To advise on the outcome of an options appraisal carried out to inform future implementation of the Herefordshire Connects programme, and to seek the views of the Committee on recommendations arising from the options appraisal prior to consideration by Cabinet on 31^st July.

The Committee considered a report on the outcome of an options appraisal carried out to inform future implementation of the Herefordshire Connects programme and to seek the Committee’s views on recommendations arising from the options appraisal, prior to consideration by Cabinet on 31 July 2008.

The options appraisal:  Herefordshire Connects – The Way Forward prepared by Deloitte had been circulated as a separate document.

The Interim Deputy Chief Executive presented the report and gave a presentation.  This commented on how services could be improved through the use of technology.  It set out the background to the strategic pause in the Connects programme and emphasised that the high risks of failure to major systems meant that the status quo was not an option.  It outlined the arrangements for risk managing the project noting the role of Deloitte in providing strategic advice and implementation expertise and the intention to procure market proven solutions. 

Mr D Harker of Deloitte said that, having discussed the project with a range of people from the Primary Care Trust (PCT) and the Council, the consistent view was that the vision of Herefordshire Connects was valid, probably even more so to deliver integrated services to the customer.  However, the project needed to be repositioned and restarted.  Priorities had changed.  It was clear that to do nothing was not an option with a significant danger of various systems failing.  It was a credit to ICT services that they had managed to support these systems to date.

The aim in terms of technology was to minimise the number of systems and data sources, ending up with a small number of integrated systems joined together better.  Other Councils across the Country were taking this path.  Deloitte had reviewed the technological options and four proven products to deliver the integrated back office project had been identified for consideration and evaluation.  The three key projects: integrated customer services, integrated support services and performance management remained a valid way of structuring the project.

A very prudent approach had been taken in reviewing the projected costs and cashable benefits of the project to produce the revised benefits case set out in the report.  He added that it was important not to overlook the non-cashable customer service benefits which the programme would deliver.

In the ensuing discussion the following principal points were made:

·         An explanation was requested for the further downward revision to the estimated savings to be delivered by the project.  The Interim Deputy Chief Executive said that the original case produced by Axon had been a high level feasibility study including elements not part of the Connects project, such as accommodation savings and making assumptions based on the experience of larger councils.  This had led to a high estimate of the savings.  The Head of Financial Services reinforced this point and added that the disciplines and efficiencies that underpinned the Connects project had delivered savings of £1.7 million to date.  He pointed to benefits to be derived from improved procurement in particular.   He considered the revised business case to be prudent noting that CAPITA had assured the figures.

·         It was asked whether measures were in place to make payments to Deloitte dependent on delivery.  The Interim Deputy Chief Executive said that a framework agreement had been signed with Deloitte and there was a clear focus on performance and delivery with clear milestones and a requirement that all payments must be signed off by him, the Assistant Chief Executive – Legal and Democratic and the Director of Resources.

·         It was suggested that the proposed revised vision for Herefordshire Connects as set out in the Deloitte report should be revisited. 

·         The position on the Cedar financial system which the report said needed to be upgraded to avoid a potentially critical failure was discussed.  It was noted that a short term upgrade was needed.  The evaluation of the four back office packages would look at whether Cedar should be retained or replaced in the medium term by the back office package.  The Head of Financial Services reported that an upgrade that also provided increased capability had been implemented resolving risk and business continuity issues.

·         The number of other systems identified in the report as critical was noted.

·         The need to ensure the Council resolved the provision of its data centres was also noted.

·         The development of the Corelogic social care package was discussed.  It was confirmed that this was on target to be implemented by mid-November.  Work was continuing to resolve the admittedly complex issues of data sharing with the PCT, the scope of which was not yet fully defined.

·         In reply to a question about procurement the Interim Deputy Chief Executive said that this would be undertaken in accordance with the recently revised procurement policy and would be aligned with the PCT.  The PCT had its own procurement policy but this was not significantly different to that of the Council.  The principal complication that arose was where the NHS itself had requirements as to what systems the PCT should use, for example Human Resources.  Whilst it was possible to have an objective of the Council and PCT having one system, and to bear in mind the links between the Council and PCT systems in the procurement process, the timescale for achieving one joint system, if it were to happen, was dependent on the NHS.  He added that one of the benefits of the project would also be better use of technology that had already been procured. 

·         It was asked whether the Strategic Health Authority had offered technological or financial assistance.  The Interim Deputy Chief Executive said that the SHA sat on an ICT group chaired by the Council’s Chief Executive that included representatives of the PCT and the Hereford Hospitals Trust.  The Council was also seeking to draw on expertise available under the Regional Improvement and Efficiency Programme

·         The revised business case projected revenue savings of £3.4 million per annum by 2012/13.  It was suggested that savings of that level could only be achieved through staff reductions.  It was asked if an analysis had been undertaken of where these reductions would be made.  The Head of Financial Services said that an assessment had been made and where appropriate discussed with managers.  The bulk of the projected savings were in fact expected to be delivered by savings in procurement.  Savings from reductions in the use of agency staff had also been identified.

·         The Cabinet Member (Corporate and Customer Services and Human Resources) said that the current systems led to considerable duplication.  The removal of this would have an impact both on the number of jobs at various levels within the organisation and on ways of working.  This could mean redundancies but change might be manageable through turnover.  She suggested Members might find it helpful to visit another authority where new systems had been successfully implemented.

·         That the significant risks to current systems and the cost of failure both financial and in terms of customer service made swift progress essential.

·         The Chief Executive said that the Connects Programme had been put on hold to enable a reassessment to be made and to propose a way forward that was realistic and deliverable.  That is what had been done.  The proposal in the report was realistic and prudent in terms of the projected savings, with the potential for larger savings to be made.  The project would be properly monitored and project managed.

RESOLVED:

That Cabinet be advised:

(a)       there is clearly a need to address the growing risk of systems failures highlighted in the Deloitte report promptly;

(b)       that the wording of the proposed new vision for Herefordshire Connects as set out in the Deloitte report should be revisited; and

(c)       that the Committee continues to desire reassurance that the Connects project will deliver what is now promised, noting that promises in the earlier life of the project did not come to fruition, and requests Cabinet to ensure measures are put in place to enable effective monitoring of the delivery of the project.