.

The Evolutionary Approach

Starting from the existing interim management arrangements and working them into a permanent senior manager structure creates the least disruption and allows flexibility to adapt in the future. This approach reduces risk, builds on existing talent and could be the least financially consequential. This non-radical option aligns with the Council’s usual approach.

The Strategic Director Approach

Up until now Waverley has had a service orientated structure that has not made it easy to deliver a consistent Corporate Strategy. This has been drawn to our attention in CPA assessments.

Modern local government requires a strong corporate element. This is an important driver for change and it was highlighted by all of the officer teams who provided advice to the Management Team. Waverley Members and officers have seen how this can work, as it is the approach being taken by Basingstoke and Deane.

However, there is a concern over the overall size and level of staffing resources in Waverley, and it is questionable whether Waverley has the capacity to operate in this way, across the whole of the Management Team.

Therefore, the Management Team has drawn the conclusion that this should not be the driver for change but should feature in the final solution with greater emphasis being given to the strategic function of the head of paid service in the new structure with the possible addition of a policy team.

Designing the Structure for Customer Service

Customer focused service is a clearly understood desire but there are concerns, in making this the only driver for change. It would require high start-up costs and significant change in our culture and, therefore, much effort to get buy-in from staff across the organisation.

In Surrey, Epsom and Ewell and, more recently, Surrey Heath, have invested in this approach. Waverley officers and Members saw what could be achieved from the visit to Chorley District Council where their driver was to move from a low CPA score. Officers and Members also had the chance to see that Daventry is currently investing in this approach.

The progress made by Chorley was evident but, again, it s the start-up costs that count against this option as the driving force.

Many of the elements of this option were, in the view of the Management Team, desirable ingredients of the proposed solution. It was felt that a customer service centre concept should be further investigated and that best practice in this area is considered in relation to Waverley. Regardless of the final option chosen, as a minimum, it is proposed to investigate whether the Godalming Reception and Ccash Ddesk should be converted to provide services as currently provided by the front desk staff in the locality offices. If the Council does decide to go down this route, the Management Team advice would be that the Council should appoint a professional customer services manager.

The Form Follows Function Tool

As a tried and tested tool, it has attractions. However, it does not measure well against the Terms of Reference as it is, potentially, the most disruptive option, as it cannot be done in stages. The conclusion is that it should not be the sole driver for change, especially in the context of Local Government Reform and local elections, as it carries the risk of having to start again.

Some elements of this approach could allow for affinities in service delivery to be grouped in any new departmental structure as appropriate.

Outsourcing/Partnering

Some, particularly large, authorities have gone down the route of outsourcing, in particular, support services to one single provider, with Lincolnshire County Council being an early example. Also, currently the LB of Hammersmith has signed a £120m 10 year deal to set up London’s first local government shared services centre from 1st October 2006.

At district Council level, known history is not, however, positive when looked at as a big issue. In Surrey, Tandridge District Council got very close to signing an outsourcing deal with an external provider for support services but the plug was pulled late in the day when it became clear that the differences between the external providers expectations and the Council’s expectations were too wide to close. As a partnering experiment, in Sussex, Adur and Worthing tried to merge the two authorities across a range of services but, at some significant expense, the partnership ended largely because the two organisations were culturally different which made agreements difficult to make. A more positive example of a current partnering arrangement is the East Surrey Cluster (Tandridge, Reigate & Banstead and Mole Valley). These authorities have signed an agreement that effectively says that if they want to work in partnership they will first consider partnering with other authorities in the cluster.

The team’s view is that Waverley has developed a “mixed economy” in relation to procurement issues, especially in relation to the private sector’s contribution to service delivery. It is not thought that there are further large-scale areas where outsourcing services can either provide operational efficiencies or financial savings. It is also noted that there are clear instances of outsourcing being discharged to our advantage by a

gradual shift to partnering and preferred trading partners. However, it is considered that there are still key areas of development to be achieved in partnering generally and particularly in partnering with other local authorities and agencies. For example, Waverley has entered into some such partnership arrangements and, for example is piloting using the Kent (County Council) Consortium to source office supplies.

It is also worth mentioning that, although the TUPE provisions are there to protect the interests of staff, the evidence is that there is the risk that this approach can generate high cost early retirement arrangements.

Transferable Common Components

Initial analysis of the 6 options indicates they overlap in terms of characteristics, features and style.

In addition there are a potential number of other common elements that should be considered as part of any new structure - that do not necessarily arise from the thematic structure options but are driven by corporate or service requirements. These are set out below:

Element	Driver[s]	Features
Corporate policy team	Best practice and Government requirements require demonstration of a robust corporate policy and planning process. Assessed through CPA and other inspection regimes	Long recognised we need to strengthen this area. Currently rely on 1FT officer supplemented by corporate volunteers from service departments when project demands. Capacity problems and potential restricted objectivity on strategic issues.
Information team	New legislation [e.g. FOI, data protection] + e-gov agenda [especially e-mails and web site] + need for data quality [e.g. in GIS and back office systems] all mean we should look at “Information” in a new co-ordinated light	Recent formal recognition that Information is an important asset, which drives the business of the Council. Coordinating our current activities will go some way but we also need to increase the resource in some areas – especially on improving quality of corporate databases and systems and the management of information.
Community development and partnership team	We rely on partnerships and the voluntary sector to deliver our social and economic agendas [s2 of the 2000 Act]. However this area of activity is becoming more important to meet the Government agenda e.g.: “neighbourhood engagement”, “integration and cohesion”, “Respect”, SNEN 101, & LSP work.	This continues to be done on an ad-hoc basis and relies on the exceptional skills of some staff. It maybe difficult to justify additional resources with all the other pressures, but setting up a new team of existing staff who work in these areas, with a broader brief, could lead to synergies and focused energy. [s106 benefits may help with capital funding]
Sustainable development	A central plank of Government policy. Only likely to increase in importance. Need to keep up with technological developments. So far done most of the “easy wins”…..	Need to go up a gear. Individual services now need to deliver. Concept not embedded. Need to develop a more relevant theme? E.g. most of this activity saves money either in the short term or longer term if adopt “whole life costing”. A new set of skills and location for this will be required.

Other Issues from the Terms of Reference

The agreed terms of reference indicated other issues that may be taken into account in the review process. Those issues have been considered and it is concluded that a variation on the more strategic option and the operational option detailed below is worthy of more consideration.

A schedule of the issues and an initial analysis of each is shown below.

· To examine how partnership working could deliver cost effectiveness

The advantages to Waverley through enhanced partnership working will be gleaned from the proposed new structure.

· To ensure, working through the Implementing Electronic Government (IEG) Group, that attention is given, across the board, to the service benefits that may flow from the e-Government agenda

The report proposes examining the benefits of a customer contact centre and of developing the Godalming cash desk into a locality office..

· The following issues will be key to the proposed new role of Managing Director

o To examine the impact of community partnership issues, including working with the LSP

o To deliver positive communication with the community

o To embed performance monitoring to support the drive for efficiency savings and create awareness of areas in which improvements could be achieved as well as ensuring the maintenance of a ‘good’ CPA rating

o To review the ‘corporate health’ performance indicators to identify areas for attention in order to deliver on targets.

o To consider where policy development and project management could fit into a new structure

· To acknowledge that IIP re-accreditation is required before the end of December 2006 and to be aware of the new IIP standards in developing the new structure.

In order to ensure that staff are kept fully informed about, and supportive of the review it will be necessary for the review to be implemented in stages as recommended in the report. The first stage will be the appointment of the Managing Director and departmental directors followed by the review of second tier staff.

At this time, the question of whether the top management structure should continue to have organisational responsibilities as at present or whether they should have more strategic responsibilities, as was seen at Basingstoke and Deane and indeed Daventry, has to be asked.

Summary Conclusion

It is, therefore, concluded that the best advantage to Waverley consists of support for senior management restructuring, the initial components of which are the appointment of a Managing Director and of three director heads of departments. As indicated in this report the team believe that no one option provides all of the answers.

In order to ensure that staff are kept fully informed about, and supportive of the review it will be necessary for the review to be implemented in stages as recommended in the report. The first stage should be the appointment of the Managing Director and departmental directors followed by the review of heads of service.

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