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Case Study: Local Government

London Local
Authority

Appointed Interim Executive Director of Change

Background

  • This London local Authority spends approximately £300m net per year on non-education-related areas and employs 4500 non-school staff.
  • As one of the few Local Authorities in the UK with an elected Mayor, every major decision, particularly funds allocation, has an overt political dimension
  • As a direct consequence, a strategy was agreed that involved redistributing funds within the organisation, reducing expenditure and increasing productivity in some areas so that the funds released could be spent on issues with a higher priority for the residents
  • The Local Authority set the cost reduction target at £57 million over a 3-year period, but without any in-house capability to deliver such a programme the organisation decided to engage private sector restructuring expertise
  • Kingsgate was engaged to lead the initiative after completion of a competitive tendering exercise

Five stage approach

  • Cost reduction programme – Kingsgate designed and implemented a £70 million cost reduction and change programme which involved reduction of 1,000 and significant changes to the organisation’s operations.
  • Key Performance Indicators – Improved productivity in street cleansing and refuse collection by over 30% by ensuring that a small number of KPIS were clear, agreed and owned from the top of the organisation and to the bottom. We also worked with the management team to fundamentally change terms and conditions so that the service could be more flexible. We focussed on also improved working practises and developed a more focused management culture.
  • Shareholders – The political interface was key. We managed this very closely to ensure buy-in to a major change programme and some difficult decisions.
  • Interface with board – Steve Swayne fulfilled a board role as an interim and ensured board commitment with a very large and complex change programme. Steve also ensured that all directors were held to account and delivered their savings.
  • Culture Change – Kingsgate dramatically improved performance management within the organisation by delivering an effective performance and appraisal system. We also stream-lined HR practices and procedures with particular focus on weak performance and sickness. We also reduced the layers of management within the organisation and centralised were appropriate to speed decision making and reduce bureaucracy.

Kingsgate’s strategy

The Kingsgate team constructed a cost reduction programme based on 4 key areas:

  • People
  • Processes
  • Property
  • Procurement

By improving processes, aligning HR practices with those prevalent in the commercial sector, reconfiguring the back office and thinning out the organisational structure, it was possible to substantially reduce costs while maintaining service levels.

Results

  • Delivered £70 million cost reduction and change programme involving reduction of 1,000 posts
  • Reconfiguration of back office, moving 2500 staff from 28 buildings into one
  • Moved significant customer volumes to web-based services
  • Remodelled social care provision away from in-house and reactive to community-based and preventative
  • Received Institute For Turnaround Judges’ Commendation for Public Sector Turnaround of the Year Award 2011