Requests for quotation

Total Place project

Support and analysis of spend count, pathways and `Deep Dive'

Invitation To Tender - Specification

June 2009

Purpose

This contract seeks external support to:

Develop a set of re-usable guidelines for local level spend counting.
Analysis of the results from the local pilots' spend count and deep dive exercises; to map the pathways of spend between local government, Non Departmental Public Bodies (NDPBs), regional agencies and central government.
Identify efficiency savings and opportunities for service improvement from the results of deep dive exercise.

Background

Total Place looks at how a `whole area' approach to public services in a local area can lead to better services at less cost through 13 pilot areas in England. It seeks to do this by

Identifying the distribution of funding to the Local Authority level.
Map the pathways of funding from central government to Local government
Having understood the funding pathway propose efficiency improvements

The pilot projects build on work in Cumbria by the Leadership Centre for Local Government/PWC to ask fundamental questions about how public spending in areas fits with the priorities of that area, and how services can be improved to drive improved outcomes and greater efficiency.

This work was a key announcement of Sir Michael Bichard's Operational Efficiency Programme (OEP) work on Local Incentives and Empowerment, which seeks to reduce costs and introduce new ways of working, through collaboration and local leadership, within the context of constrained resources and public expectations of higher quality services.

The public sector has a strong track record of delivering efficiency savings, but must go even further in future years. For example, local government met the Gershon efficiency targets one year early and released cashable savings of £3.4bn 2004-08, and DCSF secured £3.9bn of savings. The 2009 Budget set out how the increased £35bn value for money target over the CSR period to 2010/11 will be split by department, for example with local authorities generating an extra £5.5bn of recyclable savings, and health an extra £10.5bn.

Evidence from the OEP shows that it is possible to go even further. The local incentives and empowerment work focused on the transformational potential of organisations collaborating more effectively through local leadership, looking at the potential Value For Money gains achievable across the whole public sector in a place.

The Government recognises that excellence on the frontline cannot be imposed by the centre. Therefore there is great value in different public service organisations collaborating to address interconnected local issues and deliver cross-cutting outcomes; of devolution in the delivery of public services in facilitating `horizontal' collaboration between agencies and in ensuring that public services are responsive to local needs.

Delivering locally requires re-weaving national policies together with local priorities and implementing them within the constraints and opportunities of the local operating context. Taking child obesity as an example, “Departments plan to tackle childhood obesity through some 20 interventions (as illustrated by the diagram below) aimed at prevention and treatment …. Delivered through a range of organisations and partnerships … Such complex delivery arrangements, if not well managed, create significant risk that resources, far from being more effectively targeted at citizens' needs are lost in confusing and wasteful administrative activities.”

Partnership arrangements now exist and are strengthening local collaboration, with LSPs playing a lead role and giving greater weight to joint priorities. Changes to performance and funding frameworks are also facilitating strong local partnerships, with a streamlined national indicator set, LAAs to set local and national priorities, and a move to a single comprehensive area assessment framework.

Links will need to be made between the findings of Total Place and the further rationalisation of the local performance framework and other Bichard recommendations.

Objectives

The objectives are to

Based on feedback from the high level spend count exercise produce re-usable guidance for local level spend counting.
Understand the complexity of the spend pathways by mapping the flow of money as captured by the high level spend counting and in greater detail from the service theme specific `deep dives'.
In partnership with pilot areas propose efficiencies from re-organising services or funding pathways.

Explore in depth how funding is organised for a limited number of selected priority service areas (6 - 8). Local delivery efficiency savings and opportunities for service improvement should be sought.
Opportunities to streamline Central Government management of spend to these thematic service areas.

The high level spend counting exercise will be conducted during July. Guidelines provided for that exercise can be provided.

Suppliers will need to

Work with and support, but not impede local pilots.
Understand and make links within the deliverables to related projects. Including the further rationalisation of the local performance framework, other Bichard recommendations, and the Effective Partnership Data Management (EPDM) programme that is developing a model to support strategic evidence based resource planning decisions.

The diagram below illustrates the conceptual framework of the project. Pilot areas will focus on service themes. Money flows from National and Regional bodies to the Local Delivery level. The project will explore these interactions to seek service and efficiency improvement while reducing bureaucracy.

0x08 graphic

0x01 graphic

Deliverables

Bidders will be invited to a specification review meeting prior to the closure date for tender submission.

Delivery of the outputs, especially from the deep dive, will require that the supplier work alongside, but not interfere with the pilot areas' staff and contractors. The supplier will need to draw out the evidence without placing additional burden on the pilots.

While a template and guidance for the high level spend counting has been provided to pilot areas each has flexibility to develop a local approach. Variation in reporting will need to be accounted for in analysis of the results.

Key deliverables will be:

High level spend mapping:

Report on pilot areas' experience of map high level spend. This should identify issues faced, solutions found and examples of good or efficient practice. It should also identify overlaps and synergies with relevant activities, including further rationalisation of the local performance framework, other Bichard recommendations and the Effective Partnership Data Management (EPDM) programme (medium priority).
Drawing on feedback from the pilot areas, the production of re-usable guidance on how to conduct high level spend mapping. This guidance should be able to support future local level reviews beyond the pilot areas. (medium priority)
A report highlighting where high level spending is allocated, under which theme spend is distributed. (medium priority)
A high level spend pathway diagram for captured spend data (low priority).

Deep dive report, using appropriate data visualisation techniques, to

Spend pathway diagram showing source and scale of funding by theme from local to higher levels. The spend pathway diagram should, either in accompanying text or within the diagram itself, highlight where inefficient spending is occurring. (high priority)
Based on findings of the `Deep dive' detailed analysis against particular service themes (selected by pilot areas) identify overlap in spending between agencies, duplication in delivery and opportunities for service improvement (high priority).
Key messages about collaborating effectively, and the potential gains from merging functions. (high priority).
Challenging questions for central government to consider - both on the specific examples, and the appetite for substantial work and a greater degree of change (high priority).

Presentation of findings focussing on deep dive results
Regular project management reports

Scope

The 13 pilot areas are listed in the annex. The Birmingham pilot area will be excluded from this activity.

The more detailed aspects of the work should focus on service themes with the greatest opportunity for efficiency and service improvement.

There are recognised challenges that the contractor will need to be addressed in the analysis and within the guidance, such as:

Discerning the location for funding that cannot easily be attributed to a locaI area.
Distribution of funding given boundary discrepancies between members of Local Strategic Partnerships (Health, Police, Fire, Local Government) and other bodies.
Identifying/tagging cash to a service theme
Incomplete data. The most significant sources of funding should be identified, but use of resource should be kept to a minimum. Recommendations should be provided on how to collect sufficient data to satisfy a Value for Money analysis.
When accessing value for money how to account for the spatial variance in the unit cost of a service.
How to display clearly the complex funding pathways of service themes and where there are inefficiencies.

Relevant previous spend counting exercises include:

HM Treasury Public Expenditure Statistical Analysis (PESA) by Region, available at:
http://www.hm-treasury.gov.uk/d/pesa0809_complete.pdf
Counting Cumbria, available at :
http://www.cumbriastrategicpartnership.org.uk/elibrary/view.asp?id=27534
Where Does Public Spending Go?
DETR Pilot Study to Analyse the Flows of Public Expenditure into Local Areas. 1998 (Available in hard copy only from Communities and Local Government)

Key dates

Key tender dates are:

16 July: Closing date for tender submission

Suggested delivery dates are:

July: High level spend counting conducted by pilot areas

late July - early August: Assistance to pilot areas on the deep dives.
early August: Interim report on high level spend count, including initial spend pathway map.
early September: Report on high level spend count. To include:

Pilot areas experience of conducting the high level spend
First draft of spend count guidelines
High level spend pathway map

end September:

Interim deep dive reports with initial spend pathway maps for several of the service themes

end October: Final set of

Deep dive reports
Deep dive spend pathway maps for 6 - 8 service themes.
Presentation of findings with emphasis on deep dive analysis

later: Final draft of spend count guidelines

Approach

Tenders will be marked against all the elements listed below. Marks will be allocated as 0 for non compliance, 1-2 for a partial answer, 3 for a good answer and 4 for an exceptional answer. A weight will be applied to the responses as shown in square brackets below.

Your proposal should include:

A brief outline of your methodology and approach (including any proposals for any sub-contracting); [tender weight: 2]
A cost breakdown for each deliverable and for unit staff (include presentation of findings, reports, client liaison and travel & subsistence); [Tender weight: Mandatory]
Gantt chart of project schedule and timelines; [tender weight: 4]
High level project risk assessment [tender weight: 1]
Evidence of organisational capacity deliver the objectives outlined [tender weight: 2]
Profile and skills of the project team. [tender weight: 3]

In addition please provide concise answers to the following questions:

What approach would you take to capture feedback and lessons learned from the pilot areas without adding burden? [tender weight: 2]
What are the key elements of guidelines required to ensure their successful use? [tender weight: 3]
What visualisation techniques would you use to develop a) high level spend pathway map and b) the detailed `deep dive' service theme specific pathway map? [tender weight: 4]
What pertinent experience you have of process or logistic review? [tender weight: 5]
How would you identify inefficiency and opportunities for improvement in the management and delivery of public sector services? [tender weight: 5]

Payment

This is a firm price contract. Payments will be made on delivery of milestones. Exact payment dates will depend on agreement of milestones. Some payment can be provided in advance to cover set-up costs.

Contract management arrangements

The Contract Manager will be Jonathan Rhind
Progress reporting should be against an agreed project plan. A highlight report should be provided regularly that identifies key risks and issues and progress against milestones.

Annex A: Pilot areas

Table of Pilot Areas
Region	Place	Type of Council
South West	Dorset/ Poole Bournemouth	Coastal town MAA
South East	Kent	Two tier/ County
London	Croydon	London Borough
London	Lewisham	Inner London Borough
East	Luton/ Central Beds	Unitary
East Midlands	Leicestershire/ Leicester City	County/ MAA
West Midlands	Coventry	Metropolitan
West Midlands	Worcestershire	County
West Midlands	Birmingham	Unitary
Yorkshire and Humber	Bradford	Metropolitan
North West	10 Manchester LAs and Warrington	City Region
North East	South Tyneside/ Gateshead/ Sunderland	Metropolitan
North East	Durham	Unitary

HM-Treasury Operational Efficiency Programme: http://www.hm-treasury.gov.uk/vfm_operational_efficiency.htm

UN Classification of Functions of Government (COFOG) service classification scheme was recommended to pilots.

Funding 1

RSG

Police

Funding 4

Funding 3

…

PCT

Health

Social Protection

Environmental

protection

Education

Housing & community amenities

Recreation, culture &

religion

Economic Affairs

Public order

and safety

Defence

General public

services

Funding 2

HACA

Local Agents

National Agents

Etc…

(£Xbn)

DWP

(£Xbn)

DCSF

(£Xbn)

CLG

(£Xbn)

DfT

(£Xbn)

Pilot Area

BIS

(£Xbn)