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Suffolk County Council: doubts about ability to control back office spending

While the early announcement of proposals to cut £50m from Suffolk County Council spending in the coming two years is welcome it also provides hints about where some problems lie, among them getting the costs of back office services under control.

The purpose is to allow for consultation. The bullet points are:

  • Council-wide efficiency savings (1.5% per year across all departments) – £15m
  • Early intervention, coordination and streamlining adult social care – £15m
  • Reducing the cost of our back office – £6.5m
  • Early intervention and more integrated teams in children and young people’s services – £3.5m
  • Re-letting the council’s highways management contract – £2m
  • Reducing the amount of senior management – £2m
  • Reducing/rationalising office accommodation – £2m
  • Savings from better purchasing of services – £1.5m
  • Saving money on waste management – £1m.

Over the next few weeks a series of consultation meetings are being held. The press release is here.

But it is hard to see how some of these savings can be made without an effect on front line services. Cutting £15m from adult social care, for example, looks difficult.

The Ipswich Spy blog, an an excellent post,  suggests spending on the CSD joint venture with BT which provides many of the back office services has still not been tackled. The Spy says:

Unless Suffolk County Council improves its corporate response to overseeing contracts, not only will it fail to make the savings it has indicated, it will have to make savings to the front line to pay for the failure to properly control spending in the back office.

The best value evaluation of three models for future library services (in-house, county owned company, or a co-operative (Industrial and Provident Society) hints at these problems.

Last week, the cabinet whose the IPS model and the report says:

Models one and two [in-house and council owned company] assume that CSD services will continue to be provided at the same level and cost as currently. For the IPS model, it is prudently assumed that the current costs for HR and Finance (currently charged by CSD) will remain at the same level, with the IPS having the freedom to decide how to use this budget, including the possibility to employ an HR advisor within the IPS. ICT costs within the IPS have been estimated at approximately 4% of the organisation’s turnover. This is in line with industry benchmarks, and represents a lower cost than the current CSD ICT
provision.

A few pages further on the report says:

One of the major areas of savings identified in the financial modelling is the reduction in the level corporate overheads which are attributable the IPS library model. It is important to recognise that these overhead costs are the responsibility of Suffolk County Council, and will need to be managed downwards if genuine cash savings are to be realised. The 2012/13 and 2013/14 County Council budget will address this.

Put those two paragraphs together and they appear to suggests no reduction in the cost of the CSD contract relating to libraries is being envisaged. But the IPS would not need to buy them so so the apparent by the independent library service could be illusory.

It is all very confusing. But it is the first time I have seen an admission that CSD is not delivering value for money.

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