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Transorming government

Home Office delivers a smarter estate

helped by strategic insights from IBM

Business challenge

• To transorm the Home Oice

estates and property unction

– which then managed some

1,900 buildings – in order to

deliver improved value or money

and annual savings o around

£40million

• To establish two new lean Estates

Shared Service Centres.

Solution

Starting with a strategic review, IBM

has contributed to a successul

change programme embracing

processes, organisation,

procurement and systems.

Comprehensive improvements

are already delivering signiicant

savings through a more eicient

and eective organisation.

Key benefits

• Home Oice well positioned to

deliver HMG Higher Perorming

Property Programme

• Has raised proile o property within

Home Oice enabling improved

strategic management

• New pooled contracts which

achieve better costs and also

incentivise perormance and

innovation.

Overview

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.

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.

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 o General Property

at the Home Oice



Transforming estates and property management

2

Business benefts

• Costreductionsexpectedtoreach

over £40million per annum

• Improvedservicedeliveryand

customer focus

• Increasedproductivity

• Greatercontrolofdemandfor

services

• Headcountreducedfromsome400

to around 220

• Moreeffectiveprocurement

processes and contracts

• Greatercompetitionandkeener

prices from suppliers.

“ The IBM team’s

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 o General Property at

the Home Oice

Value or 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 solutionTony 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 thenew, 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.



Key components

IBM Services

• IBM Global Business Services– Asset Management Solutions Group

Transormation at a glance

To achieve improved value or

money and release resources or

rontline activities, the Home Ofce

has implemented a comprehensive

transormation o its Estates unction

that enables more ocus on customers

while delivering substantial annual

savings. A joint Home Ofce/IBM team

worked on a wide-ranging change

programme that embraced process

and organisation change, procurement

support and design o a single estates

management inormation system. A

centre o excellence now manages

property related services or the Home

Ofce, resulting in improved service

delivery and increased productivity.

Greater emphasis on managing

demand or property services ensures

efcient use o resources. The Home

Ofce is on target to achieve savings o over £40million per annum. Part o this

saving will be or the Ministry o Justice

ollowing Machinery o Government

changes.

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 halfwayhouse 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 property-

related 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 some400 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 team’s 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 inormation

Please contact your IBM representative or IBM Business Partner. Visit us at:

ibm.com /gbs/uk



IBM United Kingdom Limited

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North Harbour

Portsmouth

Hampshire

PO6 3AU

Tel: 0870 010 2503

ibm.com /services/uk

IBM Ireland Limited

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Tel: 1890 200 392

ibm.com /services/ie

IBM South Africa Limited

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Sandhurst

2146

South Africa

Tel: 0860 700 777

ibm.com /servicessolutions/za

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