Download Invest to Transform Fund Investment Proposals

Agenda Item No.
HERTFORDSHIRE COUNTY COUNCIL
CABINET
MONDAY, 23 APRIL 2012 AT 2.00PM
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INVEST TO TRANSFORM FUND INVESTMENT PROPOSALS
Report of the Director Resources & Performance
Authors:
Claire Cook, Assistant Director Finance (Tel: 01992 555737)
Iain MacBeath, Assistant Director Performance & Business
Support (Tel: 01992 556363)
Peter Maguire, Head of Procurement (Tel: 01992 588830)
Executive Members: David Lloyd, Resources and Economic Wellbeing
Colette Wyatt-Lowe, Health and Adult Care
1.
Purpose of Report
1.1
To enable Cabinet to decide whether to approve the investment proposals set
out in section 5 of the report from the Invest to Transform Fund (ITT).
2.
Summary
2.1
As part of the Integrated Plan Proposals (IPP) in February 2010, the County
Council created an Invest to Transform Fund of £4.5 million to provide the
capacity to invest in programmes which would release efficiency savings. This is
in the context of the significant financial challenges facing the Authority. The
fund currently totals £10.9 million, taking account of the transfer of £8 million of
the 2010/11 underspend into the fund.
2.2
This report provides details of two investment business cases:


Learning Disability Demography
Procurement Negotiator
2.3
A number of projects to reduce the average cost of existing care packages for
people with learning disabilities whilst maintaining or improving quality are
already in place within the IPP. These include negotiations with care providers
and moving people into more suitable accommodation.
2.4
A new programme is in train to reduce the average costs of new packages in the
future, thus significantly reducing the demography bid for learning disabilities.
The programme, which requires investment of £340k, is projected to contain
demography by up to £4m by 2014/15; this links to the corporate priorities of
‘maximising independent living’, ‘being a leading council’ and improving best
value.
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2.5
The programme has a detailed plan with projects to deliver:

newly commissioned ‘progressive’ services helping people move on from
their current accommodation safely;

better information and advice services for people with autism and
Asperger’s rather than creating dependence through care packages; and

dedicated finance resource within learning disability (LD) teams to
examine new care packages with providers and ensure best value.
2.6
A bid to fund Procurement Negotiator services of £250k was made from the ITT
fund in 2010 to initiate a programme to transfer skills and to develop negotiation
strategies on major procurements. The investment to date of £134k has
supported the delivery of savings of £1.8 million across the Authority.
2.7
The focus for the work going forward needs to change; in particular the need for
support for negotiation and contract/project skills in the ‘care’ areas, to support
the development of effective management information and reporting systems,
and to continue to assist in negotiations on the wider supplier base. The
investment of £190k is estimated to support the delivery of savings of £1.6 million
as well as enhancing contract management and negotiation skills within the
Authority.
3.
Recommendations
3.1
The Policy, Resources & Performance Cabinet Panel will be considering a report
on this item of business at its meeting on 18 April 2012. The recommendation
being made to the Panel is that:“The Panel considers the information in the report and recommends that Cabinet
approves the proposed investments from the Invest to Transform Fund set out in
section 5 of the report.”
3.2
The Panel’s recommendations will be reported orally at the meeting and
circulated to Members in the Order Sheet.
4.
Background
4.1
The Invest to Transform (ITT) Fund is a specific earmarked reserve set aside to
support innovative projects across Hertfordshire County Council that will
underpin service transformation and deliver future efficiencies.
4.2
In view of the financial challenges facing the Council in the short to medium-term,
the Fund was launched in 2010 to help meet the challenge of delivering cashreleasing efficiency targets.
4.3
The objective of the Invest to Transform Fund is to invest for Council-wide
projects to:
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 improve the cost effectiveness and value for money of services;
 deliver quantifiable improvements in performance; and
 achieve long-term savings and efficiencies.
4.4
Bids are considered by departmental management boards and the Strategic
Management Board. The Director Resources & Performance, in consultation
with the Executive Member for Resources & Economic Well-being, has delegated
authority to approve all bids below £150,000. All bids above this level, or where
the payback is in excess of 3 years, are approved by Cabinet.
4.5
The uncommitted reserve is currently £10.9 million, taking account of the
investment of up to £1.5m to support the Transformation of Day Opportunities
provided by Hertfordshire Partnership NHS Foundation Trust, agreed at the
Cabinet meeting of 20 February 2012, the investment of £0.736M to support the
proposals in relation to Supervised Contact Services for Children Looked After
agreed at the Cabinet meeting of 19 March 2012 and others agreed by the
Director Resources & Performance in accordance with his delegated authority.
4.6
This report concerns business cases for:


Learning Disability Demography - £340k
Procurement Negotiator - £190k
The investment from County Council funds is in excess of £150,000 and is,
therefore, to be presented to Cabinet for Member consideration and approval.
5.
Investment Business Cases
5.1
Learning Disability Demography Programme
5.1.1 The County Council supports 2,520 people with learning disabilities to live at
home with parents or in their own home. 780 more people are tenants of
‘supported living’ which provides 24hr care to those who are not able to live alone
in the community (increased by a further 80 placements in 2010/11). Day
services, respite care and direct payments are also offered to people who have
eligible care needs through personal budgets.
5.1.2 Without action, demography for Learning Disability services is estimated to
significantly add to the budget across the next financial years. This plan aims to
reduce average costs of care packages in future years to contain them within the
reduced demography pressures already included within the Integrated Plan.
Without this it is estimated that the pressures would increase to over £17million
as set out in the table below:
Gross pressures
Savings assumed
Net pressures (as set
out in the IPP)
2012/13
2013/14
2014/15
£’000
£’000
£’000
5,267
11,467
17,067
-600
-1,800
-4,000
5,267
9,667
14,067
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5.1.3 The key areas of the plan to address this include:

improvement to Strategic Commissioning of Services including the development
of more innovative ‘progressive’ packages of support;

strengthening processes around agreement of new packages to ensure that care
providers demonstrate value for money;

targeting of new demography growth areas like diagnosis of autism and
Asperger’s Syndrome with information, advice and sign-posting rather than
creating dependence on traditional care packages; and a

review of the existing LD staff structures to ensure that they provide capacity for
the team to review and change existing care packages to maintain or improve
outcomes for people whilst reducing the costs of existing packages and to
mitigate against future increases.
5.1.4 The costs of implementation relate to additional project management and other
staffing resource to increase capacity is estimated to total £340k as follows;
Project management
and staffing resource
5.2
2012/13
2013/14
2014/15
Total
£’000
£’000
£’000
£’000
245
95
0
340
Procurement Negotiator
5.2.1 A wide range of the Council’s services are provided by contractors working on
the Council’s behalf. The Authority’s annual spend on contract arrangements is c.
£800 million per annum and there is an ongoing need to ensure that the Council
gets best value from such arrangements. The investment of £134k made to date
with the Procurement Negotiator has supported the delivery of savings of £1.8
million as well as enabling project teams on major procurements (such as Shared
Managed Services, and Energy from Waste) to develop both negotiation skills
and negotiation strategies – transferring “how to” knowledge.
5.2.2 The focus on the work going forward needs to shift to:

supporting Health and Community Services (HCS) to build a sustainable
market and improve service choice and delivery in the context of the move
to eMarketplace;

supporting HCS to develop an effective programme of workforce
development to help deliver cost/price reductions and help to negotiate
additional benefits with home care providers / suppliers;

improve information and understanding of market through the
development and provision of contract management tools; and
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
continue to assist with negotiations with the wider supplier base including
Care Service providers.
5.2.3 The project would be delivered through a Senior Strategic Procurement resource,
which has both procurement and commissioning knowledge and negotiation
skills to lead on projects to deliver savings alongside an external training partner
to provide specific negotiation training and development. The projected costs
and savings from this investment are set out in the table below.
Gross Savings
Procurement Negotiator costs
Net savings
12/13 13/14 14/15 Total
£’000
£’000 £’000
£’000
(550)
(500) (500) (1,550)
190
(190)
(360)
(500) (500) (1,360)
6.
Financial Implications
6.1
The financial implications of the proposals set out in the report are summarised in
the table below. The overall balance remaining on the fund following the
business cases set out in section 5 of this report would be £10.462 million at the
end of 2012/13. This would be available for investment in further cash releasing
efficiencies.
ITT Fund
Balance of Fund b/f
Existing schemes
Fund available for use
Less proposed investments:
LD Demography Programme
Procurement Negotiator
Balance of Fund c/f
2012/13
£’000
14,018
(3,121)
10,897
2013/14
£’000
10,462
3,378
13,840
2014/15
£’000
13,745
250
13,995
(245)
(190)
(435)
(95)
(95)
-
10,462
13,745
13,995
Background Information
County Council Integrated Plan 2010/11 to 2013/14, Agenda Item 7, 23 February
2010
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