Dealing with the cuts….making the best use of public spending to improve performance

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Introduction and welcome

Steve Mungavin, Head of CIPFA NI

IGNORANCE OF PUBLIC FINANCES IS NO DEFENCE AGAINST THEM…

Ian James ParsleyUltonia Communications

POLITICS

“It is possible to be interested in the politics of elections and in the politics of government and never have one impinge upon the other.

“In fact, it is increasingly the norm.”

Jason O’Mahony

STANDARD OF LIVING CONCEPT OF VALUE INHERENT PROBLEMS COMMUNICATIONS

Brief outline of

EXPERIENCE

• 16 years in business• 10 years in public affairs• 6 years as Local Councillor• 4 years as policy adviser• 2 years on public boards

Established Breakthrough NI in 2011

OUTPUT

78%Northern Ireland economic outputversus UK average, Eurostat 2013

EARNINGS

88%Northern Ireland average wageversus UK average, DETI 2014

INCOME

96%Northern Ireland median household income

versus UK average, DSD 2013

CONSUMPTION

104%Northern Ireland average household spending

versus UK average, ONS 2013

INTERPRETATION

TRANSFER MARKET

17%Correlation of club spending on transfers to

final Premier League position, 1997/8-2006/7

PLAYER WAGES

92%Correlation of club spending on player wages to final Premier League position, 1997/8-2006/7

SILOS

ENDOWMENT

• Concessionary fares (£43m)• Prescription charges (£7m-£31m)• Flood payments (various)• Rates freeze (£6m per 1%)

• Rates cap (£12m)• Public Sector pay increments (various)

• Water charges (£250m)

COMMUNICATIONS

Key distinctions:

• Reductions versus Cuts• Budget versus Spending• Government versus Public• Private versus Big Business• Expenditure versus Value

COMMUNICATIONS

Media Speak

• Cuts• Business• Government• Spending• Expenditure

Reality

• Reductions• Private• Public• Budget• Value

FINANCE

“I have done three things in my life of which I am extremely proud. I have been a father, I have lost weight, and I have been in charge of the nation’s finances.

“The key to all three is the same – you have to say ‘no’, and mean it.”

Nigel Lawson

We “create understanding”.

We run your campaigns, manage your relationships, establish your messages, and edit your documents.

We specialise in innovative courses on advocacy, media relations and language.

@UltoniaComms

/Ultonia-Communications

www.ultonia.com

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Avoiding knee-jerk savings:a strategic approach to public expenditure cuts in Northern Ireland

Stephen G MungavinHead of CIPFA Northern Ireland

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Aim of this session

To explore a longer-term approach to make the best use of public

expenditure

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Presentation structure

Context and overview Strategic approach – basic principles Strategic priorities Discussion – Q&A

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Context and overview

Nearly 10 years of ‘efficiency savings’

Non-ring fenced resource DEL reduces from £10,232.6M to £10,019.5M in 2015/16

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Ministerial Departments Base (£M)

Budget(£M)

%

Agriculture and Rural Development

197.6 187.3 -5.2%

Culture, Arts and Leisure 99.9 89.9 -10%

Education 1,943.7 1,849.7 -4.9%

Employment & Learning 756.2 674.4 -10.8%

Enterprise, Trade, Investment 184.2 194 +5.3%

Finance & Personnel 155.9 139 -10.9%

DHSS&PS 4,542.7 4,693.1 +3.3%

Environment 116.6 103.7 -11.1%

Justice 1,089 1,024 -6%

Regional Development 335.5 322 -4%

Social Development 653.9 589.1 -9.9%

OFMDFM 65.8 65.4 -0.6%

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Non- Ministerial Departments Base(£M)

Budget(£M)

%

Assembly Ombudsman 1.8 1.8 0%

Food Standards Agency 8.5 7.4 -12.8%

NI Assembly 40.7 40.7 0%

NI Audit Office 7.9 7.9 0%

Utility Regulator 0.1 0.1 0%

Public Prosecution Service 32.7 30.5 -10.9%

Total Planned spend 10,232.6 10,019.5 -2.1%

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The pain is going to get worse

“Looking ahead, Office for Budget Responsibility projections show that we can expect our Resource DEL to fall by a further 13% in real terms by 2019. So, in this year, and beyond, we will have a wide range of increasing demands placed upon our public services while we have fewer and fewer resources with which to meet that growing demand. It is a situation which demands that tough, sometimes even undesirable, choices be made”. DFP Minister November 2014

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Some fundamental principles

Prioritisation needed No ‘protection’ of services Manage public expectations Avoid political expediency Avoid duplication caused by the

legacy of conflict Identify ‘opportunity costs’ Reduce the accountability burden

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Strategic priorities Rebalance the relationship between the citizen and the

state Budget for the medium to long term, and invest

strategically to stimulate economic growth The structure of government and the public sector

needs to change to allow services to be provided more effectively and decisions on funding to be taken at the right level

Local public services must be better aligned to maintain delivery as budgets are cut further

Financial transparency and accountability are key to restoring public trust

The quality of state level financial management and governance demands urgent attention

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In summary

Don’t just rely on short-term gains Plan for next 5-10 years Manage public expectations Demonstrate leadership at all levels

Refreshment

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Dealing with the cuts – Cost reduction

16 December 2014

John O’Halloran CIPFA Senior Consultant

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Dealing with the cuts our Approach

Questions for you to answer: What is the scope in your organisation for finding

more savings?

Have you exhausted all the opportunities for generating more income?

Will your organisation be able to cope with more cuts, without drastic surgery?

Have you a long term plan?

Have the limits of your current approach been reached?

Will the new reforms e.g. Councils be cost effective – What areas can you focus on

Will it get any easier?

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Dealing with the cuts - process

STEP 1: INITIAL INTERVIEWS AND DOCUMENT REVIEW

Understanding the Context.

STEP 2: COST & INCOME DATA COLLECTION Collecting and comparing back-office and front-line services.

STEP 3: ANALYSIS AND FILTERING Evidence-based information for identifying areas for

improvement. Creating a long list of options, grouped into key themes. Workshops to “sanity check” and question opportunities.

STEP 4: PRACTICAL ASSESSMENT A more detailed assessment of functional operations to

highlight waste, duplication, and over engineered processes; how improvements will be achieved and the associated extent, feasibility and order of magnitude of the costs for the required changes.

STEP 5: SUMMARY REPORT Overall findings and recommendations.

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A look at overall service performance

High cost in libraries and sport, could this be reduced through

charging?

Taken from the CIPFA VfM Toolkit: www.cipfastats.net/vfmtoolkit

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A worked example (Service Level)

Lowest income per head in Cultural,

Environmental and Planning

Taken from the CIPFA Income Generation Comparative Profiles: www.cipfa.org/comparativeprofiles

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A worked example (Function Level)

Lowest again in Cultural Services

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A worked example (Activity Level)

Low levels of income across the

board

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Total Cost of Services and Cost per £’000 Organisation Running Costs

Service CouncilTotal Cost £’000

council Cost per £’000

Group Average Cost per £’000

Finance 633 62.71 26.25

ICT 1,063 105.28 44.49

Procurement 107 10.59 2.55

Communications

93 9.25 6.27

HR 221 21.88 16.24

Legal 265 26.50 12.58

Estates 318 80.68 33.84

* Estates is Cost/Sq Mtr.

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Total Cost as a percentage of Organisational Running Costs

Service Council %

Lower Quartile%

Median %

Upper Quartile%

Finance 6.30 1.80 2.20 2.70

ICT 10.50 2.10 3.10 5.20

Procurement 1.06 0.11 0.15 0.29

Communications 0.92 0.42 0.50 0.88

HR 2.19 1.13 1.52 1.85

Legal 2.72 0.86 0.92 1.78

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Estates - Total Property Costs per Square Metre GIA

Service Council £ Lower Quartile£

Median £ Upper Quartile £

Estates 296 103 140 152

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Total Cost of Difference

Service From Median £’000

From Lower Quartile £’000

Finance 407 450

ICT 753 851

Procurement 91 96

Communications 43 51

HR 67 107

Legal 181 183* Figure not available for Estates

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Summary of Potential Savings

Service Area Potential Saving £’000

Reduce number of Heads of Service 260

Reduce number of PAs 180

People & Policy 166

Additional cost re three areas above -100

Reduce number of middle managers 165

Performance and Risk Management 65

Procurement (Based on benchmarking)* 91

Communications (Based on benchmarking)* 43

Legal 13

ICT 200

Estates N/A

Total 1,083 exc Estates

* May be less depending on review of middle managers

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Dealing with the cuts – Our proposals Estate and Asset Management

Reducing costs in some of the larger elements of capital expenditure.

Modernise the Workforce

Improving productivity and reduce costs through changing both our ways of working and the way staff are paid.

Cessation of Discretionary Services

Reducing costs by stopping discretionary/low priority services.

Change Service Delivery Models

Reducing costs by changing the method of resourcing the work, using different form of organisation to deliver the work – such as outsourcing or social enterprise. 

Contract Management Options

Reducing costs by changing how WBC buys services and products and how it manages the fulfillment of those contracts to get best value.

Rationalise/Change Service Delivery

A mixture of opportunities to change the nature of the services provided and some aspects of the way they are delivered.

Income Generation

New opportunities to increase revenue income and to maximise existing sources of income.

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Savings – Costs/Benefits

44

Implementation – Time/Cost

Potential Benefit

Become an electronic council

Contract Monitoring

2014 Good HousekeepingCorporate Core Costs

2013 Good Housekeeping

Collect more Council Tax/NNDR

Festival ‘Fringe’

Energy Switch Facilitator

Festival Licencing

Charging for Sports Coaching

Licencing Changes

Housing Options Efficiencies

Cease operation of Open Air Lido

Bereavement Services

Ceasing operation of Community Access Points.

Non Statutory Charge Review

Advertisements on Website

Cease operation of Public Conveniences

Waste Collection Income

Knowledge Sharing

Development Control Pre Application Advice

Asset Commercial Partnership

Council Tax Increase

Economic Development Loans

Highway verges

Revised Enforcement

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Dealing with the cuts – An outcome

'We engaged CIPFA to take a detailed look at ways in which we could achieve further savings and identify options for income generation - in addition to the significant and difficult steps we had already taken as an authority.

The project used CIPFA's up to date benchmarking information as a platform for identifying real opportunities which we were able to take with confidence to both officers and elected members.

The final report produced by CIPFA's advisers outlines a host of recommendations for top areas of cost reduction and income generation, some of which had not previously been considered, which can genuinely be considered for implementation in the coming period.'

Lynton Green, Director of Finance and Information Services; Warrington Borough Council

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Dealing with the cuts – 'The CIPFA team have essential knowledge and experience of

the savings/income generation opportunities and the political landscape that is essential to the success of this review. The team members have a proven track record and have previously worked with Local Government and are aware of the sensitivities that surround the savings which need to be made.

Benchmarking has proven that the alternative supplier will cost a minimum of £40,000 plus a potential share of any savings. It is further understood that the alternative supplier also lacks the statistical data on the public sector and usually has to request such data from CIPFA.’

Briefing for Members by Director of Corporate Services

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QUESTIONS

Pauline French

A different model to achieve efficiencies16 Dec 2014

Local Government Context in 2014

“Our country faces enormous social, economic and demographic challenges: an aging population with longer term care needs; continuing unemployment combined with persistent skills shortages; rising inequality; and polarisation between communities with highly variable local economies and opportunities.”

“The financial context for our public services has changed fundamentally in recent years; all public services are being required to deliver with less resource.”

Local Government Innovation Taskforce, March 2014

2

OUR PEOPLE

OUR PLACE

OUR PROSPERITY

• Our population is getting bigger, more deprived, more complex and more diverse

• Croydon is a place of social and economic inequality

SO WHERE IS CROYDON?CROYDON BOROUGH PROFILE

Budget reductions – historic record over the last financial strategy

£15.79 £26.88 £22.32 £17.14

£0.00 £0.65 £1.19£0.88

£1.66 £3.22 £1.80 £2.96

CutsIncome generationEfficiencies

2010/11 2011/12 2012/13 2013/14

£21.02m £30.75m £25.31m £23.81m

1.07%Council tax increase

0%Council tax increase

0%Council tax increase

0%Council tax increase

Budget reduction Budget reduction Budget reduction Budget reduction

Staffing Numbers

December 2010 April 20140

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000 3,807

3,018

3,418

2,840

Overall HeadcountFull-time equivalents

-21% -17%

32

The challenge - 2015-18 - £104m 30% resource gap

Breakdown of the budget gap (£millions) By year…

Cost of capital; $15

Inflation; $25

Increased demand / growth; $15

Reduction in grant; $45

15/16 16/17 17/18

-40

-35

-30

-25

-20

-15

-10

-5

0

Cost of capitalInflationIncreased demand / growthReduction in grant

33

Outsourcing, the first solution used in Adult Social Care

Firstly in Residential and Nursing home careThen in Home Care (domiciliary Care)

Adult Social Care successfully saving money (avoiding the graph of doom)

• Clear managerial and political vision, clearly communicated to staff, customers and stakeholders

• Move away from paternalism, giving control to citizens

• Savings not seen as “cuts” but are a way of delivering improved outcomes at a lower cost

• Strong performance and project management in line managers developing and using KPIs

• Reducing the reliance upon residential and nursing home care

• Designing support so it is delivered at times of crisis and not for life

• Maximise telecare and telehealth• Review contracts, negotiate prices from a position of

understanding the business and the outcomes that are required.

On top of

CutsEfficiency

and Income Generation

The Local Authority Trading Company

Drivers

• Personalisation & empowerment – service users to develop a direct relationship, to be given money not direct services

• Ability to trade what were public services

• Efficiency reasons – reduce costs, generate surpluses, sell to others, leverage in the market, spread operating costs, and invest surplus back into public service

• Market disruption, efficiency gains for all partners

• Innovation

• Inform commissioning and specifications

• Satisfied both a Conservative and now Labour administration

Nature of a Local Authority Trading Company

• A local authority trading company is a ‘commercial ‘organisation with the ability to trade

• It has shareholdings, but the council holds 100% of the shares• An LATC can act as a business and offer its services to other social care

businesses (such as social enterprises and cooperatives), to other local authorities, to voluntary sector organisations or, indeed, to small private sector businesses. These dealings are undertaken on a commercial basis and without any subsidy or support from the Council

• It has a board of directors which make the major decisions • It can make a profit when dealing with other organisations. Any profit could be

reinvested into the new company to develop and improve the services it offers, and to ensure these remain competitively priced. The board of the company could also choose to pay a dividend to its shareholder, the Council, which could help to reduce the level of savings the Council has to make elsewhere

Procurement Law and LATCs• Broadly speaking a contracting authority in an EU member state must abide by

the EU Treaty principles of fairness, openness, non-discrimination and transparency (‘the Principles’)

• However, it has been established in EU procurement law that the open advertising and tendering rules for public contracts do not apply where a public body obtains services from ‘in-house’(arms length) sources. This is the so-called Teckal principle

• Two decisions, one made by the Court of Appeal in England and another made by the European Court of Justice, clarify how the Teckal principle operates, and remove any doubt as to whether the exemption applies to procurements in the UK

Teckal Exemptions• In Teckal, the ECJ held that a public body could bypass(comply but be

exempt from) the EU procurement rules and directly enter into a contract with a service provider so long as:

– the public body controls the service provider in question as if it was that public body's own department; and

– the service provider in question carries out the essential part of its activities with the contracting authority which controls that entity.

• This decision created what is now known as the Teckal exemption (Brent v RMP clarifies that the Teckal exemption does apply to public procurement in the UK)

The ‘Control Test’Exemption applies when a contracting authority exercises control over a wholly-owned entity that is ‘similar to the control it has over its own departments and the entity carries out the essential part of its activities for that authority’

The ‘control test’ can be satisfied even where the entity is set up by several authorities which have collective control of the entity. Collective control does not require all decision-making to be unanimous and allows the day-to-day management to be left to a board

Any private participation in the entity will prevent the Teckal exemption applying and authorities will be required to competitively tender any contract they intend to enter into with the entity

If a private company acquires even a small stake in the entity, any existing contracts awarded directly to the entity under the Teckal exemption may be found to breach procurement rules

The development of Croydon Care Solutions

• Began trading in March 2011• 100% owned by Croydon Council• Now have seven Local Authority partners• Turnover has increased from £6.5M in 12/13 to anticipated

£16M this year.• Partner Local Authorities are saving an average 30% in their

community equipment spend. • There for anyone to use, we are the Integrated Procurement

Hub for community equipment.• Innovated to deliver a new way of working with Learning

Disability, saving on life time service costs.

Delivering average 30% savings to partners as client base grows

2011/12 2012/13 2013/14 2014/15

actual spend 1.227 1.809 4.516 12.516

effciency saving 0.525857142857143 0.775285714285715 1.93542857142857 5.364

1

3

5

7

9

11

13

15

17

Equipment Services£m

Growth in business and demand, new partners and demographic

Market DisrupterSafe test ground

• Public service heritage• Commercial environment• Good employer

Lunch

PRIORITISING PUBLIC SERVICES

PRIORITISING PUBLIC SERVICESPOLICE SERVICE OF NORTHERN IRELAND

OF NORTHERN IRELAND

CIPFA PERFORMANCE SEMINAR

BELFAST

16 DECEMBER 2014

67

1. Background

2. PSNI Vision

3. Financial Overview

4. Current Financial Year (2014-15)

5. Next Financial Year (2015-16)

6. PSNI Impact

CONTENTS

68

1. BACKGROUND

• Patten Report – September 1999 – ‘A New Beginning: Policing in Northern Ireland’

• Policing per head population in NI – 3 times more than in GB• From 13,000 Police then to approx. 6,700 today, from 3,350 staff then

to approx. 2,300 today• 3,033 Police left through Patten Severance Scheme; 1,891 left through

natural wastage and 4,275 recruited (50:50)• Full-Time Reserve phased out, from 2,900• Policing Board established 4 November 2001• Annual Financial Statements prepared on a Cash Basis then• Alignment financial and operational decision making - devolved

budgets and appointed Business Services Support across the Organisation

69

CONTENTS

1. B

2. P

3. F

4. C

5. N

6. P

• £151m in savings in 6 years up to end of 2011, above target (Gershon Savings).

• Target savings £135m for year to 31 March 2015 (14.7% in real terms)• Focus maintaining and enhancing front line Police Service delivery and

driving out savings from support functions• Outsourcing – Catering, Cleaning, Uniforms, Custody Detention,

Property Management and Maintenance, IT, Police and Civilian Recruitment, Vehicle Recovery, Internal Audit

• Achieved 30% Catholic Representation within 10 years • Devolution Policing Justice to Northern Ireland took place on 12 April

2010.

Background continued…

70

2. PSNI VISION

The Police Service

DetectProtectPrevent

Collaborative Decision Making

Courtesy & Respect

Accountability Policing With the Community

Keeping People Safe

To help build a Confident, Safe & Peaceful Society

71

Public Spending - Crime & Policing represents <1% of total spend

Source - Guardian

3. FINANCIAL OVERVIEW

72

NI BLOCK…

73

NI Block: 2014-15…

• Significant Resource DEL pressures

• Reductions of 2.1% agreed in June Monitoring

• Protection for Health & Education

• Welfare Reform penalty of £87m unaddressed

• Further reductions of 2.3% in October Monitoring Round

• Impact on public services

74

PSNI Resource ExpenditureAn analysis of the planned resource expenditure for 2013/14 is shown in the chart below:

75

4. CURRENT FINANCIAL YEAR (2014-15)

Overview of Police Budget

2014/15

£m

%

Pay related costs 640 80 Non Pay costs 165 20 Total Expenditure

805

100

76

2014/15

£m

Transport 15 Accommodation 43 Telecoms & Tech 38 Travel & Sub 7 Supplies, Catering & Pubs 13 Incidentals* 49 Total Non Pay costs

165

Analysis of non pay costs

CURRENT FINANCIAL YEAR (2014-15)

77

– Budget cut 1.5% [May]

– Plan for a 2.5% & 2.9% cut [June]

– Plan for a 3%, 4% & 5% cut [July]

– Plan for 4.4% [August]

– Budget cut 7.0% [September]

– Additional funding 1.8% (£13m) [October]

5.2% = £38.4m

CURRENT FINANCIAL YEAR (2014-15)

78

PSNI: 2014-15…

Chief Constable set 3 key principles to guide resourcing allocations:

– Principle 1: The PSNI is committed to keeping people safe today, whilst acknowledging

statutory responsibilities to investigate the past.

– Principle 2: The PSNI is committed to maintain operational capacity and capability, with officer numbers

(6,963) reflecting the findings of the Resilience Review.

– Principle 3: The PSNI is committed to delivering a sustained reduction in baseline spending by continuing

to invest in enabling technology and processes.

79

Process for Cost Reductions

INTERNAL

• Annual Intergrated Planning Process

• Finance Delivery Group

• Capital and Overtime Working Group

• ServiceFirst Board

• Resource Assurance and Challenge Session (Star Chamber)

• Scenario planning for 2015/16 – 10% and 15% cuts and different police recruitment numbers

EXTERNAL

• Northern Ireland Policing Board

• Department of Justice

80

PSNI: 2014-15…Target DPC OSD COP inc HET SID Corp Comms Legal Com Sec HR EBS Pol Snr Mgt FSSD Other TOTAL

Local InitiativeHospitalityTrainingOther Staff Substitution Legacy Staff SubstitutionPolice Overtime General Support

Incidental ExpensesTransport Costs

Accommodation ServicesSupplies, Catering & Publications

Telecomms & TechnologyTravel & SubManaged Service FSSD Specific SavingsPolice Staff RecruitmentPolice Staff OvertimeTransport Police Officer RecruitmentGrantsPension Opt-OutsPOPTPTSDTotal 36,100,000

81

5. NEXT FINANCIAL YEAR (2015-16)

– 1 year only

– Plan for 2.8%, 5.1% & 7.8% [August]

– Plan for 14.0% [September]

– Plan for 10% & 15% (£120m) [September]

– Plan for 8.6% [November]

8.6% = £60m

82

PSNI: 2015-16… £mSUMMARY Estimated Resource Requirement 687.9 Draft Budget Allocated (8.6%) 644.4 Initial GAP 43.5

PROCESS TO DATE £m Reductions Police Overtime agreed at Staff Overtime Finance Delivery Transport Group Estates Telecom and Technology Travel and Subsistence Supplies Incidentials Income Staff Recruitment 24.4 Star Chamber 4.2 Latest Gap 14.9

83

4 MAIN SCENARIOS

1. 10% Cut and Minimum Recruitment (100 Officers) GAP £53.6m

2. 15% Cut and Minimum Recruitment (100 Officers) GAP £88.9m

3. 10% Cut and Necessary Recruitment (Maintain 7,000 Officers) GAP £65.1m

4. 15% Cut and Necessary Recruitment (Maintain 7,000 Officers) GAP £100.6m

IMPACT OF CUTS UNDER EACH SCENARIO

84

6. PSNI: IMPACT/IMPLICATIONS

IMPACT:

• Fewer Police Officers and Staff

• Fewer Support Workers

• Reduction in Overtime

• Reduction in Support and Enabling exits

IMPLICATIONS:

• ServiceFirst Programme – Re-organisation of Local Government, Centralisation of Support functions – Change Management Process

• Harder choices

• Focus on present not past

• Managing greater risk

• Less responsive; more reactive service

• Focus on serious risk & harm

• Greater flexibility

85

END

86

Northern Ireland Audit Office

Value for Money audits in the public sector:

Improvement through Oversight

Sean McKay

Director

Value for Money Division

Chief Local Govt. Auditor

Audits of26 District Councils

COMPTROLLER & AUDITOR GENERAL

AAG AAG AAG

Financial AuditCertification of

Accounts

Value for Money AuditReports on:Economy

Efficiency andEffectiveness ofPublic Spending

(20 Staff) (65 staff) (35 staff) (25 staff)

Budget: £8 million

Northern Ireland Audit OfficeMISSION:1. To provide objective information, advice and assurance on

the use of public funds2. To encourage:

Beneficial change in the provision of public services; The highest standards in financial management and

reporting; and Propriety in the conduct of public business.

LEGISLATION:The Audit (Northern Ireland) Order 1987The Northern Ireland Act 1998The Government Resources and Accounts Act (NI) 2001The Audit and Accountability (NI) Order 2003.

Importance of C&AG’s Independence

What is a Value for Money Study

An objective, systematic examination of evidence

Makes recommendations to decision-makers and to enhance public accountability

Distinct from financial audits, which express opinions on financial statements

Conducted in accordance with standards.

Financial audit—‘how much’ Performance audit—‘how well’

~12 reports each year, ~try to work to a 12 months turn-around

Wide powers of access and examination Effectiveness, efficiency, economy Extensive planning and consultation Cannot question the merits of policy.

Potential Impacts

Relevant and informing

Encourage learning/enhancing decision making

Improving government with recommendations

Identify Financial Savings

Showing a “footprint” of change and the value of audit

Improve Public Confidence/Governance

How are VFM topics chosen?

Issues Arising from Financial Audit

Assembly Members or PAC Interests

Media or Public Interest

Identifying and Spreading Good Practice

Environment scanning –Marking/Survey

Audit—more important than ever Pressures:

Current austerity agenda→ public sector doing the same with fewer resources.

Comptroller and Auditor-General is the principal source of independent information on the performance of the public sector to the Assembly and the public.

Audits go beyond assurance C&AG’s focus—‘making a difference’.

How do we make this difference in these times?

Financial Management and Efficiency

Don’t like to worry you but....

total real terms change in funding over 2011-2015 period ranges from - 9.1% (DSD) to - 20% (DRD)

freeze on public sector pay, pensions changes etc 2010/15 to be the tightest 5 year period for

government spending since (at least) WWII

Primary Care Prescribing

GP prescribing - efficiency savings of £132 million in the four years to 2013-14

Cost of prescribing has fallen by 18 per cent in real terms since 2006

Volume of prescriptions has risen significantly - from 23 million items in 2000 to almost 39 million in 2013

November 2014

Primary Care PrescribingHowever:

If the prescribing costs of local GPs had been in line with those in Wales in 2013 there was potential to save up to £73 million

Potential savings of £19 million if all GPs had prescribed as efficiently as those in the average performing practice

Scope for further savings of £54 million over a three year period

Use of Locum Doctors

April 2007 to 31 March 2011 £109 million was paid to cover short term absences or vacancies within hospitals

Around £74 million paid to external recruitment agencies £35 million paid to doctors employed by Trusts but

working hours additional to those stated in their contract We estimate that by containing locum costs to the

regional average of 8 per cent - over £5 million might be saved each year.

Substitution Cover for Teachers: Follow-up Report

Cost of substitutes covering for teacher absences had increased significantly – up in real terms by 40 per cent since 2000-01, to over £66 million in 2008-09

Impact on learning/attainment The management of teacher absence and substitution cover are areas where there improvement and savings are now starting to be realised.

May 2010

Improving Pupil Attendance

School absence rates equated to around 9 days missed per pupil at primary school and 13 days non-attendance per pupil at post-primary school in 2011-12

In 2011-12, pupils absent from school for no reason forfeited the opportunity of around £22 million worth of education  

More than 80 per cent of cases of persistent absenteeism not referred to the EWS

Outcomes and Quality

Translating public money into high-quality services and outcomes for citizens depends on the capability of public entities

Organisational culture matters and needs to be carefully fostered

Patient Safety

Reducing adverse incidents that cause, or could have caused, unexpected harm to patients and clients is a core task for DHSSPS and HSC Trusts.  

Two factors are crucial to this:

the establishment of a culture in which incidents can be reported easily, honestly and without fear of blame; and

the ability to ensure that lessons learned from these incidents are successfully taken on board by HSC staff.

Patient Safety

Approximately 83,000 adverse incidents are reported each year by HSC organisations   causes distress to patients, relatives and front-line staff

In the five years covered in the report, DHSSPS had paid out £116 million to settle claims for clinical and social care negligence – £77 million in compensation and £39 million in legal and administrative costs.

Further £136 million estimated to meet the compensation costs of all the active negligence claims currently in the system.

Patient Safety

Significant moves to raise awareness among HSC Trusts of the need to ensure more openness and honesty when things go wrong.

However, there continues to be under-reporting, particularly within hospitals.

More needs to be done to ensure an open culture and to encourage the reporting of adverse incidents or near-misses as a mechanism for learning lessons and driving improvements.  

Literacy and Numeracy Achievement Wide gap between the highest and lowest achieving children

continues to be challenging; Strong correlation between low levels of academic achievement

and free school meal Only 31.7% of pupils entitled to free school meals in 2010-11 achieved the expected level at GCSE compared to 65.1% of pupils not entitled to free school meals;

Social deprivation appears to have a greater negative impact on achievement levels in controlled (mainly Protestant) schools than in their maintained (mainly Catholic) counterparts; and

Outcomes for boys are worse than those for girls at almost all levels.

Literacy and Numeracy Achievement Effective school leadership vital role to play in

addressing under-performing schools Key role played by families in assisting children with

literacy and numeracy progression Identifying and sharing practices Sharing of data by the Department and its use by

the schools Data not always used in a timely and effective way

across all schools and sectors  

Probity in Procurement

Lack of attention to probity will

undermine accountability and public

trust in the government and the

services procured.

DCAL Capital Projects

Most of the construction work did not go according to plan

Delays and cost overruns which resulted in all seven projects needing additional funding

Ulster Museum, Lyric Theatre, Metropolitan Arts Centre, Public Record Office of Northern Ireland,  Crescent Arts Centre and Tollymore National Outdoor Centre

DCAL Capital Projects

Basic tender documentation not available Not possible to provide assurance that the award of

the contract worth £10.9 million was in line with best practice nor that there was proper scrutiny of the tender process by the Department or its agents.  

Greater care needs to be taken to ensure that probity is maintained in the contracting process and that decisions are well documented and able to be audited

Working together to make a difference Make our reports & insights more accessible and relevant

Maximise our findings through presentations at conferences/attendance

at public sector forums

Developing a range of communications channels (e.g. Website etc.)

Sharing our knowledge through new kinds of products e.g. better

practice guides, information pieces, key audit themes

Engaging better with the media

Improving the relevance of our topics by consulting with wide range of

stakeholders

Refreshment Break

Chair’s close