Wednesday, June 22, 2011

How public service organisations can save a colossal amount of money without cutting front line services

The following is a speech I gave to the East Riding of Yorkshire Council meeting this afternoon.

Public Service Organisations all working from separate buildings is not the best use of public money, and much could be saved if buildings were to be shared – this is termed ‘Asset Rationalisation’.

Asset rationalisation is all about money, lots and lots of it. Not what it will cost but how much it will save. It’s a way of not just the Council but other public service providers saving significant amounts of money without cutting frontline services – but for it to work requires a major shift of thinking, and herein lays the problem, the thinking within the public sector must change. We must move away from protectionism and look more towards sharing; we must move away from regionalisation and move more towards localism.

Do Public Service providers making the best use of their assets? I would suggest not, and for one simple reason – there is almost no sharing of assets. Why, because there is not sufficient will or desire amongst the providers to break out of their individual silos.

Taking the asset values of just two of the Public Sector organisations in the area - the Council and the Fire service. Then Council’s assets are in the region of £1.4 billion of which some £750million is accounted for in land and buildings, £439millon in Council housing and £180million in roads, bridges and coastal protection. Humberside Fire and Rescue have building assets worth some £13.6million, the Police, NHS, probation, and other partner assets are in addition to this - A colossal amount of money.

I suggest there would be significant savings if we were to share buildings, particularly between the ‘Blue Light’ services. We have 12 Fire Stations and 14 Police Stations strategically placed covering the East Riding with over 80% in the same village or town.

Would it not make sense for Police and Fire to come together and either share existing buildings, allowing the surplus buildings and land to be sold, or sell off both existing sites and use the proceeds to construct a purpose built facility in the area?

BUT let’s take it one step further - There happen to be 14 East Riding of Yorkshire Council customer service centres located strategically across the East Riding which mirror almost exactly the Fire and Police Stations. Would it not make sense to consider relocating these into the shared buildings?

Let’s go one step further and have the NHS Paramedics move in too.

So where would the savings be? Firstly the obvious cash from the sales of assets, but then the on-going savings in heating, lighting, power, water, insurance, cleaning, catering, telephones, not to mention backroom staff, but what about pooling and maintenance of vehicles and equipment, and the favourite expenditure… I.T !

If we look at just the ‘Blue light’ Services – imagine the efficiencies if they were all based at the same place, working together as a fully integrated team.

So if we had multi-agency, multi-service centres strategically placed across the East Riding – the logical step would be to devolve power and decision making to these areas – and that would be localism, would it not?

The key to making asset rationalisation work is changing the mind-set, elected Councillors make up the Fire Authority, are by far the largest part of the Police Authority, and will have an increasing role in the Health service. Councillors do have a role in setting the strategic direction of partner organisations. To really make asset rationalisation work I’m absolutely certain members can play more of a pivotal role in setting the strategic direction of the public service providers in this area – and I urge them to do so.


council tax payer said...

The theory is appealing but I fear the actual execution would suffer from squabbling and infighting between the sharing parties once the unification had taken place. Add to this the runaway cost of adapting the original buildings and don't even get started on what would happen to fiscal management of building new ones. Council officers have fantastic talents for finding "essential" things to squander money on and this would be no exception.
Like most other money saving projects it would be hijacked and end up consuming much much more than the present flawed system.

Paul Robinson said...

Thank you for the comment 'Council Tax Payer' - but I do think you've missed the point somewhat. It is very easy to come up with excuses and reasons why not - the real drivers are those who find the reasons why and ways to do it.

As I said in the original post it's the mind-set that has to change "we must move away from protectionism and look more towards sharing".

I'm afraid I have no evidence to indicate 'runaway costs of adapting buildings' would be a barrier or would exist in any significant form - why should they? As for fiscal management of constructing new buildings - the public sector have been doing this individually for years so I can't see a significant problem here.

Yes, some Council officers across the country have been guilty of coming up with expensive ideas – but the thought processes have now changed with the reduction in funding to local authorities. Certainly in the East Riding, over the past two years we have seen officers coming up with some really fantastic ideas of how to save money – which is obviously one of the reasons that as an authority we are better placed then almost all to weather the reduction in funding without cutting front line services.

Not sure why you think the concept would be be hijacked, or by whom?

council tax payer said...

I appreciate you are dedicated and have every good intention Paul. However we are talking about the East Riding of Yorkshire Council who thought it right and proper to throw away taxpayers money on voluntarily topping up a pension pot and a fire service doing its level best to catch up in the same stakes!
As to building costs - every time the council use their "selected" contractors we are paying significantly over the odds for a supply or service available from non selected contractors.

John in Gilberdyke said...

I can see the potential merits of unified stations for Fire, Police and Ambulance but the problem is going to be in reconciling the needs of each.
The police force presently seems to be hell bent on having a new station in Hull at umpteen million pounds Why stop there. Put the proposal on hold and examine the detail of adding fire and ambulance to this. It may be that the location is wrong for the additional two services so stop and go back to the drawing board to find a better mutual interest location.
While about it could the police station have better links to the Prison service? Both contain custody facilities.
A sea change of thinking is needed but I am completely in agreement with council tax payer that the risk of money being squandered is high. Such a project must be costed closely and execute with an iron hand on the budget so it comes in on target not with overspends everywhere you look.