4th Edition | July 2022 | Human Engine Insights
Human Engine Insights is our monthly digest of what's happening in our world. Each edition will include industry news and thought pieces from our team on what's happening within the private and public sector.
Please keep reading for the goings-on from Team #HumanEngine!
The Alternative Heatwave - Cash Drought for Public Services
In August, it's quite typical in the UK to discuss the weather. However, with the cost of living going up faster than the mercury in thermometers, the HOT topic on everybody's lips, is how many of us will be able to afford to keep warm this winter. At Human Engine, we're in tune with the pressures faced by our clients in the public sector. As the global economic crisis is a problem far bigger than our newsletter, we're focussing our thoughts on Local Government.
New figures, based on research conducted by the County Councils Network (CCN) and the Society of County Treasurers, reveals that the estimated costs of inflation in 2022/23 for 40 of England’s largest councils have risen by 92% in just three months since they set their budgets in March. To balance their budgets – as they are legally required to – and control costs, councils are warning they face a winter of ‘difficult decisions'. These could include further unplanned reductions to services and the cancellation or delays to major construction projects such as new roads, amenities and infrastructure upgrades to schools, as well as pothole filling.
While the government provided councils with additional funding for this financial year and council tax increased by an average of 3.6%, these inflationary costs, coupled with rising demand, far outstripped these additional resources. With the energy price cap and inflation (hopefully) peaking later in the year, the heat is on public services to plug the funding gap. The question is, how? How can they close the gap, support businesses and deliver vital services to residents? This is a hard question, central government controls many budgets but many councils can always look at what they can do themselves. In 2019/20, local authorities in England received 23% of their funding from government grants, 50% from council tax, and 27% from retained business rates – revenue from business rates that they do not send to the Treasury.
We've included some suggestions below:
Council Tax Increases. The obvious option, but for many, this tax is a regressive measure and will only hit the poor hardest. Before taking the drastic measure to increase council tax, consider other avenues.
Crackdown on Bad Business. Catch rogue employers who are not paying their employees at least the national minimum wage and ensure arrears are paid out in full by any employer found flouting the rules. Employees who don’t speak English or have literacy needs, and may not be aware of their legal rights are the most vulnerable. Over 200 employers in Dec 2021 were named and shamed by the government for failing to pay their lowest-paid staff the minimum wage. Over 12,000 staff and millions of unpaid wages.
Further reading - https://www.gov.uk/government/news/over-200-employers-called-out-for-falling-short-of-paying-staff-the-minimum-wage
Support Hyper-Local Services. Empower community groups to deliver hyper-local services that are important to them. Place-based service delivery can have a positive social impact on the wider determinants of health and reduce inequalities, whilst also delivering financial savings and cost avoidance in high-need, high-cost services.
Curious to find out more? Further reading HERE
Or please contact Tom Mills (tom@human-engine.co.uk)
Review Existing Contracts. The public sector spends c.£300 billion a year delivering services through its supply chains. World Commerce & Contracting estimates that on average 9% of the contract value is leaked annually due to poor contract management – over 20% in worst cases.
Even the smallest improvements in contract management capability can realise massive value.
Human Engine has helped organisations unlock £millions from contracts - Keep reading to find out more in our spotlight service.
The above suggestions are neither exhaustive nor the panacea to a bigger problem, but hopefully a good start. Any other ideas? Leave your thoughts in the comments!
Spotlight Service. Spend Matters: Contract Management
We combine knowledge of public services with commercial expertise and market insight to help organisations maximise the value in their supply chains and unlock cashable savings, improved quality, innovation and social value.
One common theme we have found is that commercial capability is focused on the procurement process at the expense of market shaping and contract management activities
As mentioned earlier, the public sector spends c.£300 billion a year delivering services through its supply chains
World Commerce & Contracting estimates that on average 9% of the contract value is leaked annually due to poor contract management – over 20% in worst cases
Even the smallest improvements in contract management capability can realise massive value.
Our Approach
A complete assessment of the organisation’s contract management capability at a corporate and service level. Depending on existing capability:
Introduction of basic or enhanced contract management policy, processes and systems
Segmentation of contracts, focusing resources on areas of greatest impact
Foundation or enhanced contract management toolkit
Foundation or enhanced training for contract managers
Our Method
We want you to feel informed and involved when we work with you. Here is an overview of how we can accomplish contract management improvement together:
Define and Discover. We will hold a kick-off meeting with the project sponsor(s) to confirm the scope and agree ongoing project/contract management arrangements, including frequency and format for highlight reporting and our approach to communications with stakeholders throughout the project.
Engage and Explore. We will undertake stakeholder engagement, documents review, data review, skills audit and external research to synthesise findings.
Devise and Develop. We will develop comments and feedback from stakeholder interviews into themes and combine this with internal data analysis, benchmarking and best practice.
Iterate and Improve. We will hold reviews and feedback sessions with high-interest stakeholders to evaluate the draft report. Taking on board comments, we can iterate and improve the final version to build consensus before submitting it to the final decision-making board.
Confirm and Conclude. We will confirm that the final version of the report meets the requirements of the brief and conduct handover activities, including the transfer of supporting documentation and data such as case studies and benchmarking evidence.
For more information, on how we can help your organisation to maximise the value in your supply chains, please contact Ali Macdonald, ali.macdonald@human-engine.co.uk
Lunchtime Learning
Do you have a passion for being commercial in the public sector? Join our commercial networking group. We meet monthly for an informal round table to share, develop ideas and network with like-minded peers. All sessions will include a mix of guest speakers, discussions and group activities. The sessions are open to commercial directors, commercial managers and business development teams from local government, central government and the NHS.
Free to attend. 12:30 – 13:30
Upcoming Schedule
25th August – Confronting Price Volatility - Inflation Special!
29th September – Effective Contract Management - with Ali Macdonald
Free to join - We look forward to seeing you!
Behind the Scenes - Team Day!
In recent months, our team have been busy swimming the channel, raising children, moving homes and supporting local charities outside of work. All whilst working hard for our clients. It has felt very busy and we're often not together in one place. Therefore it's always great to get together as a team to catch up in person.
In mid-August, the Human Engine team got together in London and applied our property knowledge to a game of Monopoly Lifesized. Sadly, only one team could win (which is code for not us) but we had a fantastic time playing... It's quite hard to flip a 15x15m board in a fit of temper!
Thankfully we're much better at consulting than Monopoly! 🎩🎲🧐💰🐶🚂
A great day out and a chance to meet our latest recruit, Jenny Woolcock. Jenny is a recent graduate of Durham University and will be joining us formally in September as a business analyst. Welcome to the team - hopefully, we did not scare you off!
About Human Engine
Human Engine is a leading management consultancy with specialisms in strategy, change, digital, commercial, procurement and projects. We work with local authorities, central government, charities and NHS organisations nationally to help transform their strategies, operations and cultures to improve outcomes for customers and communities.
If you wish to find out more about us - Visit Our Website
Until next time!
We’re so glad you joined us for the latest newsletter — we’d love to hear what you’re thinking. Any topics you'd like us to share our perspective on? Drop us a comment and let us know!
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