Transforming government

Home Office delivers a smarter estate helped by strategic insights from IBM

Overview
Business challenge To transform the Home Office estates and property function which then managed some 1,900 buildings in order to deliver improved value for money and annual savings of around 40million To establish two new lean Estates Shared Service Centres. Solution Starting with a strategic review, IBM has contributed to a successful change programme embracing processes, organisation, procurement and systems. Comprehensive improvements are already delivering significant savings through a more efficient and effective organisation. Key benefits Home Office well positioned to deliver HMG Higher Performing Property Programme Has raised profile of property within Home Office enabling improved strategic management New pooled contracts which achieve better costs and also incentivise performance and innovation. Occupying a large and geographically scattered estate, the Home Office then had approximately 1,900 buildings representing one million square metres of accommodation. Part of the estate has since transferred to the new Ministry of Justice. The buildings meet a diverse array of needs and range from immigration centres and juvenile offenders units to accounting and finance centres. Historically, the structure of the Home Office Estates function was based on the federal nature of the organisation. Each of the business units such as Prisons, Immigration, Probation, Passports, Police and Training had its own approach to managing property. Driven by the 2004 Lyons and Gershon reviews, which advocated releasing resources for frontline activities through public sector efficiency, the Home Office committed to achieving savings of over 1.9billion per year. Every part of the organisation was expected to contribute. The inefficiencies caused by this lack of standardisation and strategic planning across the organisation meant there was considerable scope for improvement and cost reduction.

The IBM team was essential to the success of our transformation. They provided a wealth of property management experience gleaned from many different organisations. They were able to benchmark against other organisations to help us size correctly and many times they helped us avoid unseen pitfalls.
Tony Edwards, Head of General Property at the Home Office

Transforming estates and property management

Business benefits
Cost reductions expected to reach over 40million per annum Improved service delivery and customer focus Increased productivity Greater control of demand for services Headcount reduced from some 400 to around 220 More effective procurement processes and contracts Greater competition and keener prices from suppliers.

Value for money review IBM consultants played an important role in transforming the Home Office Estates function. They initially supported a value for money review that incorporated 1,900 Home Office buildings, representing 700million of annual cash expenditure plus 300m annual resource cost of capital. The review recommended creating two Centres of Excellence, one for the custodial estate and one for the general estate. The Home Office has since relinquished responsibility for custodial organisations but the new owner, the Ministry of Justice, has retained the Centre of Excellence that IBM helped create, and continues to take services from the Home Office General Property team for its Probation estate. Sustainable solution Tony Edwards, Head of General Property at the Home Office says: This shared services model is actually pretty unusual in an estates environment. Property strategies are often about consolidation and how you use accommodation. IBM applied its breadth of experience to help us move beyond the obvious to focus on making our organisation more effective. Essentially we have not simply targeted the quick wins, although these are also important, but have concentrated on creating a sustainable solution that will continue to offer us benefits in the long term. Ensuring best practice IBM estates and property professionals were deeply involved in designing the

The IBM teams guidance, judgement and strategic insights helped us put in place a solution that will continue to give good value for money to UK tax payers for many years to come. They brought a change management capability that was invaluable and throughout the project were able to pick up on our issues and help us through to a very successful outcome.
Tony Edwards, Head of General Property at the Home Office

new, leaner, customer-focussed function. A series of workshops helped scope out what the new organisation would look like and identified the key stakeholders to be included in shaping it. The IBM team was essential to the success of our transformation. They provided us with valuable insight into successful property management gleaned from many different organisations. They were able to benchmark against other organisations to help us size correctly and on many occasions they helped us avoid unseen pitfalls in making the changes that we implemented with their advice and support. Once work on the structure of the function was under way, a new procurement strategy was developed to cover facilities management, estates management, design and build, and professional services. This involved devising new contracts to deliver both supply and demand side savings. IBM supported the Home Office commercial team responsible for re-procuring the contracts, and helped them pioneer a competitive dialogue procurement process. This innovative move was made possible by recent changes to European procurement legislation and involves engaging with suppliers at a much earlier stage in the procurement process, before they price their bids. It enables a far deeper understanding of what each supplier has to offer and at what price.

One of the greatest challenges on the contract side was understanding and incorporating the diverse requirements of the different Home Office business units. For example, the Serious Organised Crime Agency has specific security concerns that have to be addressed, while Approved Premises (which provides halfway house accommodation, for instance for released offenders being rehabilitated in the community under probation supervision) need to have meals provided to a specific timetable. Ensuring that the central estates teams understand all these requirements is crucial, so a network of representatives within the business units has been set up to act as single points of contact. Improved service, reduced costs The transformation of Home Office Estates is bringing many benefits. Better strategic planning, improved service delivery and best procurement practice have not only reduced costs, they have also improved the quality of services delivered. A new help desk facility provides more than 50,000 users of Home Office and Ministry of Justice accommodation with a single point of contact for all propertyrelated concerns and also helps challenge user demand before requests for expenditure are passed on to contractors. Rather than redesigning a facility to use once or twice a week, for example, a business unit will be encouraged to try to find someone who is willing to share a facility. Increasing focus on what is really needed in this way reduces waste. Centralising the Estates function has enabled headcount to be reduced from some 400 people to around 220, more than was expected. Also contract changes have shifted more work to suppliers, increasing employee productivity. The headcount reduction has been achieved with no enforced redundancies, resulting mainly from removing the need for many of the temporary and agency staff previously employed in the different business units. Supply side savings have come principally from economies of scale and efficiencies brought about through the re-procured contracts. The final tenders are still being analysed but supply side savings of over 22million per annum are expected. Overall savings for supply and demand side are on target to reach over 40million per year. Edwards concludes: The IBM teams guidance, judgement and strategic insights helped us put in place a solution that will continue to give good value for money to UK tax payers for many years to come. They brought a change management capability that was invaluable and throughout the project were able to pick up on our issues and help us through to a very successful outcome. For more information Please contact your IBM representative or IBM Business Partner. Visit us at: ibm.com/gbs/uk

Key components IBM Services

IBM Global Business Services Asset Management Solutions Group

Transformation at a glance
To achieve improved value for money and release resources for frontline activities, the Home Office has implemented a comprehensive transformation of its Estates function that enables more focus on customers while delivering substantial annual savings. A joint Home Office/IBM team worked on a wide-ranging change programme that embraced process and organisation change, procurement support and design of a single estates management information system. A centre of excellence now manages property related services for the Home Office, resulting in improved service delivery and increased productivity. Greater emphasis on managing demand for property services ensures efficient use of resources. The Home Office is on target to achieve savings of over 40million per annum. Part of this saving will be for the Ministry of Justice following Machinery of Government changes.

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