Transcript Transition to

Match Fit
Local Government Transition
to 2015
28 March 2014
© 2014 Deloitte LLP. Private and confidential.
Agenda
13:30
Mergers & Acquisitions – Observations on Change
•
13:40
Belfast Met’s Merger Experience – Lessons to Learn
•
13:55
Elaine Hartin, COO, Belfast Metropolitan College
Transfer of Functions – Due Diligence
•
14:10
Peter Allen, Director, Deloitte Corporate Finance
Alasdair Kilpatrick, Director, Deloitte Consulting
Policing & Community Safety Partnerships – Rationalisation and
Development
•
Ronnie Armour, Head of the Community Safety Unit, Department of Justice
14:30
Q&A Panel Discussion
15:00
Close
2
© 2014 Deloitte LLP. Private and confidential.
Mergers & Acquisitions
Title 3
© 2014 Deloitte LLP. Private and confidential.
Mergers & Acquisitions
Observations from the private sector
• Define the reason for the merger
• Create a strategy, capable of:
-
Simple communication
Effective implementation
• How will you measure success?
• The honeymoon period
• The importance of communication
- Internal
- External
4
© 2014 Deloitte LLP. Private and confidential.
Mergers & Acquisitions
Observations from the private sector
Where can it go wrong?
• Dominance of one partner
• Getting lost in the detail
• Communication
• Ownership and responsibility
5
Match Fit – Local Government Transition to 2015
© 2014 Deloitte LLP. Private and confidential.
Belfast Met’s Merger Experience
Elaine Hartin, Chief Operating Officer
Context
 FE Sector Mergers – from 16 regional colleges to 6 (2007)
 Belfast Met, the largest NI college and 6th largest in UK, was
formed from the merger of BIFHE & Castlereagh College.
 In 2009 it became clear that the College was in difficulty
 Parent Department, DEL, commissioned an Efficiency Review
(2009) - This found serious issues within the college, making 72
recommendations for improvement
 Following this, in late 2009/2010 a College Improvement Plan (CIP)
was developed
Context
Key issues within College in 2009/10:
 No Strategic Plan in place
 Significant cultural issues – staff still belonged to BIFHE &
Castlereagh
 Control frameworks had been eroded
 Gaps existed in processes
 Organisation structure and skills not aligned to business need –
management levels had grown through merger
 Significant financial issues
 Student success rates below 50%
 “No Confidence” rating from ETI
So what went wrong?
 Reasons many and multi- faceted
 My view on 3 of the key lessons learned …..
1. Understand the Starting
Point…..
 Understand Baseline Position (warts and all) – must be objective
 Complete Due Diligence and record outcome – good and bad
 Acknowledge where you are and ensure all stakeholders know this
and understand scale of task ahead – it will not be easy and tough
decisions will be required
 Build plans from this …. a clear foundation
“Crisis, What Crisis?”
2. …. Define Destination
 Set Vision, Values and Corporate Plan for new organisation early
 Create the new identity
 Give staff and stakeholders something they can own and create a
sense of belonging and ownership from the outset
 Communicate clearly and consistently
 Remain objective and focus on facts
3. Understand your Business
 Make sure Core Business is understood and how this fits within
wider strategic context
 What do you do now; what you will do in the future – short,
medium and long term
 Identify Services to be delivered (including standards/ quality
expectations)
 Identify funding streams and any known constraints/
efficiencies required
 Design Operating Model – for future not what has been in the
past
.. And the Result
2009/10
2012/13


3 year cumulative financial
position (2010/11 – 2012/13)
(£21m)
(£5m)*
2012/13 financial position
(£11m)
£0.2m
Audit Ratings
Limited
Satisfactory
Limited Confidence
Confident
Student Success Rate
43%
70%
Staffing levels
O/S
O/S
Clear Vision and Corporate Plan
ETI Rating
* Ex redundancy costs
Out of
Special
Measures
Transfer of Functions
Title 14
© 2014 Deloitte LLP. Private and confidential.
Transfer of functions and powers to Local Government
What we were asked to do

the scope of the functions and powers to transfer to local government and the associated legislative and policy
frameworks which underpin them;

definition of the existing operational arrangements for delivering the functions and powers transferring from
central government;

the direct and indirect financial costs, staffing and other resources deployed in support of these
functions and powers (including central support costs);

the assets and potential liabilities which will transfer to local government

the number, type and designation of staff currently deployed in the delivery / direct support of those
functions and powers to transfer to local government. Where staff budgets are allocated or apportioned to
functions transferring then verification of the reasonableness of the allocation/apportionment method needs to
be undertaken

the current operational arrangements for delivery of the functions transferring from central government to local
government, including resource allocation models or other mechanisms for resource prioritisation
15
Match Fit – Local Government Transition to 2015
© 2014 Deloitte LLP. Private and confidential.
Transfer of functions and powers to Local Government
Scope
• Off street car parking
• Local development planning, development control and enforcement
• Urban regeneration and community development
‒
‒
‒
‒
‒
Tackling disadvantage
Physical regeneration
Maintenance of Laganside assets
Community Support Programme
Community Investment Fund
• HMO registration and inspection
• Local economic development
• Local tourism
• Local water recreational facilities
• Armagh County Museum
• Donaghadee Harbour
16
© 2014 Deloitte LLP. Private and confidential.
Transfer of functions and powers to Local Government
Principles underpinning the transfer
• The transfer of functions and powers must be rates neutral at the point of
transfer
‒ Applies at an individual council level i.e. no Council will be worse off
‒ Where there is a surplus for a specific service, this will be used to reduce subsidy for
other services
• Funding will be provided by central government to make good any financial
deficit associated with the delivery of the function/service
• Funding will include the total cost of discharging the responsibility/providing the
service/maintaining the asset (whether budgeted for or not)
• Funding will be provided by central government for notional costs e.g.
IT/Legal/Procurement/Finance/HR/Accommodation
• Where there is a financial benefit to local government, no budget will transfer but
local government will retain the income
17
Match Fit – Local Government Transition to 2015
© 2014 Deloitte LLP. Private and confidential.
Transfer of functions and powers to Local Government
Issues
• Allocation of overall budget to individual Councils
• Setting a baseline date for transfer: needs to be set prior to
1 April 2015 for financial planning
• Accommodation and IT: need for strategic planning to
minimise overall costs to the public sector
• Compensation for loss of rating income e.g. off-street car
parks
• Notional costs: IT / Accommodation / procurement / legal /
finance / HR / advisory services
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Match Fit – Local Government Transition to 2015
© 2014 Deloitte LLP. Private and confidential.