Agenda item

Q1 Finance Monitoring for Business Change

That the Commission consider and comment on the relevant Business Change extracts detailed below taken from the Q1 Finance Report that went to Cabinet on 6th September 16.


The Commission considered the report of the Interim Service Director, Finance. The report set out the relevant Business Change extracts taken from the Q1 Finance Report that went to Cabinet on 6th September 2016.


The following points were raised in discussion:


a.         The costs related to the data centre had not been accounted for under one heading. Officers confirmed this was to clearly identify the difference between the one-off cost related to the move from Romney House and the ongoing revenue costs related to the Councils new ways of working.  Officers confirmed that the Business Case for this had not been robust and had therefore not calculated the ongoing costs associated with the move.


b.         Clarification sought regarding how the Medium Term Financial Plan (MTFP) had been measured. Officers confirmed that a three year budget framework had been set out at a specific moment in time and had not been revisited to update it with new information as it arose. There had been a number of assumptions made within ICT Services which had proved to be incorrect and had resulted in delivery failure. It was suggested that the October meeting should bring ICT managers from individual areas to provide the context and detail around this.  It was confirmed that an annual review of the MTFP would be conducted in future.

Action: Anna Klonowski


c.         Questions raised whether the council had achieved a) a revenue saving or b) a capital receipt in the release of Romney House, and questioned whether the sale of Romney House had been intended to support Bristol Workplace costs.  Officers to provide the background to the business case and an update report on Romney House current position.

Action: Anna Klonowski


d.         Business cases needed to be rigorously tested, and the impact of a decision assessed to ensure it joined up with the rest of the organisation, which had not appeared to be the case with the decision to release Romney House as a capital asset.


e.         The Mayor intended to commission a review of how the Council had got to its current financial position.


f.          The three year budget framework should be refreshed regularly and performance tracked.  The Programme Management Office should have the ability to track money and actions, attached to a risk register which could regularly investigate slippage in projects.


g.         Concern raised regarding the commissioning of third party services and the use of contractors. There appeared to be a lack of knowledge management and knowledge transfer to the Council, when contractors left the organisation.  Members were assured that the Interim Service Director for Business Change would leave a detailed handover to the team.


h.         Concern raised that the Vision HR contract renewal had been unanticipated.  Officers confirmed that they had needed to run a legacy payroll system alongside Vision HR for longer than anticipated in order to manage a risk of delivery failure.  An option appraisal was being carried out to consider other methods of delivery such as shared service arrangements, using another public sector organisation’s payroll system.


i.           There were currently 52 interims in ICT equating to one third to a half of the headcount and included interns and people with specific skills through agency providers.  Work was being carried out to understand how to reduce the number within restructure proposals. Contractors could be a viable decision for some programmes of activity. Where the governance was right, outsourcing could result in increased cost upfront but enabled the Council to manage time, cost and scope more effectively and have recourse to litigation in the event of contract failure. 


j.           The revised pipeline for change projects needed to be confirmed.  Officers confirmed that this was under review, accounting for normal replacement of systems on cyclical upgrades and digital programmes of activity to support and enable channel shift. The decision ultimately for the Council was whether to make or buy services.


k.         A member suggested that it was evidence of serious internal breakdown in governance that variations from the planned Change programme business case had added 12 projects without further contribution to ICT budgets being made.  Officers confirmed that the reasons for this were under investigation.  It was not clear why there was no year on year ICT budget.


l.           Officers confirmed that an immediate mitigation had been put in place which required that all ICT project requests had a fully structured business case and detailed where the budget was coming from.


m.      The approved Treasury Management Strategy involved an assessment of who the Council placed investments with, erring on the side of caution for average levels of return, and using a market approved Credit rating checking system.


n.         In highlighting the significant risks it was confirmed that risks around the capital cost of the Arena had been omitted in error. Officers to amend the risk for future reports.

Action : Anna Klonowski


o.         The Chair commented that the transparency in the Officer’s presentation of what had gone wrong to date had been helpful. It was suggested that the Commission or a Sub-Committee carry out a deeper investigation to get to the root of why and how Business Change had got it wrong. It was suggested that Members to carry out an in depth review of a few projects.  Members and Officers to confirm how this could be taken forward.


Action: Johanna Holmes/Anna Klonowski


(i)         To note the discussion points and progress the actions arising


(The Commission paused for a short recess)



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