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National Commercial Board

Shared Services in Policing

Outline Business Case – Updated December 2018

V0.2C

Shared Services in Policing (OBC2) of 108

Document control Document information

Document title Shared Services in Policing Outline Business Case (OBC)

Owner Mark Gilmartin

Distribution Document status DRAFT

Revision history

Version Date Description

0.1 14 Sep 2018 Draft produced for internal team comment

0.2 07 Dec 2018 Economic and Financial Cases updated with the latest survey responses from forces

Further descriptions on the Centre of Excellence’s business model added as an appendix

Emerging thinking on a national approach added as an appendix

Minor text edits

0.2B 12 Dec 2018 Revised post internal review. More details on the progress since September 2018 added. Cost and benefit estimates converted to ranges. Appendix D added.

0.2C 19 Dec 2018 Implementation roadmap refined. Break-even points updated. Minor text edits. Executive Summary, Strategic and Economic Cases revised to reflect the presentation to the NPCC Finance Committee on 14/12/18.

Reviewer list (consultation/concurrence)

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Document sign-off


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Table of Contents

1. Executive summary 6 1.1 Background and context 7 1.2 Scope 8 1.3 OBC approach agreed with NCB 8 1.4 Strategic context 8 1.5 Case for change 10 1.6 Convergence options & assessment 11 1.7 Recommendation 12 1.8 Next steps 13

2. Introduction 17 2.1 Background and context 17 2.2 Functions in scope of the business case 17 2.3 Approach taken to the development of the OBC 18 2.4 Structure of the document 19

3. Strategic Case 21 3.1 The strategic context 21 3.2 Responding to the strategic context 24 3.3 The extent of shared service provision in policing 24 3.4 Plans for further adoption of shared services and other improvements 37 3.5 Case for change 38 3.6 Emerging ‘Statement of Intent’ for shared services 40 3.7 Strategic risks 41 3.8 Constraints and dependencies 41 3.9 Conclusion 41

4. Economic Case 43 4.1 Introduction 43 4.2 Critical Success Factors 43 4.3 List of options 43 4.4 Approach to comparative analysis of the options 44 4.5 Baseline 46 4.6 Option 1: Do Minimum 47 4.7 Option 2: Influence/Facilitate Convergence 49 4.8 Option 3: Intervention Convergence 51 4.9 Option 4: Hybrid Approach to Convergence 55 4.10 Option 5: National Approach to Convergence 58 4.11 Option 6: Mandatory Convergence 61 4.12 Summary of qualitative/quantitative assessment 65 4.13 Workshop ranking of options 67 4.14 Recommendation for the preferred option 67

5. Commercial Case 69 5.1 Introduction 69 5.2 Governance 69 5.3 Components requirement and routes to market 69 5.4 Procuring the ERP framework 70

6. Financial Case 71 6.1 Introduction 71


6.2 Note about the financial case 71 6.3 Implementation costs for option 3 71 6.4 Affordability and funding sources 71

7. Management Case 73 7.1 Introduction 73 7.2 Programme management arrangements 73 7.3 Risk and issues management 73 7.4 Communications and stakeholder management 74 7.5 Benefits management 74 7.6 Next steps 74

8. Appendices 76

A. Data collection and stakeholder engagement 77

B. Economic appraisals 79

C. Workshop output: option strengths and weaknesses 86

D. Shared Services Centre of Excellence Operating Model Design 89

E. Potential end state – a Nationally Driven Convergence Approach 105

Shared Services in Policing (OBC2) Page 5 of 108

1. Executive summary

The Policing Vision 2025 sets out a vision to transform business support functions so that they are delivered “in a more consistent manner to deliver efficiency and enhance interoperability across the police service”.

Achievement of the vision requires a commitment from policing to converge around a limited number of shared service operations and supporting systems. While some progress has been made towards achieving the vision, the current approach to shared services implementation remains driven by individual forces’ need for change and is relatively small-scale. There is still significant variation in processes, systems and costs.

Current plans by forces, as per their survey returns, to implement shared services over the next 10 years could deliver savings of between £69m-£82m, but the implementation of shared services in policing has had mixed success and there are still some forces which have no plans for shared services. The pace and direction of change without central intervention may not therefore be rapid or consistent enough to deliver the vision.

To enable this vision, this Outline Business Case (OBC) establishes the case for driving this convergence through the creation of a national Centre of Excellence (CoE) in Shared Services. The CoE will enable more forces to deliver their shared services plans more successfully, reduce cost variation and also accelerate convergence towards the vision. It will do this by:

Providing access to specialist insight and skills

Creating common standards and processes to drive a consistent approach

Supporting forces to converge towards a small number of services and systems

Sharing good practice and lessons learned to improve the outcomes of planned shared

services

Reducing duplication of effort and cost of implementation by making common solutions

available

Providing neutral advice on contractual arrangements and models for forces moving to a

converged solution, including governance models and exit strategies/arrangements

In parallel, while supporting early benefits, the Centre of Excellence can also work with forces to assess and develop a roadmap towards a more radical transformation of shared services. This could be achieved organically as existing contracts and systems come to an end or accelerated through funding of early termination of existing systems or transition to new services. However, this is likely to be complex and costly.

The CoE can be an important staging post to enabling preparatory standardisation to take place and therefore provide a staging post in policing’s journey towards nationally driven convergence, as illustrated below:


Figure 1: A journey towards national convergence

The CoE’s focus will initially be on convergence within ERP-enabled functions, namely finance, HR, procurement and L&D planning and administration. Whilst the Centre will focus on the development of regional shared services, it would also be able to improve the outcomes of other multi-force arrangements.

By doing this, it is estimated that the Centre of Excellence will:

Deliver an additional £11M-£37M net benefit (NPV) over and above what forces could

achieve based on their current plans

Drive convergence to proven service delivery models and IT platforms, leading to

greater interoperability which will improve forces’ resilience and their ability to

collaborate operationally.

1.1 Background and context

In 2017 the National Commercial Board (NCB) conducted an exploratory piece of work to inform the future direction of Shared Services in policing1. Analysis of The Chartered Institute of Public Finance and Accountancy (CIPFA) data suggested that there remained wide variations across policing in the average costs of support services, particularly in routine transactions. The discovery work also found significant variation in the use and nature of shared services across policing in areas such as finance, HR, procurement, and a lack of clear evidence that any particular model was demonstrably more effective than others.

This business case focuses on primarily assessing the case for a more strategic approach to shared service provision of enabling services in policing in order to achieve more convergence and support delivery of the Policing 2025 Vision.

The work has been undertaken fully mindful of the present limits on the likely desirability and achievability of a single “one size fits all” model for shared services for policing in the short and medium term. For this reason, the options assessed in this case have explored options along a spectrum of increasing standardisation and national control, with a view to determining the

1 Available on POLKA


optimum position achievable today while contributing to more radical options in the future, and one that is also consistent with the existing accountability framework in policing.

1.2 Scope

The functions in scope of the OBC are human resources (HR), finance, transactional procurement, and learning and development (L&D) administration & planning. The four functions were selected as each of them is enabled by adoption of an Enterprise Resource Planning (ERP) solution, and they normally do form the core of a shared service arrangement. In addition, there are other activities/workstreams within the NPCC that are already examining the reform opportunities attainable within other support services such as strategic procurement, ICT, fleet, and property services.

Whilst the focus of this business case is on shared services, the activity proposed in each of the options, in particular standardisation and convergence, are likely to have a positive effect on forces without the need for them to adopt shared services.

1.3 OBC approach agreed with NCB

The SOBC was converted into an OBC during August 2018 by, in particular, incorporating more detail into the preferred option and the necessary procurement approach, which will allow a decision to be made and funding to be secured, for the detailed design and Final Business Case (FBC) production. Key change agreed with the NCB were:

Removing Legal and Learning & Development Delivery from scope

Including examples of shared services and the benefits achieved from across the public

sector in the Strategic Case

Developing the procurement approach and the routes to market in the Commercial Case

Including force-level costs of implementing shared services in the Economic and

Financial Cases

Including NPV analysis for the preferred option in the Economic Case

Including detailed set of next steps for the Management Case

A further update was made to this document in December 2018 to include further detail on the design of the preferred option (Appendix D), and revised cost and benefit figures following an update to the survey returns received from forces in early 2018.

1.4 Strategic context

The need for a focus on enabling support functions in policing has been recognised in the Policing Vision 2025 and as an important enabler to delivering financial savings and efficiencies.

As part of the funding settlement for policing in 2016/17, a target of £350m of procurement savings by 2020 was set by the Home Office. There remains a need to find £120m of savings and efficiencies, of which £20m needs to come from enabling support services, with a particular focus on driving down costs of transactional services to the national average.

Policing also has an opportunity to benefit from the wider government strategy on shared services. The Cabinet Office issued a Shared Services Strategy for Government in January


20182 setting a clear direction for the next 10 years. While the Government’s Shared Services Strategy does not apply to policing, there are opportunities for policing to benefit from the broader purchasing power of the public sector, work done to standardise processes and consolidate technology platforms and the learning to date from shared service implementation.

The Police Reform and Transformation Board delegated an objective to the NPCC Finance Co- ordinating Committee to develop a direction for the service on shared services and facilities (Objective 5.7). To deliver against this objective, the National Commercial Board (NCB), which reports to NPCC Finance, formed a dedicated workstream on shared services.

Enabling services consume £1 in every £5 spent on policing. Services in scope of this business case are a smaller proportion (14p in every £5) but still represent addressable spend of £352m a year. Taking the four functions in scope of this business case only, there has been an increase in expenditure on these functions between 2013 and 2017, caused mainly by Learning and Development increases. There were cost reductions for HR (4%), Finance (26%), and Procurement (11%). There was a reduction of 9% for forces sharing these functions, compared to a reduction of just 1% for those forces with no shared service in these functions.

For all the functions in scope of this business case, the analysis also found a wide variation in transaction costs both between forces and between different methods of service delivery, with no one service delivery model demonstrably more effective than others.

There is already relatively high adoption of shared services in policing. In total, 28 of the 43

English and Welsh forces share at least one of the in-scope services with either another force or

another public-sector organisation. However, as can be inferred from the table below, there are

still a large number of in-scope services that are not shared.

Finance HR L&D Procurement

Number of forces sharing 25 25 20 23

% of forces sharing 58% 58% 47% 53% Table 1.1: Number and percentage of forces in shared service arrangements

While HR and procurement services are shared by nearly 50% of the forces, there is a wide

variety in the size and type of shared service arrangements. Looking specifically at force-to-

force shared services arrangements, Finance, HR and L&D tend to be small configurations of

groups, while larger groups are found for the Legal and Procurement functions.

In addition, the findings suggest that there are opportunities for increased benefits by advancing

the maturity of existing shared service arrangements. Combined with a further survey finding

that a majority of forces were either considering or planning to expand shared services, these

points suggest that there are emerging opportunities for greater convergence and

standardisation of shared services.

There is also a wide variation in the way corporate systems are configured and deployed,

especially in terms of the level of self-service functionality made available. The emergence of

cloud-based systems and rise of automation and system integration solutions provide some

further opportunities to forces. As contracts with system vendors near their end-dates there are

naturally occurring opportunity points over the medium- term. A large proportion of contracts for

finance systems, for example, are due to expire in less than 3 years, not including annually

rolling contracts.

2 https://www.gov.uk/government/publications/a-shared-services-strategy-for-government


https://www.gov.uk/government/publications/a-shared-services-strategy-for-government

The main reason reported for establishing shared services is cost reduction. This is followed by

optimising resource utilisation and raising the overall service quality. However, of those forces

that share services, it was found that the financial benefits of shared services varied. In other

words, the anticipated benefits as set out in the business case have not always been achieved.

There are examples from individual forces of benefits that have been delivered from shared

service implementation, and other forces have delivered savings through transformation of

enabling services without adopting shared services.

1.5 Case for change

Analysis of the current and planned provision of shared services indicates:

A continued strategic imperative to improve enabling services, both to deliver further

value for money but also to support wider policing objectives and achieve resilience

Relatively low addressable spend but opportunities for improvements in enabling

services to enable wider benefits

A complex picture of current provision, with many different models in existence, which

indicates complexity in developing a shared service model across policing but also

opportunity

Indications that forces with shared services have reduced costs more than those without

in recent years, but insufficient evidence that one delivery model is most effective or

suitable for all forces, or that shared services is necessarily the right solution for all

forces

There is potential for improvement and achievements of further benefits. There is

relatively low technology adoption, and variability in maturity and transaction costs. Many

forces plan for adoption of shared services or other initiatives to improve enabling

services more broadly, indicating a window of opportunity.

However, there are limitations in forces’ ability to implement these changes effectively,

which suggests risks that potential benefits will not be fully realised.

The current approach to shared services has been organic and driven by the need for change from individual forces, and consequently:

Implementation remains driven by the individual forces and is relatively small-scale

There are still significant variations in processes, systems and costs across shared

services

The implementation of shared services in policing has had mixed success

Pace and direction of change without central intervention may not be rapid or consistent enough to deliver the vision.

This approach has led to lack of ability to be strategic in the market, with no user groups/communities having been formed, and no joined-up commercial approach to supplier management being taken to get better buying power.


There is a risk that initiatives that could be in the interest of policing in general are not taken forward due to lack of funds within individual forces, and with no repository of good practice, forces are also at risk of re-inventing the wheel, when they could benefit from sharing of lessons learned through their respective analyses and implementations.

We consulted widely with forces and PCC representatives. There was a broad consensus of the need for change and a different approach to development of shared services or wider reform to enabling services than the current force-led organic approach described above. There was also broad support for a more collective approach to shared services across policing, which can improve resilience, support to frontline policing, and achieve further value for money.

As part of the survey, forces were asked what type of shared services assistance from the centre would be of benefit. Assistance to encourage force standardisation, collation of best practice, and facilitation of collective procurement exercises were most commonly highlighted. These points suggest that forces have an appetite for greater convergence of shared services if the requisite support is available.

There was also caution expressed by some, typically from larger forces, that shared service models are not necessarily suitable for all forces, a concern that a one-size-fits-all shared service model would not be flexible and capable of meeting the varied needs of forces, and a desire to be assured that any collective approach would deliver sufficient benefit to justify constraining local decision-making.

1.6 Convergence options & assessment

The business case has assessed six options for developing a more collective approach to

shared service provision. In each instance the role of the centre in driving convergence and

standardisation would be different.

Option Description

Option 1: Do Minimum – Continued Force-led Convergence (baseline option for comparison)

Within this option, forces will continue to make changes to drive efficiency savings and improved effectiveness, with an expectation that this will develop organically as currently and at the pace and direction dictated by the individual forces. Plans for the delivery of services will continue to be developed at an individual force level or in groups, where appropriate. This option forms the baseline against which the other options are assessed.

Option 2: Influence/Facilitate Convergence

Within this option, convergence will be force-led, but with some national-level resources to help coordinate a collective approach to business support services. There would be a light touch central capability established with dedicated resources to maximise the benefits obtained through sharing of good practice, development of a collective approach to data sharing, and supporting user groups.

Option 3: Intervention Convergence

Within this option, convergence would be force-led but with a strong national facilitation role. A national capability would be established with dedicated resources to support individual forces in the delivery of shared services and building a strong national governance. Potentially this national capability would provide funding or other resource support to facilitate faster convergence, for business case or to buy out contracts etc.


Option Description

Option 4: Hybrid Approach to Convergence

Within this option, convergence would be similar to option 3 with one or two functional areas of national design e.g. vetting. This option could establish a unified and fully integrated business support service for some functions where there is clear evidence this would provide benefits. For all other areas, this option would establish central governance with dedicated resources to support individual forces in the delivery of shared services, and potentially provide funding or other resource to facilitate faster convergence.

Option 5: National Approach to Convergence

Within this option, convergence would be through a nationally-led design with strong central support to implement it. This option would design and establish a national approach to business support services that delivers to local, regional and national requirements as defined by the forces through a collaborative approach. This could include services delivered nationally and/or regionally, but to a common design and approach.

Option 6: Mandatory Convergence

Within this option, convergence would be mandated with a one-size-fits all technology solution for all functions (or for each function) with the timelines/pricing structure/vendor also being mandated as well as the approach i.e. ERP/best of breed.

Table 1.2: Description of Options

1.7 Recommendation

The six options were evaluated against the Critical Success Factors (CSFs) through both a qualitative and quantitative assessment. The qualitative assessment was based on feedback received in the regional workshops, input from APACE at a recent meeting and other 1:1 meetings (see Appendix A for details).

The quantitative assessment attempted to assess the additional costs and benefits of each option on top of the baseline. It focuses on the investment that would need to be made at the centre in order to gain both cashable and non-cashable benefits3 at force level. This investment revolves around a central capability, the format of which differs for each option. Assessing benefits is not straightforward for a number of reasons:

The baseline position is not static, and forces will continue to adopt shared services over

the next five years. To try and estimate the additional benefit, judgements had to be

made on the likely scale and pace of current plans.

Drawing a link between the costs and benefits of a more centrally-driven approach when

some costs will be incurred at the centre, but all benefits realised at force level, is also

not straightforward. For some options, it requires judgements on what the impact would

be on individual force decisions and their ability to implement change better.

Therefore, an assessment was done, using the survey returns, of the likely scale and pace of planned change for the baseline, followed by calculation of the level of benefit above the baseline which an option must deliver in order to breakeven. This means that each option has a range of possible benefits, and in reality, the option may deliver a combination of these.

3 No distinction has been made between cashable and non-cashable in this business case.


Because of the complexities outlined above, the economic analysis has focused heavily on the financial benefits rather than the wider economic benefits, such as staff time savings or impact on the front line.

Options 3 and 4 emerged as the preferred way forward, based on assessment against CSFs, and discussion in the workshops across England and Wales with all forces and PCC representatives. As option 4 could be implemented as an addition to option 3 at any time in the future, option 3 was selected as the preferred option at this stage. Option 3 or 4 can also be an important stepping stone to more radical convergence options. Appendix D now includes a high- level design of the proposed CoE.

In support of the selection of option 3 as the preferred option, an NPV analysis was conducted for options 1 and 3. This analysis initially estimated the NPV for option 3 to be £12m over the 10-year appraisal period, which is £8m over and above the do minimum scenario. However, it must be noted that this analysis was based on a number of assumptions which it was difficult to test. In later 2018, NCB received updates from forces on the latest progress on their current shared services programmes, assumptions were refined and the NPV figures were revised as follows: Option 3 NPV is now £2m-£41m over 10 years, representing £11m-£37m over and above the do minimum scenario.

1.8 Next steps

There are two key next steps for the programme:

1. Reflecting the below in a Full Business Case (FBC) - thereby

obtaining final approval and releasing funding for setup of the CoE:

Funding - develop final and detailed proposals for funding, in conjunction with the Police Commercial Organisation

Entity - agree and finalise proposal for the CoE to become part of the Police Commercial Organisation entity

Staffing - identify possible locations for the team to be based and begin stakeholder engagement. Draft job descriptions. Secure third-party support for initial projects.

Preparing for set-up – finalise and execute implementation roadmap and engagement plan.

2. Set the long-term ambition - explore and evaluate end-state police shared services

options in more detail - either as part of the FBC, or as a separate piece of work

delivered by the CoE once established.


#

CSFs

Option 1: Do Minimum – Continued Force-led Convergence

(baseline option for comparison)

Option 2: Influence/

Facilitate Convergence

Option 3: Intervention

Convergence



Option 6: Mandatory

Convergence

1

Accelerates scale, pace and effectiveness of convergence

Low

Low

High

High

Low

Low

2

Strategic Alignment

Low

Low

High

High

Medium

Medium

3

Value for money

Low

Medium

Medium

High

Low

Low

4 Is deliverable High High High Medium Low Low

5 Stakeholder Buy-in Low Medium High High Low Low

6 Mitigates strategic risks

Low Low High High Low Low

Low Medium High High Low Low

Table 1.3: Comparative assessment of option


Option 1 Option 2 Option 3 Option 4

Cost of Centre of

Excellence (in PV)

- £6.2M £9.6M £16.3M

Uplift in savings resulting

through Continuous

Improvement (CI)

Forces achieve 1% reduction across all

functional spend and future plans for

shared services

This would need to increase to 1.08% This would need to increase to c. 1.20% This would need to increase to 1.42%

Benefits from forces

achieving more benefits

from their planned shared

service arrangements

Forces achieve 20% reduction in functional

spend when they implement their plans for

shared services

This would need to increase to 21% This would need to increase to 20-25% This would need to increase to 25%

Benefits derived through

roll-out of a single

national service, such as

Payroll

- - - 3 national shared services would need to

be rolled out, delivering 25% savings on

the relevant functional spend from 2022/23

Table 1.4: Summary Benefits Assessment – Options 1-4

Table 1.5: Summary Benefits Assessment – Options 5 and 6


At the regional workshops, the forces were provided the opportunity to vote for their preferred options on the basis of the strengths and weaknesses articulated for each option. The forces were asked to rank the preferred 3 options, the results for which are summarised in the table below.

Options ranking

1st Choice

(weighting = 3)

2nd Choice

(weighting = 2)

3rd Choice

(weighting = 1)

Total Points

Option 1 6 3 10 34

Option 2 0 8 21 37

Option 3 26 18 8 122

Option 4 28 21 8 134

Option 5 1 12 9 36

Option 6 8 5 3 37 Table 1.6: Ranking of options at the regional workshops


2. Introduction

This Outline Business Case (OBC) establishes the case for driving convergence of enabling services across police forces in England and Wales. The purpose of an OBC is to gain commitment to the preferred option, start the necessary procurement processes and secure the funding required for the detailed design and Final Business Case (FBC) production.

2.1 Background and context

In 2017 the National Commercial Board (NCB) conducted an exploratory piece of work to inform the future direction of Shared Services in policing4. Analysis of The Chartered Institute of Public Finance and Accountancy (CIPFA) data suggested that there remained wide variations across policing in the average costs of support services, particularly in routine transactions. The discovery work also found significant variation in the use and nature of shared services across policing in areas such as finance, HR, procurement etc., and a lack of clear evidence that any particular model was demonstrably more effective than others. The work identified two priorities:

There should be a focus on forces moving to average transaction costs to deliver further

efficiencies and savings (estimated at £20m).

There should be a focus on encouraging greater convergence and standardisation

across delivery models and IT platforms.

This business case focuses primarily on the second objective and assesses the case for a more strategic approach to shared service provision of Enabling Services in policing in order to achieve more convergence and support delivery of the Policing 2025 Vision. The priority of this work has recently been emphasised in the spending settlement for the police, where, in return for more financial flexibility, the importance of the police demonstrating maturity and commitment to the police becoming more efficient has been emphasised. This case forms an important component for how policing will deliver on a target of £350m of efficiencies and specifically the remaining £120m of savings and efficiencies that need to be found by 2020.

The work has been undertaken fully mindful of the wide variety of current shared service provision in forces, where arrangements exist with both other forces and with local partners, such as local authorities and other emergency services. This presents limits on the likely desirability and achievability of a single “one size fits all” model for shared services for policing in the short and medium term.

Convergence and standardisation also raises questions about the appropriate balance between nationally-driven approaches to shared services and meeting local needs. For this reason, the options assessed in this case have explored options along a spectrum of increasing standardisation and national control, with a view to determining the optimum position, and one that is also consistent with the existing accountability framework in policing.

2.2 Functions in scope of the business case

The functions in scope of the OBC are human resources, finance, procurement, and learning and development administration & planning. The four functions were selected as each of them is enabled by adoption of an ERP solution, and they normally do form the core of a shared service arrangement.

There is separate work underway on the proposed Police Commercial Organisation, which focusses on the more strategic aspects of procurement including national co-ordination of commercial strategy, category management, supplier management and professional

4 Available on POLKA


development. In this business case, the benefits from the procurement function will come from efficiencies to be realised from transactional aspects of procurement.

There are other activities and workstreams within the NPCC that are already examining the reform opportunities attainable within other support services such as ICT, fleet, and property services. The restriction of scope to these “core” functions does not prevent forces from including wider services in their own shared service strategies or models, but they would not form the initial focus of support for greater convergence through any investment as a result of this business case.

Whilst the focus of this business case is on shared services, the activity proposed in each of the options, in particular standardisation and convergence, are likely to have a positive effect on forces without the need for them to adopt shared services.

2.2.1 Definition of Shared Services within Policing

For the purposes of this OBC, a “collaborative shared service” is defined as an activity where at least one force is working with other organisations to deliver common services, i.e. working across organisational boundaries. Such collaborations may be with other forces and/or with other public-sector organisations including, but not limited to, Fire and Rescue and Local Authorities.

A collaborative shared service arrangement may be delivered:

In-house (e.g. by one of the participants on behalf of the others), or

Outsourced (e.g. using a private sector delivery partner), or

A mixture of both.

For the purposes of this business case an arrangement where one force, by itself, is working with an outsourcing provider and/or a delivery partner to support the provision of services is not considered as a collaborative shared services arrangement. Nor is work undertaken within the force to centralise or integrate support service provision within the organisation. In developing and considering options, however, we have considered how this type of initiative can also benefit those organisations who do not have plans to enter into a shared service arrangement at this time.

2.3 Approach taken to the development of the OBC

Work on the Strategic Outline Business Case (SOBC) took place between January and April 2018 and has involved extensive information gathering and engagement with forces and PCC representatives, in order to get an up-to-date picture of current and planned activity on shared services. This included:

building a picture of the current shared services landscape by conducting surveys on the

sharing of services and corporate systems between and across forces. The response

rates for the English & Welsh forces for these surveys were 98% for shared services

survey and 93% for shared corporate systems survey.

providing an opportunity through regional workshops and an APACE meeting for forces

and PCC representatives to give feedback on the proposed approach and inform where

national efforts could add most value. Workshops were conducted for each of the nine

regions and were attended by 42 of the 43 forces and significant numbers of PCC

representatives. In total, 76 people attended the regional workshops.


conducting interviews with national stakeholders and specific shared service and system

vendors.

analysing CIPFA data on transaction costs for in-scope functions, and data from other

sources.

More detail on these activities are provided in Appendix A.

The SOBC was converted into an OBC during August 2018 by, in particular, incorporating more detail into the preferred option and the necessary procurement approach. This will allow a decision to be made and funding to be secured, for the detailed design and Final Business Case (FBC) production. Key changes agreed with the NCB were:

Removing Legal and Learning & Development Delivery from scope

Include examples of shared services and the benefits achieved from across the public

sector in the Strategic Case

Include more detail on the procurements required and the routes to market in the

Commercial Case

Include force-level costs of implementing shared services in the Economic & Financial

Cases

Include NPV analysis for the preferred option in the Economic Case

Include detailed set of next steps for the Management Case

A further update was made to this document in December 2018 to flesh out the design of the preferred option and revised cost and benefit figures following an update to the survey run in early 2018. The design outlines how the Centre of Excellence – that will enable the option recommended in this document - will create value and the mechanisms through which it will be delivered including the services delivered, resourcing strategy, staff roles and capabilities, funding legal status and governance. Further details on this design and updated costs and benefits can be found in 4.8 and section 4.6.2 to 4.8.2 respectively.

2.4 Structure of the document

This OBC has been prepared using the specifications within the HM Treasury (HMT) Green Book. The purpose of an OBC is to gain commitment to the preferred option, start the necessary procurement processes and secure the funding required for the detailed design and Final Business Case (FBC) production.

The approved format is the Five Case Model, which comprises the following key components:

The strategic case section: This sets out the strategic context and the case for change

for accelerating convergence of shared services, with a proposed statement of intent

and supporting objectives

The economic case section: This section presents and assesses six options on a scale

of increasing national intervention and standardisation, and recommends a preferred

option, which best meets the existing and future needs of the service and optimises

value for money


The commercial case section: This outlines what any potential commercial

arrangement for the preferred option might look like

The financial case section: This highlights likely funding and affordability issues and the

potential balance sheet treatment of the preferred option

The management case section: This demonstrates that the preferred option is

achievable and can be delivered successfully in accordance with accepted best practice.

Further detail is provided in appendices on:

The approach taken

Findings of the surveys and summary of the outputs of the regional workshops

Assumptions behind the cost and benefit assessment of the options.


3. Strategic Case

This section assesses the strategic context for action on shared services in policing. It summarises the existing landscape and plans for change and assesses whether there is a case for further change. It proposes a Statement of Intent and supporting objectives that have been tested in workshops with forces and PCC representatives, and also summarises potential strategic risks and constraints.

3.1 The strategic context

The need for a focus on enabling support functions in policing has been recognised in the Policing Vision 2025. This focus is an important enabler to deliver efficiencies and increased interoperability.

3.1.1 The Policing Vision 2025

The joint Association of Police and Crime Commissioners and National Police Chiefs’ Council’s Policing Vision 2025 sets out the service’s ambition to make transformative change across the whole of policing. It shapes decisions around transformation and guides the service in its use of resources to help keep the public safe and provide an effective, accessible, and value for money service that can be trusted.

The Policing Vision sets out that “by 2025 police business support functions will be delivered in a more consistent manner to deliver efficiency and enhance interoperability across the police service.”

To transform the enabling business support functions, the following key activities were highlighted:

Working with the Police IT Company to prioritise investment in developing common data standards and encouraging national approaches to technology investment

Providing business support functions, working to common standards, in a manner that realises greater economies of scale through consolidation into cross-force units

Enabling greater joint working between local authorities, emergency services and local police forces, including formal integration of back office functions

Delivering savings by undertaking more shared procurement.

The greater sharing and standardisation of enabling support functions can therefore deliver efficiencies, improved resilience and enable greater operational interoperability.

3.1.2 Spending settlement

As part of the funding settlement for policing in 2016/17, a target of £350m of procurement savings by 2020 was set by the Home Office. There remains a need to find £120m of savings and efficiencies, of which £20m needs to come from enabling support services, with a particular focus on driving down costs of transactional services to the national average.

The importance of achieving further efficiencies was recently re-iterated by the Home Office in its agreement to enable PCCs to increase the precept. In return for this increased flexibility, it was emphasised that policing needs to continue to seek efficiencies, especially in non-frontline functions. Delivery of a strategic approach to enabling services through a shared service model is seen by the Home Office as an important demonstration of maturity and commitment to policing becoming more efficient. The Home Office has also indicated that funding could be


available if required to accelerate this work. It is therefore necessary and timely to assess the case for a different approach to the adoption of shared services in policing.

3.1.3 The Government strategy on shared services

Policing also has an opportunity to benefit from the wider Government strategy on shared services. The Cabinet Office issued a Shared Services Strategy for Government in January 20185 setting a clear direction for the next 10 years. The strategy focuses on:

Driving value and efficiency – through splitting of technology and service, adopting cloud

software and through greater use of self-service, robotics and offshoring

Promoting convergence around processes and data – through consolidated technology platforms to support standardisation of processes and data, through the development of three platforms for government (Oracle, SAP and a third modern flexible platform), and through greater autonomy to departments to make decisions on agencies within their own family

Maximising efficiencies and improve end-user needs – establishing a series of end-user engagements/groups within a strategic governance structure that ensures end-user needs are responded to.

While the Government’s shared services strategy does not apply to policing, there are opportunities for policing to benefit from the learning to date from shared service implementation across the public sector.

Figure 3.1 below shows how value typically created by shared services, setting out the range of levers that are available to drive out value.6

5 https://www.gov.uk/government/publications/a-shared-services-strategy-for-government

6 *These figures are based on PA’s research on shared services which covers various shared services programmes delivered by PA for its clients


https://www.gov.uk/government/publications/a-shared-services-strategy-for-government

Business Services Leader Multi-functional Shared Services

Shared Services Leader

Functional Shared Services

Corporate teams

•

•

Separate and semi-independent functional

service teams. Lower unit cost of serve

Functional standardization

and simplification

No common service management

processes; Little sharing of efficiency

improvements across functions

•

•

Multiple functional Shared Services managed

under one roof, some shared assets and tools

Services and processes remain largely

functional with some integrated management

across vendors

Governed by a single leadership team

Joined up use of systems and data to improve

cross functional delivery. Alignment of process

and procedure reduces overhead

Lower total costs from shared infrastructure

Operates as a business, beyond back-office

Customer-centric services with

end-to-end processes

Single points of contact for all services

Integrated sourcing strategy

Improved user services by joining together

cross-functional capabilities into real business

solutions

Better management of demand, consumption

and further reduction in costs through

integration •

Level of ambition / risk

OPERATING MODEL INTEGRATION

Figure 3.1: Value created by shared services

Focussing more specifically on public sector projects, Figure 3.2 summarises the shared service and business transformation projects from the past 20 years and demonstrates what each of them have been able to deliver in value.

Shared Services

HM Prison Service Shared service to deliver finance,

procurement and HR across 128 prisons

2006 32% saving in staff costs NPV of £120 million over

the first 9 years

Forecast

NHS Joint shared business centre for over

100 health trusts

2005 20-30% cost saving on like

for like service

NPV saving of around

£250m over 11 years

Forecast

Department for Work

and Pensions

Shared services system 2006 15% cost saving in the first

year

£50m/unavailable Actual

Northumberland

County Council

Integration of 26 financial and

purchasing systems

2008 20% cost reduction

Reduction of 50 FTEs

£4million/unavailable Actual

Southwest One Joint Venture

Shared services infrastructure across 2 councils and a police authority

2007 30% saving on back office costs

£200million NPV savings over 10 years

Forecast

Jisc Digital shared service solution 2014 £259m pa saving across 149 HE members

Unavailable Actual

Anglia Support Partnership

Portfolio of services to over 25 organisations

2001 20% cost reduction Cumulative savings of around £25m

Actual

Berkshire Shared

Services

Combined finance and estates and

facilities services across a range of organisations

2001 3% year on year reduction

of costs Saving £750,000 on a budget of £6m (pro

rata) each year

Estimated

Cambridgeshire and

Northamptonshire

Shared Services

Shared ERP system combining finance, HR and payment

2007 £750,000 pa joint cost saving

£750,000pa savings

identified/£10m

baseline cost

Actual

Lancashire County

Council

Restructuring HR function 2004 25% cost saving

Reduction of 66 FTEs

Savings of

approximately £5m pa

Actual

National Savings and

Investment

Outsourcing of non-core functions 1999 Up to 60% reduction in

operational running costs

Unavailable Actual

Teachers’ Pension Scheme

Outsourcing 2003 48% reduction in cost base,

470 FTEs transferred

£8.1m pa saving/

unavailable

Actual

Figure 3.2: Summary of public sector shared service & business transformation programmes

3.1.4 Wider industry trends

More widely in industry, shared services have evolved from silo functional based to cross- functional integrated model, with each model characterised by its own benefits and the level of investment required. The three key models that exist today are detailed in the figure below:


GREATER VALUE THROUGH INCREASED SCOPE AND INTEGRATION

Integrated Shared Services

SC

OP

E

Be

ne

fits

Organisation Project Overview Date Benefits Total Saving/ Total Cost Forecast/Actual

Base Savings

Figure 3.3: Models of shared services

Other major trends observed in shared services across industry today include:

Expansion of shared services scope into core business areas and not just support

services

Higher integration across functions to deliver more value

A focus on “right-sourcing”, with a pragmatic assessment of the right degree of outsourcing to deliver value

Increasing use of automation (RPA, AI) to balance cost, flexibility and quality

Adoption of agile, cloud technologies to improve flexibility and service

More of standard outcome based metrics that drive harmonisation and integration.

As described in section 3.3 below, adoption of these trends in policing is variable and there is scope for greater maturity in their application.

3.2 Responding to the strategic context

In its pursuit of the Policing Vision, the Police Reform and Transformation Board delegated an objective to the NPCC Finance Co-ordinating Committee to develop a direction for the service on shared services and facilities (Objective 5.7). To deliver against this objective, the National Commercial Board (NCB), which reports to NPCC Finance, formed a dedicated workstream on shared services.

Initial discovery work conducted between February and May 2017, drew upon CIPFA data and conducted a survey of senior stakeholders in the support services. This initial work concluded that:

• There is a need for a more robust evidence base • A central body should be established to enable better sharing of good practice and

increased standardisation • There are opportunities for further cost-reductions in provision of support services • The NCB should champion better exploitation and convergence of technology to support

shared services.

Subsequent consideration by the NCB refined these recommendations into a number of key priorities:

• A focus on savings / efficiencies from all forces moving to average transaction costs for key finance, HR and procurement services, which could deliver £20m per annum benefits

• Development of a product to enable each force to calculate its targets • A greater focus on standardisation on a smaller number of i) delivery models and ii) IT

platforms.

As mentioned above it was also recognised that the evidence base available for the discovery work was limited and that more evidence was required to take forward any significant activities or justify a more prescriptive approach. The NCB therefore commissioned further work to produce this Outline Business Case for developing a longer-term strategic approach to adoption and convergence of shared services and establishing a national capability that can accelerate change.

3.3 The extent of shared service provision in policing

Enabling services consume £1 in every £5 spent on policing. Services in scope of this business case are a smaller proportion (14p in every £5) but still represent addressable spend of £352m a year. There is relatively extensive adoption of shared services in policing, but the picture is


varied and there is no one model that, from the evidence, is demonstrably more effective than others.

3.3.1 Current spend on support services

In accordance with the HMIC Value for Money assessment from the 2017/18 Police Objective Analysis data (POA), provided to HMICFRS by CIPFA, the total policing spend on the 43 forces in England and Wales was circa. £12.9Bn with support services7 making up £2.7Bn of this total which is equivalent to 21% of the total cost base, or £1 in every £5 spent on policing.

For the four functions (HR, Finance, Procurement, and L&D planning and administration) in scope of this business case, and which can be readily attributable to the POA data, the total spend was £350m, which equates to 2.7% of total force spend or 13.0% of the total support service spend. The addressable spend from enabling services in scope of this business case is therefore relatively low, but effective and efficient enabling functions can enable much larger benefits in terms of increasing the productivity of officers and staff and providing more effective support of operational policing.

How does this compare with other sectors? Commonly within any shared services arrangement the Finance and HR functions are usually where the greatest financial and performance benefits are realised. While meaningful comparison across sectors is often difficult, based on an assessment for this business case, police spend on finance is both lower than in the NHS or private sector, but higher in HR. This seems broadly correct, given that police financing requirements are generally less complex than in these other two sectors, but that HR issues are potentially more complex in policing, and the adoption of self-service and technology for transactional HR is relatively low.

These results indicate that the room for improvement is potentially greater in the HR function than within the Finance function.

Benchmark Parameters

Finance HR

Average NHS

Policing

Private Median Quartile

Average NHS

Policing

Private Median

Total Finance cost as percentage of total organisation expenditure

0.64%

0.52%

1.19%

Total HR cost as percentage of total organisation expenditure

0.70%

1.14%

0.24%

Table 3.1: Policing Benchmark Assessment against Public & Private Sectors8

3.3.2 Efficiencies delivered to date - findings from CIPFA analysis

Considerable emphasis has been directed by forces on managing budgets over the last few years, and this is reflected in the national 5% reduction in overall revenue expenditure between

7 Support Services costs within the POA data comprised of ICT spend, Estates, HR, Finance, Training, Performance review, Legal

services, Admin support, Professional standards, Fleet services, Press & Media, Procurement, Force Command, Support to associations and trade unions, social club support, Insurance and risk management and catering

8 NHS benchmarks obtained from “Corporate Service Data Collection for 2015-16”, 15 January 2018,

https://improvement.nhs.uk/about-us/corporate-publications/publications/foi-corporate-services-benchmarking-report-data/ Private sector benchmarks from PA’s database based on client data and information received from APQC


https://improvement.nhs.uk/about-us/corporate-publications/publications/foi-corporate-services-benchmarking-report-data/

2013 and 2017. Focusing in on Enabling Services however shows a 5% increase in expenditure during the same period.

This increase is driven by cost increases in:

Information Communications Technology

Professional Standards

Corporate Development

Legal Services

Insurance/Risk Management.

Taking the four functions in scope of this business case only, there has been an increase in expenditure on these functions between 2013 and 2017, caused mainly by Learning and Development increases. There were cost reductions for HR (4%), Finance (26%), and Procurement (11%). As discussed later in this Strategic Case, these three functions are those which form the majority of shared services currently in operation.

This analysis, which was based on the Police Objective Analysis data, looked also at the change in revenue expenditure for HR, Finance and Procurement, for those forces which have a shared service in at least one of these functions. This demonstrated a reduction of 9%9,

compared to a reduction of just 1% for those forces with no shared service in these functions.10

It should be noted, however, that the data does not provide sufficient information to determine the cause of any increase or reduction in revenue expenditure, as it is not linked to when shared services were introduced, and therefore no firm conclusion should be drawn from this dataset as to the direct effect of shared services on revenue expenditure.

During the Phase 1 analysis, transaction costs were established across each force using the CIPFA Benchmarking data. Transactions costs, along with other transaction characteristics, were specifically requested by this survey. Metrics were compared force-to-force and through averages and categorised by size of force and service delivery method.

Figure 3.4: Force transaction costs for payroll by service delivery method

The evidence from this analysis would suggest that there is no particular service delivery method that demonstrably provides a lower transaction cost, relative to using alternative Service

9 30 forces have a shared service arrangement in one or more of HR, Finance and Procurement.

10 13 forces


Delivery methods for the same function. For all functions in scope, a wide variation in transaction costs can be observed, both when comparing forces against each other and in terms of service delivery method.

Comparisons and assessments of different models are particularly difficult due to the inconsistent approach to data, the variability of what activities are in or out of scope, and the lack of end-to-end perspective in relation to those functions which are retained. As a result, caution should be taken in making major decisions based solely on this evidence. There is a clear need for a more consistent approach to data and the development of business cases for shared services.

3.3.3 Take-up of shared services to date

There is already relatively high adoption of shared services in policing. In total, 28 of the 43

English and Welsh forces share at least one of the in-scope services with either another force or

another public-sector organisation. However, as can be inferred in the table below, there are still

a large number of in-scope services that are not shared. Shared service arrangements exist

in other functions, such as fleet and ICT, but these are not within the scope of this business

case.


Number of forces sharing 25 25 20 23

% of forces sharing 58% 58% 47% 53% Table 3.2: Number and percentage of forces in shared service arrangements

The largest shared service arrangement11 in Finance / HR (by number of parties involved) is the

Multi-Force Shared Service arrangement (MFSS), which enables Cheshire, Northamptonshire,

Nottinghamshire and the Civil Nuclear Constabulary to share transactional services within

finance, HR and procurement functions. It is the only arrangement where additional forces have

subsequently joined a shared service function rather than being a “founding” force. Several

other forces are also considering joining MFSS.

The next largest in terms of number of forces involved is the shared services arrangement

between Bedfordshire, Cambridgeshire and Hertfordshire where these three forces are sharing

their procurement and HR functions.

When taking the number of staff supported by a shared services arrangement, the largest for

arrangements involving police forces only is MFSS and for arrangements involving police and

other public sector bodies it is SSCL (which MPS has joined).

The headline figures hide a more complex and variable picture of shared service adoption.

Variability in functions under shared services

While it is most common for Finance & HR services to be shared, there is wide variety in the

size of shared service arrangements between forces (Table 3.3). Looking specifically at force-to-

force shared services arrangements, Finance, HR and L&D tend to be small configurations of

groups, while larger groups are found for Procurement functions.

11 Largest by number of forces participating.



5 forces 0 0 0 1

4 forces 0 0 0 1

3 forces12 1 2 1 2

2 forces 5 6 6 2 Table 3.3: Number of shared service arrangements by function and number of participating forces.

Variability in maturity of adoption

29 of the forces considered themselves having extensive or small-scale implementation of

shared services either with other police forces or other organisations (Figure 3.2).

Figure 3.2: Extent of shared service implementation in forces

Of these forces, the majority rated elements of their shared services as ‘mature’ or ‘more

mature’ (Figure 3.3). According to forces, areas of highest maturity relate to people capacity and

business alignment, but lowest maturity is in exploiting technology.

12 The Civil Nuclear Constabulary – part of MFSS – are not a geographic English & Welsh force, and so are not included as a force in this total


Figure 3.3: Force maturity self-assessment

To supplement self-assessments, forces were also assessed based on 4 maturity criteria

(Figure 3.5). This survey was sent to those forces13 that had either extensive or small-scale

implementations of shared services (Table 3.4).

Figure 3.4: Shared service maturity assessment criteria

The survey found that a majority of forces had facets of a shared service arrangement

according to the above criteria. The most common facet was shared staff, and the least

common were single leadership and common processes, policies and procedures.

Single

Leadership

Common

Processes,

Policies and

Procedures

Shared staff Shared IT

system

Number of forces meeting

criteria

13 13 16 15

13 20 forces responded to the maturity survey.


Maturity of shared services operations

30

25

20

15

10

5

0

Process People capacity Facilities arrangements

Business alignment

Less mature More mature

Single Leadership

Common Processes, Policies & procedures

Sharing of Staff

Sharing of IT systems

Future plan to share services

14

12

10

8

6

4

2

0

No Plan Considering Planning N/A

Percentage of forces

meeting criteria

65% 65% 80% 75%

Table 3.4: Summary of force shared service maturity assessment

This finding suggests that there are opportunities for increased benefits by advancing the

maturity of existing shared service arrangements. Combined with a further survey finding that a

majority of forces were either considering or planning to expand shared services (

Figure 3.5), these points suggest that there are emerging opportunities for greater convergence

and standardisation of shared services.

Figure 3.5: Future plans by number of forces


Technology adoption

The technology landscape for in-scope functions14 is illustrated in the graphs below.

Figure 3.6: Finance systems by number of forces

Figure 3.7: HR systems by number of forces

14 This assessment excludes legal services.


Finance Systems

12

10

8

6

4

2

0

HR Systems

12

10

8

6

4

2

0

Figure 3.8: Procurement systems by number of forces

Figure 3.9: L&D systems by number of forces

The graphs above indicate that across the four functions Oracle and Oracle-based systems are

most frequently used by forces. In addition, forces have congregated around fewer number of

systems for the Finance function, whereas the market is more diverse in HR, L&D and

Procurement. The maps below illustrate the geographical distribution of systems by function.


Procurement Systems

12

10

8

6

4

2

0

L&D Systems 10

9

8

7

6

5

4

3

2

1

0

Figure 3.10: Map of finance systems by force

Figure 3.11: Map of HR systems by force


:

Figure 3.12: Procurement systems by force

Figure 3.13: L&D systems by force


For Finance and HR, this research shows that forces are more often sharing systems than they

are sharing services.

Adoption of cross-functional ERP systems is also increasing, with many forces having a

common IT platform for their Finance and HR functions. More specifically, 16 forces share

finance functions with either other forces or public sector organisations, while 26 forces share

finance systems. For HR, 22 forces are in a form of shared service, whilst 24 forces share an

HR system.

There is wide variation in the way systems are configured and deployed, especially in terms of

the level of self-service functionality made available. The emergence of cloud based systems

and rise of automation and system integration solutions provide some further interesting

opportunities to forces.

As contracts with system vendors near their end-dates there are naturally occurring opportunity

points over the medium- term. A large proportion of contracts for finance systems, for example,

are due to expire in less than 3 years, not including annually rolling contracts.

Figure 3.14: Finance system contract end dates by force

3.3.4 Benefit realisation to date and limitations

As described above, analysis of the CIPFA benchmarking exercise showed no clear evidence

that one service delivery model was better than another. Analysis from the surveys for this work

also found that no one model or system scored higher in terms of satisfaction.

The main reason reported in the survey for establishing a shared service is cost reduction. This

is followed by optimising resource utilisation and raising the overall service quality. However, of

those forces that share services, it was found that the financial benefits of shared services

varied (Figure 3.15). In other words, the anticipated benefits as set out in the business case have

not always been achieved.


Have shared services arrangements delivered the benefits expected in the business case?

7

6

5

4

3

2

1

0

<25% 26-50% 51-75% 76%-100% >100% Different benefits

Figure 3.15: Percentage of benefits achieved by number of forces15

There are examples from individual forces of benefits that have been delivered from shared

service implementation.

Within the MFSS arrangement, Cheshire reported total savings of £7.38M between joining the

shared service in 2009 and 2014. Civil Nuclear Constabulary, which is also a participant in

MFSS, reported having realised the following qualitative benefits:

Increased self service functions available to all users

Increased flexibility to alter the size of the service in a cost effective

Increased future efficiency and effectiveness of the ERP system through use of new technology and shared services.

However, a number of forces have considered MFSS but decided not to join, for a variety of factors. For smaller forces there is a concern regarding onboarding costs. Larger forces do not consider the onboarding and ongoing costs to be better than the costs of running these functions in house and leveraging their own internal economies of scale.

Other forces have delivered savings through transformation of enabling services without

adopting shared services.

West Midlands have forecast £38M of cashable benefits over 10 years associated with their

shared services transformation programme. The programme is in year 3 and on track to deliver

the forecast benefits. The programme follows previous reform work in 2013 which reduced the

cost of internal shared services by £10m. This current transformation programme is being

achieved by a reduction of 450 FTEs through centralising their internal shared services;

replacement of all their core business systems to cloud-based Oracle system; a move to

process which are standardised across the organisation and meet industry standards; and the

use of data to predict demand.

Analysis and engagement for this business case has highlighted a number of limiting factors

that can constrain adoption of shared services and realisation of benefits. These include:

15 National Shared Services in Policing Survey


1. Differing processes, policies and procedures – inconsistencies with finance and HR

policies and procedures between forces have prevented forces from converging on

shared systems and services or achieving significant benefits unless they are

addressed.

2. Perceived loss of control – there is a concern that shared services will result in loss of

control and reduced flexibility. The convergence to a shared service platform was seen

as a taking away that level of control for things that they are accountable.

3. The lack of evidence – the forces pointed to the lack of compelling evidence to the

achievement of savings and efficiencies through the establishment of shared services.

There is also a lack of comparable data or agreed common measures for assessing the

effectiveness of enabling functions. A more compelling evidence base is required.

4. Limited capacity and skills – some forces cited circa. 90 national and local

programmes within policing currently. With a limited number of resources available to

deliver these, there is a risk that changes to support services become lower priority or

are delivered in a sub-optimal way due to lack of sufficient capacity or capability. They

also pointed to the lack of central capability from which to obtain good practice and the

relatively lower profile given to this area of policing business compared with other

national operational and technology programmes.

5. Local resistance – shared services can be perceived as taking jobs out of local areas,

which can be controversial. There is therefore more interest from forces wishing to

provide shared service for other forces than to take services from forces.

The challenges outlined above are not significantly different from what wider public sector and

private sector organisations’ experience while designing and implementing shared services. It

has been observed16 that over the last 20 years many organisations have adopted shared

services with the aim of improving the performance of their business support functions. All have

embarked on the significant changes required with high expectations – yet the reality is that only

50% have/will achieve what they hope for. For the other 50%, benefits realised will fall short of

expectations. When compared with the wider public sector and private sectors, our assessment

is that policing is behind in terms of shared services journey and it has an opportunity to learn

from the organisations that have matured in shared services and are most satisfied with the

benefits they had realised through shared services. These organisations usually adopted all/mix

of following four key strategies for creating high-performing shared services:

1. Extended service scope and reach

2. Balanced sources of service delivery

3. Integration across functional silos

4. Adoption of a professional change approach.

3.4 Plans for further adoption of shared services and other improvements

Research during Phase 1 surveyed force’s future plans with regards to shared services shows:

16 https://www.paconsulting.com/insights/the-5050-gamble-winning-with-elite-shared-services/


https://www.paconsulting.com/insights/the-5050-gamble-winning-with-elite-shared-services/

Functions in

Scope

Forces planning to implement shared

services for some functions

Within

3 years

After

3 years

HR 14 11

Finance 16 10

Procurement 11 4

L&D 6 3

Table 3.5: Force future plans for shared service implementations

Table 3.5 above shows the number of forces which have plans to implement shared services in some part of the functions in scope17. Some forces may be planning shared services across more than one function, and these numbers may include forces which already have shared service arrangements in place for other functions.

Twenty-four forces have also reported plans for the adoption of a shared system within the next 3 years. For example, Sussex, Surrey and Thames Valley Police will be adopting the Microsoft platform as their shared ERP and have ambition to onboard new forces. West Yorkshire and Merseyside are planning to procure an ERP later this year. This shows that there is significant opportunity for forces over the next three years.

3.5 Case for change

Analysis of the current and planned provision of shared services therefore indicates:

A continued strategic imperative to improve enabling services, both to deliver further

value for money but also to support wider policing objectives and achieve resilience

Relatively low addressable spend but opportunities for improvements in support services

to enable wider benefits

A complex picture of current provision, with many different models in existence, which

indicates complexity in developing a shared service model across policing but also

opportunity

Indications that forces with shared services have reduced costs more than those without

in recent years, but insufficient evidence that one delivery model is most effective or

suitable for all forces, or that shared services is necessarily the right solution for all

forces

There is potential for improvement and achievements of further benefits. There is

relatively low technology adoption, and variability in maturity and transaction costs. Many

forces plan for adoption of shared services or other initiatives to improve enabling

services more broadly, indicating a window of opportunity

However, there are limitations in forces’ ability to implement these changes effectively,

which suggests risks that potential benefits will not be fully realised.

17 The survey in Phase 1 was based on the detailed POA structure which breaks down functions into a number of sub-functions. A

force was counted if it had plans for a shared service in at least one sub-function.


The current approach to shared services has been organic and driven by the need for change from individual forces, and consequently:

Implementation remains driven by the individual forces and is relatively small-scale

There are still significant variations in processes, systems and costs across shared services

The implementation of shared services in policing has had mixed success

Pace and direction of change without central intervention may not be rapid or consistent

enough to deliver the vision.

These shared services are often dependent for success on relationships and trusts that are already in existence amongst neighbouring forces and established through Section 22 collaboration agreements. These can be fragile when personnel or local priorities change, and governance can be cumbersome if collaboration grows beyond a certain size. This approach has led to lack of ability to be strategic in the market, with no user groups/communities having been formed, and no joined-up commercial approach to supplier management being taken to get better buying power.

Funding for change is typically met from those forces moving to shared services themselves and no transformation funding in the last round supported support service transformation. There is a risk, therefore, that initiatives that could be in the interest of policing in general are not taken forward due to lack of funds within individual forces. For example, work to develop a governance model that could support wider adoption of existing shared service models would need to be paid for by those forces, whereas it could benefit policing more widely.

With no repository of good practice, forces are also at risk of re-inventing the wheel, when they could benefit from sharing of lesson learnt through their respective analyses and implementations. The lack of comparable data is also making it difficult to compare performance or drive common standards and policies across policing that can support operational convergence.

3.5.1 Appetite for change

For the engagement as part of this work, consultations were done widely with forces and PCC representatives. There was broad consensus of the need for change and a different approach to development of shared services or wider reform to enabling services than the current force-led organic approach described above. There was also broad support for a more collective approach to shared services across policing, which can improve resilience, support to frontline policing, and achieve further value for money.

As part of the survey, forces were asked what type of shared services assistance from the centre would be of benefit. Assistance to encourage force standardisation, collation of best practice, and facilitation of collective procurement exercises were most commonly highlighted. These points suggest that forces have an appetite for greater convergence of shared services if the requisite support is available.

There was also caution expressed by some, typically from larger forces, that shared service models are not necessarily suitable for all forces, a concern that a one-size-fits-all shared service model would not be flexible and capable of meeting the varied needs of forces, and a desire to be assured that any collective approach would deliver sufficient benefit to justify constraining local decision-making.


3.6 Emerging ‘Statement of Intent’ for shared services

Based on the analysis above, and in consultation with forces and PCC representatives, a proposed Statement of Intent was developed for any investment in supporting shared services. This has been tested at the workshops and received broad support. An initial draft was adjusted to take on board the feedback from the workshops.

Figure 3.16: Emerging 'Statement of Intent' developed jointly with the forces

This statement outlines the intended high-level approach within the programme to deliver the Police 2025 vision.

This can be translated into a set of investment objectives that options in the economic case will be assessed against:

1. Enabling broader and deeper collaboration with other UK police forces and public

sector organisations through rationalisation of delivery models

2. Improving services and adoption of good practice through accelerating

standardisation of services, business processes, policies, data, and performance

levels

3. Achieving faster convergence around a smaller number of supporting business

systems, better supplier management & better exploitation of innovation e.g.

automation and self-service

4. Aligning, where appropriate, with the central government shared service strategy to

achieve wider service and cost benefits

5. Laying the foundation for significant long-term savings and reducing average

transactional costs in the short term.


3.6.1 Main benefits

Whilst the initial driver for this business case is centred on the possible financial savings, meeting the investment objectives will also impact on the quality of service delivery and operational resilience:

Fewer, proven delivery models and a more standard approach to delivery of services

improves the forces’ ability to congregate around single IT platforms, share staff and

deliver desired outcomes. This can reduce costs, improve resilience and also better

support operational collaboration and effectiveness

A more strategic approach to supplier and category management could lead to improved

SLAs and lower licensing costs or total costs of ownership.

3.7 Strategic risks

The strategic risks that the project include:

Failure to secure support from both forces and PCCs

Erosion of force accountability as NPCC role develops

Formal investment funding routes not identified

Potential for political and public resistance to changes as local employment profile

changes

Increased complexity of sharing services across large number of forces and reduction in

speed of change at local level.

3.8 Constraints and dependencies

Successful delivery of the Statement of Intent depends on the following factors:

The programme of work is within the existing police accountability framework, funding

arrangements and legislative framework.

The programme of work will operate within the priority level set amongst the other national programmes in flight.

3.9 Conclusion

This Strategic Case outlines the case for establishing a collective approach to shared services within policing. In order to achieve the required efficiencies and enhance interoperability across the police service, policing need to converge around a limited number of shared services operations and systems.

While some progress has been made towards achieving this, the current approach to shared services implementation remains driven by individual forces’ need for change and is relatively small-scale. Consequently, there is still significant variation in processes, systems and costs across current shared service arrangements. The maturity and performance levels (e.g. transaction cost) of shared services across forces also varies considerably, regardless of whether they are part of a shared service.

Recent implementation of shared services in policing has seen mixed success and there are still some forces which have no plans for shared services. The pace and direction of change without


central intervention may not therefore be rapid or consistent enough to deliver the Policing Vision 2025.

There are a number of options which can be pursued in order to meet the ministerial target. Importantly, there is an appetite amongst forces for establishing further convergence and efficiencies, and a recognition that they need support from the centre in order to achieve this.

The next section sets out the options available to address this need for change resulting in a recommendation for the preferred option.


4. Economic Case

4.1 Introduction

The National Commercial Board shortlisted six options for driving a more collective approach to shared service provision. The options cover the whole spectrum from a ‘Do Minimum’ option, in which there is no role for the centre in driving convergence and standardisation for enabling services, to an option in which all enabling services being delivered by the centre on a mandatory basis. This Economic Case assesses each of the options against key criteria and identifies a preferred option. It subsequently assesses the expected NPV for the preferred option and shows how much additional value it delivers over the ‘Do Minimum’ option.

4.2 Critical Success Factors

Building on the investment objectives outlined in the Strategic Case, the Critical Success Factors (CSFs) are the attributes considered essential to ensure a successful delivery. These are set out in Table 4.1 below.

CSFs Description


Option can accelerate and enable more effective collaboration and rationalisation of delivery models and convergence of systems laying the foundation for significant savings to be achieved

Option can accelerate and enable broader and deeper collaboration with other forces as a result of standardisation

Strategic alignment

Alignment to Statement of Intent and extent likely to deliver

Alignment to Policing 2025 vision

Alignment to policing accountability framework

Value for money Contribution to ministerial savings target of £20m

Estimated NPV and RoI

Deliverability The convergence options can be implemented

successfully

Stakeholder buy-in

There is support from stakeholders (forces, PCCs and the Home Office) towards making the convergence option a success

Mitigates strategic risks

The option can mitigate strategic risks

4.3 List of options

Table 4.1: Critical success factors for the project

Through consultation with senior stakeholders within the NCB, six options have been created for consideration:

Option 1: Do Minimum – Continued Force-led Convergence (baseline option for

comparison)

Option 2: Influence/Facilitate Convergence

Option 3: Intervention Convergence



Option 6: Mandatory Convergence.

These options, which are described in more detail in Figure 4.1 below, focus primarily on the level of intervention that the NPCC could perform to deliver greater convergence or acceleration of benefits. The options have been discussed with senior representatives from the NPCC, chief officers and PCC representatives from forces through the regional workshops, during which endorsement for this shortlist was received. The following sections outline how these six options score against the CSFs, provide an economic analysis of each option, and identify the preferred option to take forward for further assessment.

4.4 Approach to comparative analysis of the options

The six options identified in Section 4.3 have been evaluated against the CSFs through both a qualitative and quantitative assessment.

The qualitative assessment has been based on feedback received in the regional workshops, input from APACE in meetings during the SOBC work (see Appendix A for details).

The quantitative assessment has attempted to assess the additional costs and benefits of each option on top of the baseline. It focuses on the investment that would need to be made at the centre in order to gain both cashable and non-cashable benefits18 at force level. This investment revolves around a central capability, the format of which differs for each option. Assessing benefits is not straightforward for a number of reasons:

The baseline position is not static, and forces will continue to adopt shared services over

the next 6 years. To try and estimate the additional benefit, judgements had to be made

on the likely scale and pace of current plans.

Drawing a link between the costs and benefits of a more centrally-driven approach when

some costs will be incurred at the centre, but all benefits realised at force level, is also

not straightforward. For some options, it requires judgements on what the impact would

be on individual force decisions and their ability to implement change better.

Therefore, an assessment was done, using the survey returns, of the likely scale and pace of planned change for the baseline, followed by calculation of the level of benefit above the baseline which an option must deliver in order to breakeven. This means that each option has a range of possible benefits, and in reality, the option may deliver a combination of these. Because of the complexities outlined above, the economic analysis has focused heavily on the financial benefits rather than the wider economic benefits, such as staff time savings or impact on the front line.

18 No distinction has been made between cashable and non-cashable in this business case.


Figure 4.1: Role of the Centre for the Convergence Options


The assumptions used in the cost and benefits calculations are listed at Appendix B.

4.5 Baseline

There are a number of forces delivering services through a shared service arrangement or adopting automation and self-service to deliver improved services at a lower cost. The shared service survey also outlined significant plans for adoption of shared services to deliver future services within the next 6 years. This should affect further savings as a result of this ambition. It is important, therefore, to recognise that further savings are likely to happen without any change as a result of this business case. Benefits from the options in this business case need to additional to the baseline level of improvement.

The baseline has been calculated based on savings estimated from:

1. Continuous improvement of current shared service arrangements

2. Benefits derived through the implementation of planned shared service arrangements.

Current Shared Services: For existing shared service arrangements, it has been assumed that there is an annual trend of continuous improvement equivalent to 1% of the revenue expenditure for the functions in

scope19.

Planned Shared Services: In the survey conducted in Phase 1, forces reported which sub-functions they planned to move to a shared service in a) the next three years and b) three years plus. The benefits derived from the implementation of these plans is based on the revenue expenditure for the sub-functions.

Benchmark benefits for public sector organisations adopting shared services is 25%20, and some current policing shared service arrangements have reported up to 44% benefits. However, a lower range of 15% to 20% estimate has been used for this baseline given the complexities in the policing.

It has also been assumed that planned shared services will gain further savings through continuous improvement after the first two years of operation at a rate of 1%, leading to c. £86m estimated benefits over 10 years. This figure was used in the previous version of this OBC back in September 2018.

These benefit figures were then further refined based on the latest updates (as at November 2018) from forces – where 19 and 23 forces provided the latest data on Shared Services and Corporate Systems landscape respectively. The latest estimate is £69m to £82m as shown below. The decrease was mainly due to some set-backs in current shared services initiatives (e.g. Avon and Somerset).

19 CIPFA POA Data 2017

20 PA Consulting research on shared services


Table 4.2: Breakdown of Estimated Baseline Benefits (High)

Table 4.3: Breakdown of Estimated Baseline Benefits (Low)

The costs associated with delivering these baseline benefits would be borne by individual forces. They were initially estimated to be £82m over the next 10 years in the previous version of this OBC in September 2018. This figure has now been revised to £78M. The decrease is mainly due to withdrawal of Avon & Somerset from shared services initiatives. See Table 4.4 for the detailed breakdown of costs by categories. The key assumptions underpinning these costs are as described in Appendix B.

Table 4.4: Baseline Costs

This latest view estimates that, with no central intervention, forces could potentially achieve annual net benefit of -£9m to £4m over 10 years.

4.6 Option 1: Do Minimum

Within this option, forces will continue make changes to drive efficiency savings and improved effectiveness, with an expectation that this will develop organically as currently and at the pace and direction dictated by the individual forces. Plans for the delivery of services will continue to be done at an individual force level or in groups, where appropriate. This option forms the baseline against which the other options are assessed in this Economic Case (as described above).

There would be no central capability with this option. Instead the forces would continue to share information with each other and collaborate where needed. This option is unlikely to deliver nationally-guided sharing of systems, market-making or technology.

Under this option, the NPCC would do the following:


Continue to provide information on what policing forces are doing by sharing information

through POLKA or other sharing platforms

Will conduct ad hoc initiatives to promote greater visibility of a forces performance with

the view to drive improvement.

There would be no major initiatives or support provided by the organisation with little sharing of information amongst forces.

4.6.1 Analysis of Option 1

This option scored ‘Low’ against the CSFs. The assessment is shown below in Table 4.5.

#

CSF

Option 1: CSF Assessment

Rationale for Assessment

1

Accelerates

scale, pace and effectiveness of

convergence

Low

Under this option the forces would continue to deliver convergence organically at the current planned rate. A number of forces have outlined changes they intend to make in the near future through further consolidation and collaboration. However, for forces new to shared service arrangement, there is likely to be:

Repetition to the steps performed by other forces as each project will have limited input from lessons learned from others

Limited standardisation

A focus on shared services more locally, limiting the achievable benefits from wider shared services

These contribute towards a likelihood that limitations and issues identified in the Strategic Case will not be addressed effectively or with any acceleration. It is for this reason that this option has been assessed as ‘Low’ against this CSF.

2

Strategic alignment

Low

This option is consistent with the current accountability arrangements in policing. A number of forces have also outlined their intention of changing to a shared service arrangement, or technology adoption. This option would enable forces to continue to change at their own pace and according to their needs. However, forces more widely will not be benefitting from economies of scale or enabling the broader aims of the Policing Vision than what is currently planned. It is for this reason that this option has been assessed as ‘Low’ against this CSF.

3

Value for money

Low

Our estimate of the baseline indicates that the existing plans are on their own, forces are far from reaching the £20M pa savings target. The net benefit of delivering the shared services is relatively low over the 10-year period. This is because the benefits delivered are 15%-20% of savings on functional spend, rather than the 25% average benchmark for public sector, as planned projects cannot draw on learning or expertise from previous similar projects.

4

Deliverability

High

This option requires no intervention or central capability other than what exists today and therefore can be predictably delivered without any change and therefore has scored ‘High’ in this evaluation.

5

Stakeholder buy-in

Low

At shared services regional workshops some of the larger forces preferred this option as they were already realising benefits from economies of scale and some had undertaken extensive internal transformation without adopting shared services. However, the smaller/medium forces believe that the current arrangements are not enough to help them achieve real benefits and they will benefit from additional support through greater sharing of transactional activities, sharing of best practice, guidance, lessons learnt etc. Some force representatives suggested it would have the least disruption to forces and allow them to retain their autonomy. However, it was also recognised that this option risked continuing lack of standardisation. Table C.1 in Appendix C summarises the strengths and weaknesses for this option as assessed by stakeholders.

This was not a preferred option. It is for this reason that this option has scored ‘Low’ for stakeholder buy-in.

6

Mitigates

strategic risks

Low

This option is unlikely to reduce the risk associated with the following:

Ministerial mandating

Benefit accountability

Skills & capability to support change

Lack of engagement from police forces due to other priorities This option has therefore scored ‘Low’ against this CSF.


#

CSF



Overall Rating

Low

Table 4.5: Option 1 assessment against the CSFs

4.6.2 Cost of Option

Under Option 1 there is no central influence or investment from the centre and it is recognised that the forces will continue to invest as they do today. There is therefore no additional cost to this option above the baseline.

4.6.3 Benefits of Option

As Option 1 does not involve any investment in a central capability, there are no additional benefits to this option above the baseline which is created by continuing with the status quo.

4.7 Option 2: Influence/Facilitate Convergence

Within this option, convergence will be force-led, but with some national-level resources to help coordinate a collective approach to business support services. There would be a light touch central capability established with dedicated resources to maximise the benefits obtained through sharing of good practice, development of a collective approach to data sharing, and supporting user groups.

The central team will provide guidance and suggestions to move towards common systems and technology, based on analysis of the as-is landscape, especially where there are synergies in combining contracts or moving to the same supplier, and in so doing help forces to shape their vision for the future by providing information on the 'art of the possible'. Therefore, the planning of service delivery within the forces will be influenced by the collective approach.

The types of key activities that would be performed by the centre under this option, in addition to those carried out under option 1:

Create repository of shared services good practice and provide advice to support forces

in developing and optimising shared service arrangements

Execute small scale projects to support development of shared services to common

approaches

Support work to develop more common policies and procedures

Obtain data and collate evidence to inform appropriate technology options in shared

services

Develop standards for technology across policing

Create user groups for forces using common systems to share process knowledge

Provide reporting templates (e.g. financial reporting) that allow accurate and standard

management information across policing.



This option also scored ‘Medium’ against the CSFs as a result of the details assessment is outlined in Table 4.6.

#

CSFs



1

Accelerates

scale, pace and effectiveness of

convergence

Low

The forces would continue to deliver enabling support services as they see fit. However, there would be opportunities for these forces to share good practice, lessons learnt and develop collective approach to support organisational decision on how best to deliver services. The forces have outlined a number of national programmes that they are also delivering which may limit the resource availability to support the shared services programme. This option will not provide significantly more resources to help forces mitigate these issues. Collation and sharing of best practice, while having benefits, may not a create critical mass for change and it would not be substantively different from the current situation. It is for this reason that this option has been assessed as ‘Low’ against this CSF.

2

Strategic Alignment

Low

The proposed approach would make some contribution to achievement of the Police Vision, but convergence and standardisation is likely to be slow. It is for this reason that this option has been assessed as ‘Low’ against this CSF. It would remain consistent with the policing accountabilities and PCCs and chiefs would continue to be able to determine approaches that meet local needs.

3

Value for money

Medium

The cost for the centre under this option is £6.2M over the 10-year period. To achieve a return on investment, a small amount of additional benefit is required. (see Table 4.8) However, given the small scale of central resource, it is not likely that it could produce a significant acceleration of benefit from the baseline position. It is for these reasons that this option has scored ‘Medium’ against the VfM CSF.

4

Deliverability

High

This option would require a small central capability of 2-3 people who would be responsible for collecting and disseminating best practice information, along with some external support for specific projects. With police having established large bodies of organisations for other programmes such as Transforming Forensics, delivery of such a small capability should not pose a risk and therefore this option has scored ‘High’ in this evaluation.

5

Stakeholder

buy-in

Medium

In the regional workshops, this option did not receive a significant amount of support. While benefits in sharing good practice were recognised, most saw this as not providing sufficient momentum and potentially being a more expensive way of doing what happens now. It was seen, however, as a potential stepping stone and first step for a more significant central capability. Table C.2 in Appendix C summarises the strengths and weaknesses for this option as perceived by stakeholders. This option has therefore been assessed as ‘Medium’ for stakeholder buy-in.

6


Low

This option like option 1, is unlikely significantly to reduce the risk associated with the following:

Ministerial mandation

Benefit accountability

Skills & capability to support change

Lack of engagement from police forces due to other priorities This option has therefore scored ‘Low’ against this CSF.

Overall

Rating Medium



The additional costs of this option would be £6.2M, covering central staff of 3 FTE, and the external support to deliver three small projects a year. The key assumptions underpinning these costs are as described in Appendix B.


£000s 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 Total

PV Costs Central Staffing 260 249 238 228 218 208 199 191 182 175 2,148

External Support 452 437 422 407 394 380 368 355 403 397 4,014

Other 9 0 0 0 0 8 0 0 0 0 17

Total Cost 721 685 660 635 612 596 567 546 585 572 6,179

Table 4.7: Option 2 Costs

4.7.3 Breakeven Analysis of Option

This analysis estimates the activity which the centre needs to be able to influence to return a cashable benefit. The minimum amount of additional benefit which would need to be delivered to recover the investment costs in the central resource are as follows:

Benefit Category21 What the centre would need to deliver

Uplift in savings resulting through Continuous Improvement (CI)

Continuous Improvement would need to increase from 1% to 1.08% for existing shared services and those reported planned implementations

Or

Table 4.8: Option 2 Benefit Requirements

4.8 Option 3: Intervention Convergence

Under this option, convergence would be force-led but with a strong national facilitation role. Convergence is driven through the creation of a Shared Services Centre of Excellence (CoE) with dedicated resources, building a strong national governance. The CoE will enable more forces to deliver their shared services plans more successfully, reduce cost variation and accelerate convergence. It will do this by:

Providing access to specialist insight and skills (e.g. business case development,

benchmarking etc.)

Creating common standards and processes to drive a consistent approach

Supporting forces to converge towards a small number of services and systems

Sharing good practice and lessons learned to improve the outcomes of planned shared

services

Reducing duplication of effort and cost of implementation by making common solutions

available

21 A combination of benefits can also be used to deliver the savings. This table is exploring the ranges to aid in the options down selection process.


Benefits from forces achieving more Forces planning to implement shared services would benefits from their planned shared need to be enabled to achieve 21% reduction in service arrangements functional expenditure, rather than 20% expected in

the baseline

Providing neutral advice on contractual arrangements and models for forces moving to a

converged solution, including governance models and exit strategies/arrangements (e.g.

buying out contracts).

In parallel, while supporting early benefits, the Centre of Excellence can also work with forces to assess and develop a roadmap towards a more radical transformation of shared services. This could be achieved organically as existing contracts and systems come to an end or accelerated through funding of early termination of existing systems or transition to new services. However, this is likely to be complex and costly.

The CoE would focus on accelerating standardisation and convergence across police shared services, and could therefore provide a staging post in policing’s journey towards nationally driven convergence, as illustrated below:

Figure 2: A journey towards national convergence

Further details of the high-level design of this Centre of Excellence are included in Appendix D.

Under this option, the central team will build on the activities performed under options 1 & 2 and set up a governance forum which promotes conversations between forces to achieve greater convergence through establishing a core set of principles and applying funding levers to exert change that results in:

A collective approach to data sets and metrics to ensure that all forces define metrics in

the same way

Creating a collective approach to business process, policies and procedures as well as

systems and potentially the shared service operation itself

Establishment of working groups to help facilitate greater convergence

Access to expert resource to assist with business case development, shared service

expertise, project and change management etc.

Negotiate procurement and licensing costs of business solutions with solution vendors

on behalf of policing


Exploitation of self-service and automation to meet user needs and building proof of

concept before wider force adoption

Build a police-wide framework for ERP licences that will allow forces to get benefits of

scale and coalesce around a few (preferably 3-4) vendors

A national roadmap to achieve a more radical fully converged shared services solution

This is likely to result in an acceleration of convergence on systems, especially where opportunity cost is very high. For example, providing funding or resource support for replacing old legacy systems which may have high maintenance costs with new off the shelf solutions. In addition, this approach could lead to the development of national approaches to supplier management, including contracting frameworks and nationally-negotiated licensing.


This option scored ‘High’ against the CSFs as a result of the detailed assessment outlined below in Table 4.9.

#

CSFs



1

Accelerates scale, pace and effectiveness of

convergence

High

This option would build on the ideas of option 2 but go further by establishing a number of central capabilities and national working groups whose focus is to help with greater convergence in shared services and allow for broader and deeper collaboration.

A number of forces indicated within the workshops that their lack of skills and resources would prevent them from delivering wider shared services arrangements. The access to specialist skills provided under this option through central capabilities would enable these forces to accelerate the pace at which convergence would occur.

This option would also reduce duplication of capabilities and the effort required.

It is for this reason that this option has been assessed as ‘High’ against this CSF.

2

Strategic Alignment

High

This option helps to:

Drive common standards and convergence on how enabling support services are delivered

Provides opportunity for greater economies of scales within the commercial contracting process through consolidation

Aligns to the government shared services policy on the supplier landscape It also would be consistent with the existing accountability framework. Given how closely this option delivers against the Policing 2025 vision, this option has been assessed as ‘High’ against this CSF.

3

Value for money

Medium

The cost for the centre under this option would be £9.6M over 10 years. In order to recover this cost, the centre would need to make additional savings on CI, or by improving the savings forces can expect from their shared service plans from 15%-20% to 20%-30%.

4

Deliverability

High

This option requires a central capability of approximately seven people with skills/expertise in the development of business cases, commercial expertise, technical expertise, HR/finance knowledge within policing. Delivery of such a capability mix should not pose a risk and therefore this option has assessed as ‘High’ in this evaluation.

5

Stakeholder

Buy-in

High

Within the regional workshops, this option was seen as attractive, as it:

Offered a good balance between a national steer but with elements of local decision making

Would incentivise those falling behind to drive forward

Retained local ownership

Removed some of the resources/skills constraints that exist today

Was force-led and therefore likely to get support from the PCCs and Chiefs

Is seen as collaborative by design It is for these reasons that this option ranked closely 2nd in the options ranking exercise performed at the workshops. Table C.3 in Appendix C summarises the strengths and weaknesses for this option, as assessed by stakeholders.


#

CSFs



This option has therefore been assessed as ‘High’ against this CSF.

6

Mitigates

strategic risks

High

This option, like option 2, is likely to reduce the risk associated with the following:

Ministerial mandation - due to evidence of benefits being realised

Benefit accountability - as forces will be seen as driving the change

Skills & capability to support change - due to central resources that could be leveraged

Lack of engagement from police forces - forces would be at risk of being led unless they contributed so likely to drive engagement


Overall Rating

High


4.8.2 Cost of Option In the previous version of this OBC in September 2018, the additional cost of this option was estimated to be £12.2M. The figure has now dropped to £9.6M mainly due to reducing the Centre of Excellence’s reliance on external support. The costs cover central staff of 7 FTE, and the external support to deliver 3 medium-sized and 2 large-scale projects a year initially. The key assumptions underpinning these costs are as described in Appendix B.



This analysis estimates the activity which the centre needs to be able to influence to return a cashable benefit. The minimum amount of additional benefit which would need to be delivered to recover the investment costs in the central resource are as follows:

Benefit Category22 What the Centre would need to deliver


Continuous Improvement would need to increase from 1% to c. 1.20% for existing shared services and those reported planned implementations.

Or



Benefits from forces achieving more benefits Forces planning to implement shared from their planned shared service services would need to be enabled to achieve arrangements c. 20% to 25% reduction in functional

expenditure, rather than 15%-20% expected in the baseline


4.9 Option 4: Hybrid Approach to Convergence

Under this option, the centre would build on the previous options and identify, design and implement a national unified service for a small number of agreed functions. Suggested functions included vetting or payroll. This option could establish a unified and fully integrated business support service for some functions where there is clear evidence coalescence would provide far reaching benefits. For all other areas, this option would establish central governance with dedicated resources to support individual forces in the delivery of shared services, and potentially provide funding or other resource to facilitate faster convergence.


This option scored ‘High’ against the CSFs as a result of the detailed assessment is outlined in Table 4.12.

#

CSFs



1

Accelerates scale, pace and

effectiveness of convergence

High

This option would build on the ideas of option 3 but go further by establishing a national shared service for some functions where there is clear evidence of benefits of such an approach. This would allow the forces to see and test the benefits derived through greater national collaboration and potentially pave the way for further similar projects. A number of forces indicated that there would be benefits in having a national service for those functions or sub-functions which can be easily shared such as vetting, payroll. This option would provide an opportunity for these shareable instances to be identified and agreed in a targeted way. It is for this reason that this option has been assessed as ‘High’ against this CSF.

2

Strategic alignment

High

This option helps:

Drive common standards and convergence on how enabling support services are delivered

Provides opportunity for greater economies of scales within the commercial contracting process through consolidation

Aligns to the government shared services policy on the supplier landscape This option would largely be consistent with the existing accountability framework, although would also benefit from specific areas of shared service through agreement by forces. Given how closely this option delivers against the Policing 2025 vision, this option has been assessed as ‘High’ against this CSF

3

Value for money

High

The cost to the centre under this option is estimated initially at £16.3M to provide the central team described in option 3 and undertaken a feasibility assessment and design of a national service. Detailed assessment of national services would need to be subject to their own business cases. To recover these costs the centre would need to deliver more benefits than in option 3, which carries risk. The delivery of a single national solution such as payroll could yield significant returns on investment, but this is not proven until further analysis is undertaken on specific proposals. For these reasons, value for money is assessed as ‘High’ against the VfM CSF.

4

Deliverability

Medium

This option requires a more extensive central capability with skills/expertise in the development of business cases, service design, commercial expertise, technical expertise, functional knowledge within policing, programme delivery. Such a programme mix is likely to be on par with Transforming Forensics albeit at a smaller scale. It is likely that this option would require greater external support. Delivery of any national service is likely to be complex and time-consuming. As such, this option has been assessed as ‘Medium’ against deliverability.

5

Stakeholder buy-in

High

Within the regional workshops, this option was seen as:

Allowing forces to retain some control

Removing transactional burden

Providing national insight with local control

Providing high profile quick wins

Quicker realisation of savings

Reducing time wasted on reinventing the wheel

Improving accountability and comparability

Collaborative by design


#

CSFs



It is for these reasons that this option ranked 1st in the options ranking exercise performed at the workshops. Table 8.7 in Appendix C summarises the strengths and weaknesses for this option, as assessed by stakeholders. This option has therefore been assessed as ‘High’ against this CSF.

6


High

This option, like option 2, is likely to reduce the risk associated with the following:

Ministerial mandation - due to evidence of benefits being realised and elements of national collaboration

Benefit accountability - as forces will be seen as driving the change

Skills & capability to support change - due to central resources that could be leveraged

Lack of engagement from police forces - forces would be at risk of being led unless they contributed so likely to drive engagement


Overall

Rating High


4.9.2 Cost of Option The cost to the centre under this option is estimated to be £16.3M over the 10 years of the business case. These costs assume a central team of seven, external support to deliver 3 medium-sized and 2 large-scale projects, and the national design and implementation of a shared service in a single function. The key assumptions underpinning these costs are described in Appendix B.

Further work would be required to develop a detailed business case for any nationally-provided service.



The role of the centre under this option is outlined in Figure 4.1. The minimum amount of benefits which would need to be delivered in order to recover the investment costs are as follows:

Benefit Category23 What the Centre would need to deliver


Continuous Improvement would need to increase from 1% to 1.42% for existing shared services and those reported planned implementations



£000s 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 Total

PV Costs Central Staffing 480 459 439 420 402 385 368 352 337 322 3,965

External Support 954 922 891 861 832 803 776 750 725 700 8,213

Transformation Programme 1,425 1,377 1,330 - - - - - - - 4,132

Other 21 - - - - 18 - - - - 39

Total Cost 2,880 2,758 2,660 1,281 1,234 1,206 1,144 1,102 1,062 1,022 16,349

Or

Or



Benefits from forces achieving more benefits Forces planning to implement shared from their planned shared service services would need to be enabled to achieve arrangements 25% reduction in functional expenditure,

rather than 15%-20% expected in the baseline

Benefits derived through roll-out of a single national service, such as Payroll

Roll out of 3 national shared services, from 2022/23. This would need to deliver the benchmark 25% savings on revenue expenditure for the specific functions rolled into the shared service

4.10 Option 5: National Approach to Convergence

Within this option, convergence would be through a nationally-led design with strong central support to implement it. This option would design and establish a national approach to business support services that delivers to local, regional and national requirements as defined by the forces. This could include services delivered nationally and/or regionally, but to a common design and approach.

This option would build on the previous options with the exception that there would be a stronger national governance that coordinates the creation of a national design and mandated use of systems/ technology for the nationally-led designed processes with convergence onto a smaller number of platforms for other services with the necessary investment to realise it.

Under this option the centre would:

• Provide project management and change management capabilities to support shared

services projects

• Drive adoption of standards in shared services across policing

• Initiate and execute projects that progressively develop common policies that will

support adoption of shared services to a national design.

• Deliver services that are agreed by forces for delivery at national level and where there

is clear evidence of benefits of sharing delivery models, coalescing around a few (3-4)

shared platforms

• Provide more effective and joined-up commercial and supplier management of system

providers operating across policing

• Provide training to staff to maximise use of ERP systems i.e. not reporting but as a

management tool

• Continuously augment and develop new capabilities and services through a national

delivery framework

• Negotiate better commercial arrangements with service providers and solution vendors

which operate across wider government departments.

This approach would lead to the planning of service delivery to be delivered to a national design as defined and agreed by policing and would require consensus in order for it to be adopted.

4.10.1 Analysis of Option 5 This option scored ‘Low’ against the CSFs as a result of the detailed assessment as outlined in Table 4.15.

#

CSFs



1


effectiveness of convergence

Low

This option seeks to deliver all services through a national design and a mandated use of systems/technology as agreed by the forces. There would therefore be convergence around a smaller number of platforms arising from this option.


#

CSFs



However, agreement on a national design amongst the forces is likely to take time due to different starting points for forces. For this reason, the pace of benefits realisation is unlikely to be quick. This option is seen as not addressing local issues and priorities and will require wholesale meeting of minds and agreement. It is for this reason that this option has been assessed as ‘Low’ against this CSF.

2

Strategic alignment

Medium

Whilst this option would introduce a high level of national collaboration, it also reduces force level accountability for the delivery of the in-scope functions. It would make collaboration with non-police partners more challenging. This option though would enable the requirements from the Policing Vision 2025 to be met and will:

Develop common data sets ad standards

Encourage national approach

Enable greater joint working

Deliver savings (in the long term) It is for these reason that this option has been assessed as ‘Medium’ against this CSF.

3

Value for money

Low

Under this option the investment cost is estimated at £120M to £149M. To justify such an investment, there would have to be a significant payback, which at this stage is unclear and would require further detailed work. As such, this option has been assessed as ‘Low’ against the VfM CSF at this stage.

4

Deliverability

Low

This option requires a more extensive central capability. Such a programme mix is likely to be on par with an equivalent programme such as Transforming Forensics in terms of skills mix and scale of programme. Given that the national delivery of Enabling Support Services is likely to be contentious, and the level of change required is likely to be disruptive, this option has been assessed as ‘Low’ against deliverability.

5

Stakeholder buy-in

Low


Likely to result in poor buy-in from forces

Not allowing local control

Against local government policies

Likely to cost the smaller forces a disproportionate amount

Lacking successful track record within government

Stifling innovation It is for these reasons that this option ranked towards the bottom in the options ranking exercise performed at the regional workshops.

Table C.5 in Appendix C summarises the strengths and weaknesses for this option, as assessed by stakeholders. This option has therefore been assessed as ‘Low’ against this CSF.

6


Low

Whilst, if delivered this option may address some of the strategic risks, delivery will require considerable collaboration between forces. The low stakeholder buy-in and low deliverability means that this option carries significant strategic risk. It is for these reasons that this option has been assessed as ‘’Low’ against this CSF.

Overall Rating

Low



In September 2018, the cost to the centre under this option is estimated to be £61M over the 10 years of the business case. This option delivers nationally designed shared services in each of the functions in scope, through a 5-year implementation programme.

As a result of further analysis conducted since then, this figure has increased to a range of £120m to £149m – mainly driven by increasing the cost impacts on forces (e.g. redundancy, business and technology change etc.) and number of forces that would join the national approach.

Detailed costings have not been done but the programme costs have been estimated based on a comparable transformation programme - Transforming Forensics. The total revenue

expenditure for the 4 functions in scope of this business case is £352M, compared to the

revenue assigned to forensics functions of £372M24. This represents a factor of 94%, which applied to the Transforming Forensics Programme equates to £11M per annum. See Table 4.16

and Table 4.17 for the detailed breakdown of costs by categories. Additional force costs have been extrapolated from force implementation costs. More work would be needed to validate these if this option was to be explored further.

These costs do not explicitly take into account any transition costs for forces already in a shared service to join any new arrangements. The key assumptions underpinning these costs are as shown in Appendix B.

Table 4.16: Option 5 Costs (all forces joining the national approach)

Table 4.17: Option 5 Costs (2/3 of forces joining the national approach)

4.10.3 Benefits Analysis of Option

In order to calculate the benefits, the revenue expenditure of those forces and sub-functions

which do not currently have shared services25 was estimated. Then the benchmark 25% savings was applied, progressively from year 3 (See Table 4.18).

Table 4.18: Option 5 Benefits Analysis

In doing this it is assumed that those already in a shared service will not receive these initial benefits a second time by joining the national capability.

It is also assumed that the planned shared services reported in the survey will no longer take place and will be superseded by forces joining the nationally designed shared service arrangements.

It is estimated that this option will deliver benefits in the region of £267M over 10 years. Benefits would start to come on stream from 2021/22. Significantly more analysis would be required before embarking on this option to confirm these figures.

24 CIPFA Police Objective Analysis 2017

25 Derived from the National Shared Services survey


4.11 Option 6: Mandatory Convergence

Under this option, the centre would deliver as per option 5 with the exception that the national approach to business support services will be a mandated adoption. This could include services delivered nationally and regionally, but to a common and mandated design and approach.

There would be a strong national governance that establishes a transformation team which plans and delivers changes at individual force level to ensure full national convergence of business support systems. The activities performed by the centre would be as per option 5 and build on all previous options.

Out of all options assessed in this OBC, this option is closest to the “End State” described in Figure 2 earlier. In practice, this End State could potentially take one of the three shapes below:

Forced Convergence - mandating all forces to deliver their business support activities in

a certain way

Regional Hubs – consolidating all forces’ business support activities into a number of

regional hubs centred around a common technology

Outsource - outsource all forces’ business support activities to a third party supplier(s).

These potential End States are further discussed in Appendix E.


This option scored ‘Low’ against the CSFs as a result of the detailed assessment as outlined in

Table 4.19.

#

CSFs



1

Accelerates scale,

pace and effectiveness of

convergence

Low

This option seeks to deliver all services through a mandated national design and use of systems/technology as agreed by the forces. There would therefore be convergence around a smaller number of platforms arising from this option. Further potential benefits include reduced running costs; releasing more budget to support front line policing; and higher likelihood of consistency and standardisation across processes, standards and systems.

However, agreement on a national design amongst the forces is likely to take time due to different starting points for forces. For this reason, the pace of benefits realisation is unlikely to be quick. This option is seen as not addressing local issues and priorities and will require wholesale meeting of minds and agreement. It is for this reason that this option has been assessed as ‘Low’ against this CSF.

2

Strategic alignment

Medium

Whilst this option would enable increased inter-force operational collaboration nationally, it also erodes all force level accountability for the delivery of the in- scope functions. This option though does meet all the requirements from the Policing Vision 2025 (which may even unlock greater investment in policing from the government) and will:

Develop common data sets ad standards

Encourage national approach

Enable greater joint working

Delivery savings (in the long term) It is for these reason that this option has been assessed as ‘Medium’ against this CSF.

3 Value for money Low Under this option the investment cost is estimated at £120 to £149M. To justify such an investment, there would have to be a significant payback, which at this


#

CSFs



stage is unclear and would require further detailed work. As such, this option has assessed as ‘Low’ against the VfM CSF at this stage.

4

Deliverability

Low

This option requires a more extensive central capability. Such a programme mix is likely to be on par with an equivalent programme such as Transforming Forensics in terms of skills mix and scale of programme.

The level of change required is likely to be disruptive (e.g. unpicking existing agreements and operations between forces, and between forces and other partners such as local authorities). Furthermore, each force is at a different starting point - adding significant complexity, costs (e.g. staff reductions, relocations and TUPE implications) and controversy to implementation. These factors may result in slow benefit realisation.

Also, as a mandated solution, this option will attract significant resistance from forces, which will make delivery particularly difficult.

This option has been assessed as ‘Low’ against deliverability.

5

Stakeholder Buy-in

Low


Definitive and clear

Likely to result in poor buy-in from forces

Not allowing local control

Against local government policies

Lacking successful track record within government

Stifling innovation

Likely to generate significant opposition

Effort would be spent resisting mandation itself

It is for these reasons that this option ranked towards the bottom in the options ranking exercise performed at the regional workshops.

For option 6 the strengths and weaknesses were no different to Option 5 with the exception that the forces would require less time to arrive at a decision as the approach will be mandated.

Table C.5 in Appendix C summarises the strengths and weaknesses for this option, as assessed by stakeholders. This option has therefore been assessed as ‘Low’ against this CSF.

6


Low

There is likely to be no resistance from the government. However, there will be greater resistance amongst the police forces to implement change. Without stakeholder buy-in, a major strategic risk factor, there is limited chance of success and therefore this option has been assessed as ‘Low’ against this CSF.

Overall Rating Low



In September 2018, the cost to the centre under this option is estimated to be £61M over the 10 years of the business case. This option delivers nationally designed shared services in each of the functions in scope, through a five-year implementation programme.

As with option 5, detailed costings have not been done at this stage and instead have been estimated based on a comparable transformation programmes, Transforming Forensics. The total revenue expenditure for the 5 functions in scope of this business case is £352M, compared

to the revenue assigned to forensics functions of £372M26. This represents a factor of 94%, which applied to the Transforming Forensics Programme equates to £11M per annum. Additional force costs have been extrapolated from force implementation costs. More work would be needed to validate these if this option was to be explored further.



The key difference between these options is the assumption that the benefits of creating national shared services would be delivered earlier due to mandation.

As a result of further analysis conducted since September, this figure has increased to a range of £120m to £149m – mainly driven by increasing the cost impacts on forces (e.g. redundancy, business and technology change etc.) and number of forces that would join the national approach.

See Table 4.20 for the detailed breakdown of costs by categories. The key assumptions underpinning these costs are as shown in Appendix B.

Table 4.20: Option 6 Costs (all forces joining the national approach)

Table 4.21: Option 6 Costs (2/3 of forces joining the national approach)

4.11.3 Benefits Analysis of Option

Benefits have been calculated in the same way as for option 5, by estimating the revenue expenditure of those forces and sub-functions which do not currently have shared services27. Then the benchmark 25% savings have been applied, progressively from year 3

As with option 5, it has been assumed that those already in a shared service will not receive these initial benefits a second time by joining the national capability.

It is also assumed that the planned shared services reported in the survey will no longer take place and will be superseded by forces joining the nationally designed shared service arrangements.

In September, it is estimated that this option will deliver benefits in the region of £305M over 10 years. Benefits would start to come on stream from 2021/22. The main difference from option 5 is that benefits would be gained earlier.

Since then, further estimating exercise was conducted. This has resulted in revising the original estimate to a range of £204M to £306M – mainly driven by the number of forces that would join the national approach (See Table 4.22 and Table 4.23). More detailed analysis would be required before embarking on this option to confirm these figures.

Table 4.22: Option 6 Benefits Analysis (all forces joining the national approach)



Table 4.23: Option 6 Benefits Analysis (2/3 forces joining the national approach)


4.12 Summary of qualitative/quantitative assessment

The qualitative assessment reviews each option against the CSFs attributing a low, medium, high rating against each CSF. This assessment informs the down selection process to identify/recommend the preferred options in the conclusion of this Economic Case.

#

CSFs

Option 1: Do Minimum – Continued Force-led Convergence

(baseline option for comparison)

Option 2: Influence/

Facilitate Convergence

Option 3: Intervention

Convergence



Option 6: Mandatory

Convergence

1


Low

Low

High

High

Low

Low

2

Strategic Alignment

Low

Low

High

High

Medium

Medium

3

Value for money

Low

Medium

Medium

High

Low

Low

4 Is deliverable High High High Medium Low Low

5 Stakeholder Buy-in Low Medium High High Low Low


Low Low High High Low Low

Low Medium High High Low Low

Table 4.24: Comparative assessment of options


Option 1 Option 2 Option 3 Option 4

Cost of Centre of

Excellence

- £6.2M £9.6M £16.3M

Uplift in savings resulting

through Continuous

Improvement (CI)

Forces achieve 1% reduction across all

functional spend and future plans for

shared services

This would need to increase to 1.08% This would need to increase to c. 1.20% This would need to increase to 1.42%

Benefits from forces

achieving more benefits

from their planned shared

service arrangements

Forces achieve 20% reduction in functional

spend when they implement their plans for

shared services

This would need to increase to 21% This would need to increase to 20-25% This would need to increase to 25%

Benefits derived through

roll-out of a single

national service, such as

Payroll

- - - 3 national shared services would need to

be rolled out, delivering 25% savings on

the relevant functional spend from 2022/23

Table 4.25: Summary Benefits Assessment – Options 1-4

Table 4.26: Summary Benefits Assessment – Options 5 and 6 (assuming all forces joining the national approach)


4.13 Workshop ranking of options

At the regional workshops, the forces were provided the opportunity to vote for their preferred options on the basis of the strengths and weaknesses articulated for each option. The forces were asked to rank the preferred 3 options, the results for which are summarised in Table 4.27.

Options ranking

1st Choice

(weighting = 3)

2nd Choice

(weighting = 2)

3rd Choice

(weighting = 1)

Total Points

Option 1 6 3 10 34

Option 2 0 8 21 37

Option 3 26 18 8 122

Option 4 28 21 8 134

Option 5 1 12 9 36

Option 6 8 5 3 37 Table 4.27: Ranking of options at the regional workshops

4.14 Recommendation for the preferred option

Options 3 and 4 emerged as the preferred way forward, based on assessment against critical success factors, and discussion in the workshops across England and Wales with all forces and PCC representatives. As option 4 could be implemented as an addition to option 3 at any time in the future, option 3 was selected as the preferred option at this stage.

In support of the selection of option 3 as the preferred option, an NPV analysis was conducted for options 1 and 3. This analysis is based on a number of assumptions which are difficult to test at this stage. Detailed assumptions are given in Appendix B

The results are shown in Table 4.28

In £m over 10 years Current estimate Previous estimate

Option 1 - Do

minimum

Option 3 - Intervention

Convergence

Option 1 - Do minimum

Option 3 - Intervention

Convergence

PV of Costs 78 100 82 111

PV of Benefits 69 to 82 102 to 141 86 123

NPV of the option -9 to 4 2 to 41 4 12

Table 4.28: Results of NPV analysis

The movement between the previous and current estimates are driven by the following factors:

Avon & Somerset abandoning shared services initiatives

North Wales rephrasing some of its shared services activities

Refining the CoE staffing estimates

Reducing the CoE’s future reliance on external support

Adding a range of scenarios using assumed savings of 15% to 20% in function costs for

Option 1; 20 to 30% for Option 3.

Shared Services in Policing OBC Page 67 of 108

Option 3 delivers benefits worth £33M to £59M more than option 1 and, due to its proactive nature, is likely to offer higher delivery confidence than they Do Minimum option. Option delivers more benefit because establishing the Centre of Excellence could:

Enable forces to deliver more benefits from their existing shared service plans,

Enable forces to bring forward their existing plans for shared services, and

Enable forces without any shared services or future plans for them, to implement them to

some extent in the medium term

Reducing the force cost of option 3 due to improved learning and knowledge sharing

leading to avoiding reinventing the wheels.

The present value of costs for option 3 is £22M more than for option 1 because:

Running the Centre of Excellence over the 10-year period is likely to cost c. £9.6M

As forces bring forward their plans for shared services, they will also need to bring

forward their investments in the implementation, and

As forces establish new shared service arrangement, they will incur investment costs to

implement them and deliver benefits.

Taking all of this together, the NPV of option 3 is £2M to £41M over the 10-year appraisal period, which is £11M to £37M over and above the do minimum scenario.


5. Commercial Case

5.1 Introduction

Commercial arrangements, including the procurement of goods and services, will be required in order to successfully set up and equip the Centre of Excellence. This Commercial Case explores the governance necessary – which will colour the commercial approach employed, the commercial activity needed and the potential routes to market for the components that will be bought.

5.2 Governance

The routes to market for the components needed will partially dependent on the governance and constitution of the Centre of Excellence. For example, if the Centre of Excellence is sponsored by and co-located with a force then the more appropriate route to market for some components will be to leverage existing contracts held by that force.

A phase of detailed work is required to understand the optimal governance and constitution ahead of making procurement decisions.

In the interim, it is assumed that that the Centre of Excellence will be sponsored by and co- located with either a police force or another established central policing capability (e.g. Police Commercial Organisation). This would make use of already available accommodation and enable all procurements to be done from existing policing frameworks, using established rates.

5.3 Components requirement and routes to market

The role of the Centre of Excellence under option 3 has been described in detail within Figure 4.1. In order to perform this role, the components listed below will be needed. All of these components exist in established markets and there is relatively little complexity in procurement routes themselves.

• Core Staffing – A core staff within the centre at various grades. These will be a mix of seconded and permanent staff, and therefore be recruited rather than brought in externally through a procurement exercise

• Accommodation and facilities – Core staff will need office space in which to work. It is

likely – and probably preferable – that the Centre of Excellence is co-located at a force which has capacity and little realistic opportunity cost associated with its space (i.e. typically in police estates forces can rarely sub-let space and often cannot reduce their footprint in such a granular way to allow for the reduction of accommodation costs). If this is the case there would not be a procurement required, though there may, or may not, be some cross charging required to enable the host force to share costs and draw revenue. If a host model is not employed then accommodation will need to be bought via the typical method of leasing commercial real estate, probably through an agent. This details of this will depend on the preferred size and location of the space needed.

• ICT hardware and software – Core staff will need computers, telephony and other equipment to operate effectively. Again, if a host model is employed then it would be preferable to leverage existing hardware contracts from that force. This will enable the Centre of Excellence to benefit from greater economies of scale and align it with the rest of the estate and IT support in their host. Should this not be possible there are multiple routes to market for public sector bodies seeking to procure IT hardware, the largest of which is the Crown Commercial Service (CCS) Technology Products 2 Framework (Lot 1 – Hardware).


• Professional services – These are likely to be required to deliver discrete work packages which contribute to the Centre of Excellence’s overall objectives, including consultancy, legal services and potentially accounting services. To date, professional services have been procured via the Bloom framework. Alternative routes to market can also be found necessary can be procured via the CCS professional services frameworks.

5.4 Procuring the ERP framework

One of the suggested roles of the Centre of Excellence is to procure a framework to enable forces to converge around a small number of ERP platforms, and to negotiate standardised rates with providers leveraging forces’ collective buying power. This could be a significant workstream for the Centre of Excellence, but equally could be within the remit of the Police IT Company, drawing on the Centre of Excellence as the intelligent customer.


6. Financial Case

6.1 Introduction

The purpose of the Financial Case is to set out the financial implications of the preferred option and determine its affordability. The sections below outline high-level indicative costs associated with option 3 and outlines some potential sources of funding.

NB: a further update was made to this section in December 2018. Based on the detailed design of the Centre of Excellence - resourcing strategy, staff roles and capabilities and associated cost assumptions as detailed in Appendix D – the required funding level was refined further.

6.2 Note about the financial case

The figures quoted in the Financial Case differ from those in the Economic Case because they include inflation and time value of money.

6.3 Implementation costs for option 3

The running cost for the Centre is estimated to be c. £1.0M to £1.4M each year after an upfront investment in year 1, with a small amount of capital needed to cover ICT equipment for staff.

Table 6.1: Implementation Costs for Option 3

6.4 Affordability and funding sources

Until there is agreement on the funding sources it is not possible to assess the affordability of option 3.

There are a number of options which could be considered in terms of funding the central capability. These include:

1. Secondments: This would not require a transfer of funds between organisations, as the

sending force would continue to pay for the secondee.

2. Top-slicing force budgets: This is unlikely to be a popular option given that force budgets

are already tight. However, force contributions of c.£260K28 over 10 years to a central

fund would cover the cost of option 3.

3. Allocation of costs through Transformation Fund: As an integral programme within the

police transformation portfolio, a transformation fund allocation could cover part or all of

the costs.

28 Based on an equal contribution by 43 forces.


4. Additional investment through Home Office29: In his letter of March 2018, the Minister for

Policing, Crime and Fire suggested that he would consider additional funding in order to

accelerate achievement of the savings objectives in the area of enabling services.

It is likely that a combination of funding sources would be required in order to deliver either of the preferred option. See Appendix D.2.9 for further analysis on this topic.

29 “I would ask you to consider whether this work requires additional investment in order to accelerate.” Rt Hon Nick Hurd MP in

letter to Chairs of NPCC and APCC, dated 29 March 2018


7. Management Case

7.1 Introduction

This Management Case sets out the arrangements and plans for managing implementation of the Centre of Excellence, including governance arrangements, plans, stakeholders, risks and benefits management arrangements.

7.2 Programme management arrangements

The implementation of the Centre will be led by the National Commercial Board, on behalf of the NPCC. However, they may be required to commission specialist professional advice to support the implementation. It is anticipated that existing formal programme governance structures will be used to establish and oversee the implementation, including alignment with other transformation activity. The implementation will require some recruitment activity, both within the implementation team and as part of the Centre.

Given the high level of activity currently within police transformation, there is an opportunity of combining capability across other NCB workstreams, and possibly with wider transformation programmes.

Prior to implementation, a detailed design of the Centre will need to be developed and agreed with the stakeholder representatives through the business case development process, as well as a detailed programme plan.

7.2.1 Governance arrangements

During development of the SOBC and OBC the project has been governed and managed through the NPCC. It is anticipated that the future governance structure for the setup of the Centre of Excellence will continue through the NPCC. The proposed structure aligns within the structures that are in place today and therefore will not require any change. To ensure stakeholder buy-in, the Shared Service Programme Board will consult the forces on any design/decision as per the workshops performed during this phase of work.

However, a phase of detailed work is required to understand the optimal governance and constitution of the Centre of Excellence itself once it is set up. This is essential to designing how the Centre will operate, as well as enabling decision-making on procurements which will be required during the set-up of the Centre. Preliminary analysis is included in Appendix D, with the assumption being that the CoE would not be established as a stand-alone entity and would form part of the proposed Police Commercial Organisation. The CoE would be governed by the NCB.

7.3 Risk and issues management

Proactive risk management will form part of the transition to the Centre, building on existing risk management arrangements adopted by the NPCC for current transformation activity. This means:

• Establishing and maintaining a risk log; • Ensuring that each risk is owned by a named individual; • Carrying out regular risk reviews and setting target dates for mitigations; • Providing strategic oversight of risks and mitigations by appropriate governance

bodies based on clear thresholds for escalation.

At this early stage no delivery risks have been identified. We anticipate developing these in subsequent business case development stages.


7.4 Communications and stakeholder management

A stakeholder management strategy will be completed to identify the stakeholders within the PCCs and Forces that will be pro-actively engaged to secure the desired levels of commitment, buy-in and support for the programme. A stakeholder management and engagement plan will assign relationship owners, identify the concerns and motivations of stakeholders, and determine the channels (and frequency) to engage stakeholders.

Communicating with stakeholders will be an integral part of the programme. A communications strategy will be developed to clarify to whom, when and how communications should be made.

The objectives of the approach to communications will include:

Promote a high level of awareness and commitment

Maintain consistent messages within and outside the project

Ensure that expectations do not drift out of line with what has been agreed to be delivered

The communications plan will be vital to ensure that internal and external communications are managed effectively. Messages will be consistent and timely with an appropriate method of evaluating effectiveness. The communications plan will drive the creation and management of all programme communications throughout the programme.

7.5 Benefits management

The management and monitoring of benefits will be carried out in alignment with PRINCE2 principles and policing standards. A Benefits Realisation Plan will be developed to identify and agree the metrics upon which the programme will be measured when the benefits are forecast to be achieved and the period of time in which the benefits will be reviewed and reported.

Programme Evaluation Reviews (PERs) will appraise how well the programme was managed and delivered compared with expectations. It is anticipated they will take place within 12 months of any change being implemented and once steady state operation is in place.

Implementation of the preferred option will need to be underpinned by proactive benefits management arrangements to ensure that the identified benefits are realised – but are challenged robustly to ensure they are real and tangible. At some point during the process they will be subject to external scrutiny and may eventually be scrutinised nationally through, for example, the National Audit Office and Public Accounts Committee. These arrangements will need to be overseen by appropriate governance arrangements within the NPCC which will have regard to the specific types of benefit detailed in the Economic Case.

The approach to benefits realisation includes:

• Establishing a benefits register; • Identifying clear owners with responsibility for benefits realisation; • Developing common benefits realisation plans; • Regular review processes and challenge arrangements.

7.6 Next steps

Next steps for the programme broadly fall into two workstreams:

Reflecting the below in a Full Business Case (FBC) - thereby

obtaining final approval and releasing funding for setup of the CoE:


o Funding - develop final and detailed proposals for funding, in conjunction

with the Police Commercial Organisation

o Entity - agree and finalise proposal for the CoE to become part of the

Police Commercial Organisation entity

o Staffing - identify possible locations for the team to be based and begin stakeholder engagement. Draft job descriptions. Secure third party support for initial projects.

o Preparing for set-up – finalise and execute implementation

roadmap and engagement plan.

Set the long-term ambition - explore and evaluate end-state police shared services options in more detail - either as part of the FBC, or as a separate piece of work delivered by the CoE once established.


8. Appendices

A. Data Collection and Stakeholder Engagement

B. Economic Appraisals

C. Workshop Output: Option Strengths and Weaknesses

D. Shared Services Centre of Excellence

E. Potential end state – a Nationally Driven Convergence Approach


A number of data collection and analysis tasks were conducted to inform the development of both the SOBC and OBC. Initial work on the SOBC was informed by CIPFA benchmarking data gathered as part of Phase 1. In addition, three key data collection activities were undertaken:

a. a set of surveys,

b. regional workshops with police forces, and

c. stakeholder interviews.

A.1 CIPFA Benchmarking data

As part of Phase 1 of this project, analysis was conducted on the CIPFA Back Office Benchmarking Club 2016 data. The dataset contains a set of benchmarks for each of the five in- scope functions that are the subject of this Business Case. Of the 43 English and Welsh forces, 34 forces provided relevant benchmarking data. More information on the dataset can be found at http://www.cipfa.org/services/benchmarking.

A.2 Survey

In order to understand the current shared services landscape in policing as part of the Strategic Case, two surveys were conducted to:

a) build a picture on the current status of shared services, and

b) understand the degree of sharing between and across corporate systems.

The National Shared Services in Policing survey gathered data on enabling services that were being shared, how these were delivered, and the challenges associated with implementing shared services.

The corporate systems survey investigated the degree to which police forces had similar systems and suppliers in place, whether the systems were shared across functions and organisations, and the contractual terms for each system. The corporate systems survey was concerned with in-scope functions at the time (Finance, HR, Learning & Development, Legal Services, and Procurement).

Surveys were sent to all 43 English and welsh forces30 in March 2018. The shared services survey obtained replies from 42 forces (response rate = 98%), and the corporate systems survey received 40 replies (response rate = 93%).

A supplemental mini-survey on the maturity of shared services was distributed to all forces that had reported either small-scale or extensive implementation of shared services31. Twenty forces (response rate = 71%) responded to the mini-survey.

In November 2018, the survey respondents were requested to provide an update on their latest status on shared services and corporate systems. 19 and 22 responses were received respectively.

A.3 Regional workshops

30 It should be noted that the Shared Services survey had first been distributed in 2017 as part of Phase 1. Thirteen forces replied

to the 2017 survey. These 13 forces were not surveyed again in 2018 due to the data burden associated with completing the questionnaire. As such, 13 forces completed the survey in 2017, and the remaining 29 forces completed the survey in 2018.

31 28 Forces were surveyed to understand the extent of their shared services implementation


A. Data collection and stakeholder engagement

http://www.cipfa.org/services/benchmarking

The second stage of the project was to provide an opportunity for force and PCC representatives to develop the direction of the proposed approach and to understand where national efforts could add most value. This engagement took the form of regional workshops, conducted in seven locations across England and Wales. More specifically, the workshops were used to explore the priorities for forces and PCCs, where the barriers to change lay, and how any proposed national strategy could best add value.

Regional workshops were organised for each of the nine32 NPCC regions (East, East Midlands, London, North East, North West, South East, South West, Wales, West Midlands) across England and Wales. Invitations were sent to all 43 English and welsh forces, and to all PCCs via APACE. Representatives from 42 of the 43 forces attended the meeting, as well as stakeholders such as the Association of PCCs, British Transport Police, National Crime Agency, National Commercial Board, and Nottingham Fire and Rescue.

A.4 Stakeholder interviews

A series of one-to-one interviews were conducted with key stakeholders relevant to Shared Services in policing. Stakeholders included representatives from the following organisations:

Association of Police and Crime Chief Executives

Avon & Somerset Police

Representatives from the Multi-Force Shared Service

Home Office

Government shared service leads

Metropolitan Police

Ministry of Justice

National Police Chiefs Council

West Midlands Police

In addition, the following suppliers were also interviewed:

Capgemini

Oracle

SSCL

Microsoft.

32 The East, London, and South East regional workshops all took place in London.


B.1 Cost Assumptions

Central Staff Pay Costs

Director £ 105,000.00

Deputy Director £ 85,000.00

Lead £ 70,000.00

Analyst £ 50,000.00

External Support Assignment Costs

Medium £ 150,000.00

Large £ 250,000.00

IT Equipment - Capital Outlay

Per Central

Staff £ 3,000.00

IT Maintenance

% of IT

Equipment 20%

Option 1

Option 2

Option 3

Option 4

Option 5

Option 6

Central Staff

Director - 1

See the table below

1

See the table below Deputy Director - 1 1

Lead - 1 2

Analyst - 3

External Support

Medium - 3 See the table below

3

See the table below

Large - 2

IT

Equipment £ -

£ 9,000 See the

table below

£ 21,000

See the table below

Maintenance/yr £ -

£ 1,800

£ 4,200

Transformation

Additional Transformation Costs

£ -

£ -

£ -

£ 1,425,000

The transformational costs were calculated on the basis

of the Transforming Forensics Programme. See

B.2 below.


B. Economic appraisals

Table 8.1: Staffing and Cost Assumptions for Each Option


External support costs

Options will require a varying amount of external support. It’s assumed that a combination of medium-sized and large-scale assignments are likely to be delivered by external consultants. The estimated costs of medium and large assignments are £150k and £250k respectively, and the number of each type of assignment estimated for each option is in the table above.

Inflation and Present Value Rates

The below discount factors were applied for the economic and financial analysis.

2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29

Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10

NPV multiplication factor

3.5% 1.000 0.966 0.934 0.902 0.871 0.842 0.814 0.786 0.759 0.734

Inflation - Non-Pay 2% 1.000 1.020 1.040 1.061 1.082 1.104 1.126 1.149 1.172 1.195

Inflation - Pay 1% 1.000 1.010 1.020 1.030 1.041 1.051 1.062 1.072 1.083 1.094

Table 8.2: Inflations and Present Value Rates

B.2 Calculating Cost of Centre of

Excellence Option 1

Option 1 assumes no central capability, and so there are no costs for the Centre associated with this option.

Option 2

Option 2 provides for a modest central capability of three staff at various grades (Table 8.1). The costs for this option include staffing costs, the capital cost of IT equipment, and ongoing IT maintenance costs. It is estimated that this option will require 3 medium-sized assignments each year.

Option 3

Option 3 provides for a larger central capability than option 2 of seven staff at various grades (Table 8.1). The costs for this option include staffing costs, the capital cost of IT equipment, and ongoing IT maintenance costs. It is estimated that this option will require 3 medium-sized and 2 large-scale assignments p.a. initially.

Option 4

The main costs assumptions for option 4 are the same as for option 3 with the addition of transformation costs relating to the formation of a national shared service capability for a single function.

In addition, there are transformation costs relating to the formation of a national shared service capabilities at least one sub-function in scope of this business case. In estimating these costs, prorated costs of delivering the Transforming Forensics programme were used.

The total revenue expenditure for the 4 functions in scope of this business case is £352M,

compared to the revenue assigned to forensics functions of £372M33. This represents a factor of 94%, which applied to the Transforming Forensics Programme equates to £10M. This is a conservative view of costs, as it is based on all four functions in scope, rather than just one.



Option 5

Option 5 provides for a substantial central capability under the Transformation Programme (Table 8.1). The costs for this option include staffing costs, the capital cost of IT equipment, and ongoing IT maintenance costs. It is assumed that the CoE will operate as per option 3 and the national approach will be implemented by the Transformation Programme team supporting forces.

In addition, there are transformation costs relating to the formation of a national shared service capabilities for all the functions in scope of this business case. In estimating these costs, prorated costs of delivering the Transforming Forensics programme were used.

The total revenue expenditure for the 4 functions in scope of this business case is £352M,

compared to the revenue assigned to forensics functions of £372M34. This represents a factor of 94%, which applied to the Transforming Forensics Programme equates to £10M.

Option 6

The costs for Option 6 are the same as for Option 5. The variation between these two options is illustrated within the benefits section below.

B.3 Benefits Assumptions

Changes in revenue between 2013 and 2017 (Source: POA Data):

Between 2013 and 2017:

Total force revenue expenditure has reduced by 5%

Revenue expenditure for all enabling services has increased by 5%

o This is largely driven by big increases in: Legal Services (51%) ICT (16%) Professional Standards (26%) Corp Development (22%) Insurance/Risk Management (23%)

For in scope functions there has been an increase of 3% o If we exclude the two increases: Legal Services and Training, the remaining

functions (HR, Finance, Procurement) sees a reduction of 8%

Taking those forces which have at least one shared services, for in scope functions, there is an increase of 1%

o Excluding legal services and training, this becomes a reduction of 12%

Using reductions of 8% or 12% due to continuous improvement seem a) quite large as continuous improvement gains, and b) too restricted in terms of functions and link to shared service as the delivery method. We have therefore used 1% CI in the baseline.



B.4 Benefits Baseline

The benefits baseline has been calculated based on existing shared service arrangements and an estimation of the shared service arrangements planned for the next three years and beyond.

Current Shared Services: For existing shared service arrangements, we have assumed that there is an annual trend of continuous improvement equivalent to 1% of the revenue expenditure for the functions in scope35.

Planned Shared Services: In the survey conducted in Phase 1, forces reported which sub-functions they planned to move to a shared service in a) the next three years and b) three years plus. The benefits derived from the implementation of these plans is based on the revenue expenditure for the sub-functions.

Benchmark benefits for public sector organisations entering shared services is 25%36. Although some current policing shared service arrangements have reported up to 44% benefits, we have taken a lower 15% to 20% estimate.

It’s assumed that planned shared services will gain further savings through continuous improvement after the first two years of operation at a rate of 1%.

Altogether, the baseline has been calculated as £69M to £82M over 10 years.

B.5 Benefits Variables

We have made an assessment of benefits using the survey returns, of the likely scale and pace of planned change for the baseline and then calculated the level of cashable benefit above the baseline which an option must deliver in order to breakeven. This means that each option has a range of possible benefits, and in reality, the option may deliver a combination of these.

Four variables were identified to build the possible option benefits:

1. An increase in the level of continuous improvement for existing shared service

arrangements

As described in the Benefits Baseline section above, it is anticipated that where there are established shared service arrangements, they will continue to improve and therefore continue to produce savings. It is assumed that the influence of a central capability could increase the level of continuous improvement.

2. Additional benefits derived through new forces adopting shared services

A central capability may be able to support the onboarding of forces into shared service

arrangements.

Where an option enables the introduction of a new force into a shared service arrangement, the revenue cost on which to base the saving is an average cost for the in scope enabling functions. As with the planned shared services described above, we have assumed the benchmark savings of 25%. This benchmark was further refined to a range of 20 to 30% for option 3 based on discussions with stakeholders.

35 CIPFA POA Data 2017

36 PA Consulting research on shared services


It’s assumed that new shared services will gain further savings through continuous improvement after the first two years of operation at 1%.

3. Benefits from forces achieving more savings from their existing plans for shared service

arrangements

With a central capability forces would be able to draw on the lessons learned from earlier

projects, as well as the resource and expertise within the central capability to release a

greater level of benefits than they could have achieved alone.

4. An increase in benefits derived through the acceleration of planned benefits

A central capability may be able to support the acceleration of benefits for shared service

implementations which are already planned. By standing up the shared service earlier,

forces will be able to claim benefits earlier, adding to the final total.

5. Benefits derived through the implementation of a nationally designed service

Establishing nationally designed shared services has the potential to bring considerable benefits. The details on how these benefits are calculated are below.

Nationally Designed Shared Services (Options 4, 5 and 6):

Options 4, 5 and 6 provide for national shared service arrangements some or all four of the in-scope functions. In order to calculate the benefits, the revenue expenditure of those forces and sub-functions which do not currently have shared services37 was estimated, and the benchmark 25% savings was applied for up to 3 sub-functions for option 4, and for all sub-functions for options 5 and 6.

In doing this it was assumed that those already in a shared service will not receive these initial benefits a second time by joining the national capability.

It’s also assumed that the planned shared services reported in the survey will no longer take place and will be superseded by forces joining the nationally designed shared service arrangements.



B.6 Assumptions behind NPV analysis

The following tables set out the detailed assumptions behind the NPV analysis for option 3.

Table 8.3: Benefits and Cost Assumptions for NPV analysis


At the regional workshops, the force and PCC representatives assessed each option.

C.1 Option 1

Strength Weakness

Enables forces to develop at their own pace in accordance with their needs

Pace is likely to be slow and therefore takes too long and misses targets

Any solution would be tailored to local needs with local accountability and employment

Will not necessarily aid interforce collaboration

Opportunity for local innovation that may have wider applicability

With 43 different ideas, standardisation could be limited as there is no coordination, consistency or impetus

Enables forces to maintain autonomy and prioritise activities in accordance with their local needs and available resources/skills

Require cost and resources from forces to enable change

Will facilitate more local partnerships Inhibits future wide collaboration or mergers

Least disruptive to forces and allows for targeted intervention

Larger forces benefit most

Can be financially better in some cases than existing Shared Service arrangement

Doesn’t meet the 2025 policing vision and associated cash targets

Table 8.4: Option 1 Strengths and Weaknesses

C.2 Option 2

Strength Weakness

Enables sharing of best practice and reduces duplication of effort

This already exists in theory and change is likely to be slow

Forces continue to retain some control Not necessarily exploiting all the benefits and danger that this doesn’t leaf to anything substantive

Continues to provide local ability to develop in line with force needs and priorities

Police ITCO is not a good example

Enables the choosing of preferred partners that is a suitable fit

Cost for creating a central team likely to been paid by the forces

Guides the current direction of travel Could yield in low returns if easy areas are selected

Additional change resources to support resource/skills gap

Collation of best practice may not create the critical mass needed for change

Accelerates progress opt Outs would reduce benefits to all

Builds on existing approach to learn from experience and facilitate sharing of best practice to enable speedier delivery of benefits

Lack of resources to support resulting in a lack of momentum


C. Workshop output: option strengths and weaknesses

Strength Weakness

Enhanced sharing may lead to more take-up of opportunities

May not reduce transaction costs, for example if not coordinated and lead nationally

Likely to garner support from PCCs and Chiefs

No compulsion and therefore - just a more expensive way of doing the same thing


C.3 Option 3

Strength Weakness

More active option so should make faster progress

Cost of central governance forum

Reduces duplication of effort Loses local requirements

Funding to buy-out of contracts will be attractive to forces to promote change

Inability of current and past nationally driven programmes to deliver

Retains local ownership with forces still feel in control

Likely to drive enforcers rates than facilitators

Consistent approach and comparators May fail due to institutional inertia and opposition

Will enable ‘laggers’ to be driven forward Dependent on individual CCs & PCCs reaching an agreement

Good balance between national steer/ strategy but with element of local decision making

Benefits may still be sub-optimal

encourages engagement with known framework

Lack of skill in sector of good practice

This model could better support programmes get the most VFM e.g. funding support or buying under wasteful contracts

Allows willing advocates to go first whilst providing direction to forces


C.4 Option 4

Strength Weakness

Less likely to be viewed negatively by Government

Perceived loss of sovereignty and control

Significant savings if correct services are identified

Difficult to agree areas of national design

Balance of control vs direction Cost of national forum

Consistent approach across forces making easier to collaborate

Who decides what is optional and what is not

Drives standardisation in some business areas

Will struggle to get support nationally


Strength Weakness

Ability to choose best solution for local needs How will local requirements be catered for

Provides National insight with local control Prolongs efficiency gains

Provides a chance to focus on standardised areas

Potential resource implications for forces

Takes maximum advantage of those areas closest or easiest - shows what can be achieved

Reduces time wasted on 'reinventing the wheel' / bespoke design of simple processes


C.5 Option 5 and Option 6

Strength Weakness

Quicker rate of change as there is 1 way and not 43

Less buy-in from forces

Reduces cost for local maintenance No local control

Good pricing through economies of scale and large scale procurement

Against Labour’s policy

National consistency

Cost of national service will be top-sliced, so police forces with greater grants will feel the burden more than others

Able to overcome individual PCCs who want to do everything alone

Doesn't address local issues and priorities

Supports wider public sector initiatives History would suggest doomed - too big

Will facilitate greater operational collaboration Slow to implement and therefore take a long time to achieve efficiencies

Shared learning Bureaucracy

It works for global international organisations, so why not for policing

Level of resource required to enable change

Easier to Benchmark Can a national model deal with existing local arrangements

Table 8.8: Option 5 and 6: Strengths and Weaknesses


D.1 Overview

Appendix D lays out the detailed design for option 3 which explores the establishment of a CoE.

D.2 CoE Business Model

The CoE business model outlines how the CoE will create value and the mechanisms through which it will be delivered. This includes the services delivered, resourcing strategy, staff roles and capabilities, funding legal status and governance.

D.2.1 Customers and lifecycle

The CoE will provide services to two main customer groups:

1) NPCC, APCC (and potentially the Home Office):

The Centre of Excellence will provide services aimed at providing benefit to policing as a whole and improve national alignment and consistency. These services will typically be more strategic and focus on elements such as strategy, standards, thought leadership and analysis.

2) Individual Forces:

The Centre will provide services to individual forces, or groups of forces, who either have an existing shared services capability or are considering developing one. These services will align more closely with the shared services life cycle (outlined below) and will include services like supporting business case development, brokering a shared service agreement, benefit realisation and implementation.

In addition to the two groups above, other shared services partners e.g. local authorities and other emergency services, will also benefit from the services provided by the CoE, if they are part of a shared services arrangement with one or more of the forces.

Make it Essential

Strategy

The strategy outlines the vision and articulates what it is seeking to achieve. An indicative view of how the strategy is going to be delivered as well as the benefits associated, explicitly identifying why a change from the current state is required, is developed as part of this activity. It positions the proposed concept as the most effective way to ensure successful delivery of the strategy

Strategic Outline Case (SOC)

Make it Ready

High-Level Design

Develops the concept into a strawman design. Although high-level, the design must be sufficiently detailed to enable stakeholders to make an indicative decision on whether to progress to the next phase, and therefore approve the required resource to develop the detailed design

Outline Business Case (OBC)

Detailed Design

Design must be sufficiently detailed to give stakeholders the necessary information and confidence to make a go/no-go decision on whether to implement the proposed model

Full Business Case (FBC)

Make it Happen

Implementation Delivery of the proposed design and transition of the existing organisation into the new model

Make it Better

Continuous Improvement

Ongoing activity which allows the established organisation to continually improve and develop through the onboarding of additional functions/services. Ensuring it remains fit for purpose and continues to maximise its potential benefit


D. Shared Services Centre of Excellence Operating Model Design

Table 9: Activities supported by the CoE

D.2.2 CoE Service definitions – a service catalogue

The below outlines the definitions of the service categories that the CoE could deliver on behalf of its customers. These are likely to be developed incrementally.

Service Category Definition

Strategy National vision for shared services across policing

Standards

The Police shared services standards define the best practice ways of working ensuring a common approach to shared services implementation and delivery across all the forces which is critical to enabling convergence and interoperability between forces as per the National Policing Vision 2025

Intelligence & Benchmarking

Provision of internal and external insights (including benchmarks) to ensure consistent application of best practice (including compliance), inform strategic planning and identify improvement opportunities

Knowledge Management Central source of shared services information and knowledge including SME network

Service Development Continuous improvement of the services, as well as the development of new services in order to best meet evolving requirements of the forces

Programme/Solution Development

Offering a structured approach for the design and development of shared services delivery programmes, ensuring these are successfully integrated into BAU on completion

Design and Implementation Support Forces in the delivery of shared services projects including design and implementation. This could take the form of assurance or direct provision.

Portfolio Management Single source of complete and accurate information across the shared services project portfolio to allow COE leadership to manage and prioritise effectively

Finance & Resource Optimisation

Management of agreed financing model to ensure funding and resourcing is optimised and strategic projects are appropriately prioritised. Advice on financing models for shared services, and exit strategies

Quality & Performance Management

Common framework underpinning a standard approach for defining and measuring shared services performance (against an agreed set of metrics). As well as guidance on the appropriate course of action should performance not meet the required standard

Comms & Change Management

Support the Forces in designing and delivering communications and change programmes for internal and external stakeholders

Process Improvement & Design

Provide a framework of best practice processes which can be integrated into existing systems and ways of working. Continually evaluate existing processes and identify improvements to generate cost, quality and time benefits for Forces

Service Establishment

Introduce forces which could potentially be a good match for convergence, brokering the initial discussions and advising on the final agreement between the parties e.g. governance model, exit strategy etc.

Benefit Management Determine and validate projected benefit profile to be delivered by police shared services

Business Case Development

Development and validation of the necessary business cases (SOC, OBC, FBC) in order to secure required support and funding

Sourcing

Collaboration with Forces and Police Commercial Organisation to support optimal commercial selection and management of shared services vendors to ensure force requirements and policing strategies are delivered

Technology Assessment Support the exploration and assessment of technology and digital enabled shared service solutions available in the market

Table 10: Definitions of the services provided by the CoE

D.2.3 CoE services for NPCC, APCC (and potentially Home Office)

The services provided by the CoE to NPCC, APCC (and potentially Home Office) are outlined in the table below. The proposed roll-out of these services has been prioritised using the colour code green-blue-purple. Services have been prioritised based on the benefit they are likely to deliver, how core they are to a shared services capability, and the speed at which the CoE is able to deliver them.


Green - Short-term (1 year) Blue - Medium-term (1-2 years) Purple - Long-term (2+ years)

Service Category Services

Strategy - Advise on the development of the national shared services strategy across policing - Provide subject matter expertise including a network of external shared services experts

Standards

- Define standards for agreed parameters (e.g. data, reporting, policies etc.) to ensure consistent design approach across forces and alignment with other national bodies e.g. PITCo’s ERP framework

Service Development - Continual identification of new services and service development to inform national strategy

Intelligence & Benchmarking - Ensure all compliance requirements are met - Collect data and insight from police shared services e.g. from operational reviews, shared services surveys and data analysis

Portfolio Management

- Single source of complete and accurate information across the shared services project portfolio to allow leadership to manage and prioritise effectively

Finance & Resource Optimisation - Management of funding model


- Define a standard approach for defining and measuring delivery performance (including KPIs) - Produce national shared services performance updates and reports

Comms & Change Management - Delivery of stakeholder and change management with regard to police shared services

Table 11: Timing of the CoE services available for NPCC, APCC and potentially Home Office

D.2.4 CoE services for forces

The services to be provided by the Centre of Excellence to the individual forces are outlined on the following pages. These will align much more closely with the shared services lifecycle, compared to the NPCC, APCC (and potentially Home Office) services, as they are more specific in nature.


Make it Essential Make it Ready Make it Happen Make it Better

Strategy High Level Design Detail Design Implementation Continuous Improvement

Service Category Strategic Outline Case Outline Business Case Full Business Case

Standards

- Best practice guidance on high-level SS ways of working - Provide initial consultation for those forces considering the implementation of shared services - Provide information and examples of required standards

- Advise on standards for agreed parameters e.g. data, tech, policies etc.

- Provide guidance on approach to implementation

Intelligence & Benchmarking

- Provides external and internal benchmarking data to articulate the potential benefits and ensure ambitious but realistic shared services aspirations

- Provide advice on design from insight and previous experience to ensure best practice is employed

- Provide clear guidance on what is required for compliance

- Use intelligence & benchmarking to recommend improvement opportunities - Provide relevant data collection templates to forces and produce required compliance reports

Knowledge Management

- Provide subject matter expertise to provide initial guidance - Provide previous examples of shared services success and benefits realised

- Provide templates and advice on design approach including examples of previous design documents

- Lessons learnt from previous implementations documented and shared

- Facilitate ongoing knowledge share between forces to improve service delivery



Service Development

- Provide examples of best practice and insight from the market on new services and service developments

- Share information on service development underway at more mature forces to ensure initial design can easily facilitate future development

- Embeds a culture of innovation & CI

Programme/Solution Development

- Provide insight on new and developing solutions from the market e.g. use of cloud, automation and AI

- Provide market leading thinking on expanding capability beyond traditional back office functions

- Development of new and innovative solutions

- Development and delivery of shared services implementation plans

- Design and delivery of continuous improvement programmes

Design & Implementation

- Manage business case production and approval process e.g. stakeholder distribution, briefing sessions & review meetings etc. - Provide templates and examples of project management tools used by previous forces during shared service design

- Project manage the implementation and transition to a shared service - Provide templates and examples of project management tools used by previous forces during shared service implementation

- Design and delivery of continuous improvement programmes

Finance & Resource Optimisation

- Advise on proposed high- level financial approaches and benefits to ensure they are sufficiently realistic & robust

- Provide advice on shared services resource and capability requirements - Develop approach for shared services operating a service charge model (rather than the typical flat fee)

- Identify and share new efficiency opportunities




- Provide examples of KPIs used across other forces and organisations

- Quality assure the shared services design

- Provide service catalogue and SLA examples and templates - Recommend proposed approaches to capturing and monitoring agreed KPIs and SLAs

- Advise on standard approach for defining and measuring delivery performance (include. metrics) - Provide relevant templates

- Produce required performance reports

Comms & Change Management

- Delivery of stakeholder and change management throughout the design and implementation phase -Provide change mngmt toolkit including templates and examples of comms used by previous forces during shared service design and implementation - Provide advice on leadership requirements and support recruitment process where relevant

Process Improvement & Design

- Design of shared services processes and organisation

- Identify ongoing opportunities for process improvement including new ways of working

Service Establishment

- Identify forces which could be a good match for shared services convergence and proactively make the relevant introductions

- Provide neutral advice on contractual arrangements and models for forces moving to a converged solution, including governance models and exit strategies/arrangements - Oversee the establishment of the formal agreement between forces and act as a neutral facilitator

Benefit Management - Calculate and validate the projected benefits to be realised through a shared service - Advise on best practice approach to capture and report on

shared services benefits

Business Case Development

- Provide relevant business case templates and examples - Support the force with business case production and validation

Table 12: Timing of the CoE Services available for forces


It is also important to acknowledge the services and responsibilities that the Centre of Excellence will not be delivering on behalf of its customers, it will not:

1. Be responsible for direct political engagement 2. Be responsible for direct stakeholder management 3. Own or be accountable for any of the force’s business cases.

The extent to which the CoE supports the sourcing of services and assessment of technologies required by a shared services operation, e.g. ERP systems, is explored through the options analysis below. Given the existing and future bodies that deliver sourcing activities on behalf of the forces e.g. PICTCo and the proposed Police Commercial Organisation this area warrants further work, in order to ensure sourcing roles and responsibilities are clear and no duplication occurs.

It is proposed that the CoE will perform the intelligent customer function (option 2) regarding shared services. Services provided will include:

1. Shape and collate national requirements 2. Identify appropriate vendors and solutions available in the market 3. Provide insight on propositions offered by vendors and solutions identified 4. Provide advice as required throughout the procurement process – including

tender evaluation and contractual SLAs/KPIs.

Table 13: The Coe’s scope in relation to procurement shared services

D.2.5 Lifecycle and Delivery Approach

Two distinct groups will provide shared services support to the NPCC, APCC (and potentially Home Office) and the forces:

1. Shared Services Centre of Excellence permanent staff: a small number of full-time

employees of the Centre of Excellence (or entity of which it forms a part)

2. Third party: some services are anticipated to be delivered by a third party. Services

requiring third party support would typically:


Be short term in nature;

Require high and dedicated resources; or

Need a high level of expertise.

These resources would be engaged on an ad hoc basis from a pre-determined provider (s) operating off a defined framework. This framework will be commissioned and overseen by the CoE. The provider(s) will have capacity to scale up to meet requirements at short notice, delivering a flexible and commercially optimal solution, particularly when compared to employing the equivalent resources directly.

There will be two types of third party engagement:

Centre of Excellence – third parties will be commissioned and contracted directly by the

Centre of Excellence to do work on behalf of the NPCC, APCC (and potentially Home

Office). This work will be funded by the Centre of Excellence and has been built into the

financial case.

Individual Forces – forces may engage third parties to deliver shared services related

work at their discretion. Although this work will use the framework commissioned and

overseen by the CoE, it will be funded by the individual forces, who will contract directly

with the third party. The Centre of Excellence will have no accountability for this work.

Figure 3: How a Third Party will support the CoE staff and forces

D.2.6 A catalogue of the roles and responsibilities and workforce model/resources

It is expected that the CoE will have 5 permanent staff in year 1, increasing to 7 from year 2 onwards.

Staff FTE Yr. 1 FTE Yr. 2 onwards Fully Loaded Cost

Director 1 1 £105,000

Lead 1 2 £70,000

Analyst 3 4 £50,000


Figure 4: Planned CoE staffing and organisation

The CoE Director will ultimately be accountable for the Centre. Currently it is assumed that no resources are shared with the proposed Police Commercial Organisation or other groups. There may be an opportunity to reduce the number of more junior roles required through pooling these resources.

D.2.7 A design of the capabilities necessary for the CoE

Given the services that they will provide to their customers there are key capabilities required.

Essential capabilities:

1. Account management:

Working with the forces to understand current issues/requirements/concerns

Work with forces to develop solutions (existing and new) to best meet their needs

Support in the development of a “force plan” to enable the delivery and continuous improvement of the agreed solution

Navigate the forces through the CoE offering. Ensuring a positive experience and developing a long-term relationship with force stakeholders

2. Best practice/market understanding

Business case production, validation and evaluation expertise

Detailed understanding of shared service solution benefits and best practice approach to realising, measuring and tracking benefits delivered

Strong understanding of best practice across policing, as well as the wider public and private sector

Extensive market research

Access to external benchmarking and network of external SMEs

3. Analytical support

Understanding of internal and external compliance requirements

Document management including maintaining a central library of knowledge management resources, previous document examples and templates

Production of required reports including KPI and benefit tracking

Facilitation of inter-force knowledge management events

Project/programme management capability

Required capabilities:

1. Stakeholder management

Strong working relationship between the Centre of Excellence, the individual

forces, and their functional partners/vendors

Strategic management of CoE external relationships


Change management expertise

Fit for purpose governance structure with appropriate escalation routes

Strong communication strategy and management

2. Demand & capacity management

Identify force requirements (short and long term) and ensure CoE delivery

capacity is forecasted, sourced and executed in alignment

Prioritise demand in order to maximise value

Challenge demand to ensure services provided are required and meet the real needs of the business

Ensure complete transparency (including any financial implications)

Clear process and point of contact for requesting CoE support

Management of third party resource (internal requests and commercial contracting)

3. Functional expertise

Provide function specific advice and consultancy

Detailed understanding of best practice within typical shared services functions (HR, Finance, Payroll, Procurement, Legal etc.)

Understanding of latest technology solutions available and leading approaches exhibited in the market

Network of function SMEs

Desirable capabilities:

1. Service marketing

Ability to articulate the services offered by the CoE, their value to the individual forces, and contribution to the Policing Vision 2025 i.e. CoE business development

Articulation of the CoE strategic roadmap including the new future services

Production of promotional material and attendance at relevant national policing events

Internal market research to develop the voice of the customer

2. Issue resolution

Ability to prioritise and mobilise CoE resources (internal and third party) to react quickly to unplanned issues/opportunities

Identify and resolve service issues with minimal disruption to force operations

Deliver an efficient and streamlined issue resolution service to forces ensuring business continuity

Identification of process improvement opportunities

3. Vendor management

Detailed knowledge of shared services vendor landscape

Good understanding of vendors and their service propositions enabling them to provide advice to forces on vendor selection, procurement, service delivery, operational performance and compliance


Collaboration with Police Commercial Organisation to ensure optimal commercial management of external service providers

The capabilities required by each of the CoE permanent staff roles will vary. An indicative view of the priories for each of the 3 roles is outlined below:

Figure 5: Indicative priorities of each CoE staff

It is anticipated that there will be some work that, due to its short-term nature, highly dedicated resource requirements, and/or the level of subject matter expertise required, are better delivered by a third party.

On behalf of the NPCC, APCC (and potentially Home Office) the CoE will commission, contract and fund national projects benefitting all forces with, or considering, a shared service solution. We have assumed a certain number of projects each year for the business case. Some example projects, along with indicative costs and volumes of third party support, are outlined below.

Project Cost Indicative FTE Indicative Duration / weeks

Medium £150,000 2-3 8-10

Large £250,000 3-4 10-12

Table 14: Indicative type of support required from the Third Party

Examples:

Medium: • Development of best practice shared services tools and methodology library • Assessment of commercial opportunities for policing shared services

Large: • Development of national shared services standards to drive consistency across

forces • Development of national shared services strategy • Facilitation and delivery of national shared services data gathering, surveys

and/or assessments • National shared services review e.g. to identify improvement and efficiency

opportunities • Design and delivery of national change management programmes

It is anticipated that as the CoE becomes more established the volume of third party assignments will decrease over time as projected below:


Figure 6: Indicative level of demand on the Third Party

D.2.8 Workforce costs

The CoE permanent staff and their associated IT costs are summarised below:

Staff costs:

Staff FTE Yr. 1 FTE Yr. 2 onwards

Fully Loaded Cost

Ann. Staff Costs Yr. 1 Ann. Staff Costs Yr. 2 onwards

Director 1 1 £105,000

£325,000

£445,000 Lead 1 2 £70,000

Analyst 3 4 £50,000

IT Costs:

Cost Cost per FTE

IT Equipment £3,000

Maintenance (20%) £600

Table 15: Planned CoE permanent staffing level and IT

Anticipated third party costs are summarised below:

Project costs:

Size Annual Volume Yr. 1-3

Cost Yr. 1-3

Annual Volume Yr. 4-6

Cost Yr. 4-6

Annual Volume

Yr. 7 onwards

Cost Yr. 7

onwards

Medium 3 £450,000 2 £300,000 1 £150,000

Large 2 £500,000 1 £250,000 1 £250,000

Table 16: Indicative cost of the Third Party support

Key assumptions:

• Assumes no resource sharing with the proposed Police Commercial Organisation or

other groups. May be an opportunity to reduce the number of junior roles required through pooling resources

• IT equipment needs to be replaced every 5 years • Each FTE incurs an annual IT maintenance cost of £600 (20% of IT equipment cost) • CoE permanent staff are located in existing facilities and no seat charge costs are

incurred • All third party costs are at fixed fee • Medium third party projects cost £150k and large projects cost £250k


The total annual costs peak during year 2 as the additional 2 FTE (x1 lead and x1 analyst) come on board. These costs then steadily decline due to reduced reliance on third parties, stabilising in year 8 at £849k. It should be noted that these costs do not include inflation.

Total Annual Costs (excl. inflation):

Running only

Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr. 6 Yr. 7 Yr. 8 Yr. 9 Yr. 10

Permanent Staffing Costs

£325k £445k £445k £445k £445k £445k £445k £445k £445k £445k

IT Equip Costs

£15k £6k - - - £15k £6k - - -

IT Main Costs

£3k £4k £4k £4k £4k £4k £4k £4k £4k £4k

External Support Costs

£950k £950k £950k £550k £550k £550k £400k £400k £400k £400k

Total £1,293k £1,405k £1,399k £999k £999k £1,014K £855k £849k £849k £849k

Table 17: Indicative running cost of the CoE

D.2.9 Options and recommendations for financing and funding model for the CoE

There are three possible funding options for the CoE’s set up and running costs:

• Contribution from the forces – contribution from each individual force’s budget • Top-slice police grants – required contribution is taken from the central budget before it

is distributed to the individual forces • Central funding – for example from the Home Office or Police Transformation Fund.

These options are evaluated below:

Table 18: Pros and cons of funding options

It is recommended that the CoE be funded through a combination of central funding and a contribution from forces.


Strategic alignment

VFM

Deliverability

Stakeholder buy- in


effectiveness

Mitigates strategic

risks

Certainty of

Contribution funding

from force Easier to

manage in the long run

Difficult to Resistance if

administer (e.g. >£60k p.a.

determining the More burden

amount, needed to show clear and

tracking etc.) immediate

benefits

Top-slice police grants

More straightforward to administer Easier to scale

N/A – none of the options influences the total amount of costs or benefits of the CoE

Not dependent on political influence

As per Option 1, but less administrative burden

Unpopular given that force budgets are already under pressure

Central funding (e.g. Home Office, PTF etc.)

Difficult to scale Less resistance from forces

Less future certainty – dependent on central government policies

It is anticiapted that the cost of CoE setup will be c.£0.5m which will be bourne by a central body, potentially the Home Office. If the running costs of the CoE are to be funded by a fixed contribution from the individual forces, the cost would be c.£30k per force in year 1 but then stabilise down to c.£23k per year as the reliance on third parties reduce. This assumes an equal contribution by each force, although there would be the option to weight contributions by size of force.

D.2.10 Options and recommendations for the CoE as a legal and contracting entity

There are four possible options for the CoE’s legal status:

• Section 22a collaboration agreement between forces • New legal entity • Lead force – one force acres on behalf of the others as a ‘single face’ • ‘Piggy-back’ on an existing entity.

These options are evaluated below:

Accelerates Strategic VFM Deliverability Stakeholder Mitigates scale, pace alignment buy-in strategic and risks effectiveness

Section 22a collaboration

Governance / decision- making could become cumbersome and time- consuming – impacting on pace

Fully collaborated organisation - increasing forces’ ownership and engagement

Sizable cost, effort and time to set up - hard to justify given the size of the CoE

Getting to all forces to agree shared risks and liabilities is non-trivial, especially if forces see these risks as not proportionate to the benefits of the CoE

Support from both forces and PCCs Fully accountable to forces and PCCs No change local

New Legal Entity

Access to specialist skills to enable forces to accelerate the pace

Aligns to the government shared services policy

(c. 7 FTEs) Will need to handle and take on TUPE burden

Simple governance and quicker decision- making

Independence to act in the interest of all force and reducing pre- conceived ideas (e.g. partiality to certain forces)

employment

Lead Force Having to manage

disagreements between forces means that the Lead Force may not be seen as acting in the interest of every force – impacting on pace and level of collaboration

Quick and low effort to establish No new infrastructure required

The Lead Force may find it hard to take on a lot of risk and burden due to its ‘first port of call’ role

‘Piggy-back’ Access to Consistent Using the existing facilities Will be seen Legal scope specialist with the and separate legal ‘neutral’ if and

skills to existing standard– less set-up cost hosted by a capacity of

enable accountability Simpler delivery – the national entity the ‘hosting

forces to framework CoE is only a ‘function’ of (e.g. Police entity’ may

accelerate the hosting authority Commercial not fit the

the pace Simple and more efficient Organisation, CoE’s

governance College of future

Policing, growth and

Home Office, evolution

PICTCo)

Table 19: Pros and cons of entity options

D.2.11 Options and recommendations for the governance model

Given the size and scale of the CoE ‘piggy backing’ on an existing entity strikes the right balance between effectiveness and practicality. It is recommended that the CoE is a function within the proposed Police Commercial Organisation entity, allowing the NCB to govern both organisations under one decision-making process.

Figure 7: Recommended governance model for the CoE

D.3 Implementation roadmap

An indicative roadmap for 2019 to take the CoE from business case through to implementation is outlined below.

Tasks J F M A M J A S O Nov. ’19 onwards

OBC approval

FBC draft & approval

Finalise costs & benefits

Develop App. E

Engage stakeholders

Agree funding model w/ stakeholders

Secure setup funding from HO

Agree subscription cost with forces (in conjunction with PCO)

Develop invoicing process

Formalise CoE entity

Initiate setup with PCO

Finalise function within PCO entity

Agree staff host location

Develop longlist of potential sites

Evaluate & shortlist potential sites

Select preferred site

Agree with property owner/leaseholder

Recruit CoE staff - Director

Draft job descriptions


Tasks J F M A M J A S O Nov. ’19 onwards

Gain relevant HR approval Advertise internally (& then externally if required)

Shortlist and interview

Appoint (incl. notice period)

Recruit CoE staff – Other staff

Process as above

Onboard staff

Prepare induction process & materials

Deliver induction

Team in place

Receive funds from stakeholders

Prepare & issue invoices

Launch

Recruit remaining staff

Table 20: CoE implementation roadmap

As outlined in the roadmap above the key milestones to ensure the CoE is launched within the calendar year (2019) are:

1. FBC approved (including approval for immediate implementation) - March 2019 2. Commence recruitment process – April 2019 3. Team recruited and onboarded – September 2019 4. CoE Launch – October 2019.

In order to meet these milestones, it is critical that this business case is approved by the end of March 2019 and recruitment of the permanent team commences immediately.


E.1 Introduction and context

As part of ongoing dialogue with the Home Office on the future spending settlement for policing, the NCB has asked for further detail on a more radical end-state for shared service convergence that goes beyond the CoE model that this OBC recommends. This would be closer to the options 5 and 6 presented in the OBC.

The sections below outline what this national approach may look like, assesses the opportunities and challenges it would create, and provides a very indicative and initial assessment of costs and benefits.

E.2 The CoE could be a starting point towards a Nationally Driven Convergence Approach

Ultimately, a national and mandated approach may be necessary to drive significant standardisation and convergence, which could both deliver further financial savings and also provide the business support infrastructure that could accelerate inter-operability and resilience.

The recommended way forward in this OBC, Option 3 (Intervention Convergence), will operate within the existing framework of force-led adoption, focussing on accelerating standardisation and convergence across police shared services. It could therefore act as a critical staging post in policing’s journey towards nationally driven convergence (as illustrated by the diagram below), rather than being an end-state in itself.

Figure 8: A journey towards a national convergence

E.3 Potential shapes of a Nationally Driven Convergence Approach

There are three broad options for a Nationally Driven Convergence Approach (each of which will have many variants):


E. Potential end state – a Nationally Driven Convergence Approach

Sub-option Description

1: Forced convergence

Mandate all forces to deliver their business support activities using one, or a small number of, existing shared service operations e.g. MFSS, SSCL. This could be done organically (when contracts expire) or forced (quicker, but with extra cost to exit contracts early)

2: Regional hubs Mandate all forces to consolidate their business support activities into a number of regional hubs centred around a common technology – this may be a mixture of existing and new capabilities.

3: Outsource Outsource all forces’ business support activities to third-party supplier(s)

Table 21: Potential sub-options behind a National Approach

A high-level assessment of the opportunities and challenges of a nationally driven convergence approach against the CSFs is shown below:

# CSFs Opportunities Challenges

1


Once implemented, would result in significant convergence

Increased standardisation and consistency across processes, standards and systems

Common data sets allowing more robust management information, analysis and insight

May need to unpick existing agreements and operations between forces, and between forces and other partners e.g. local authorities

Does not address local issues and priorities

Require wholesale meeting of minds and agreement.

2

Strategic alignment

Enables the Policing Vision 2025 and increased inter-force operational collaboration

Erodes force level accountability for delivery of business support activities

3

Value for money

Reduced running costs from consolidating function staff and sites releasing more budget to support front line policing

Fewer shared services operations increasing focus & investment in innovation resulting in improved customer service

Consolidated spend - increasing buying power with suppliers

Different starting points across the forces which adds significant complexity to implementation and may result in slow benefit realisation

High cost to deliver and transition, payback currently unclear

Cost of ‘buying out’ existing shared service arrangements could become non-trivial

4

Deliverability

Greater investment in policing from

Government may allow quicker implementation

Needs extensive central capability - on par with major programme such as Transforming Forensics

High level of change may result in significant national disruption and distraction from frontline policing

Mandating a solution may meet resistance from forces

5

Stakeholder Buy-in

Strong Central Government buy-in

and some ambitious local stakeholders

Does not address local issues or priorities

Potential staff reductions, relocations and TUPE implications may be complex and costly

Even with mandation the approach and solution will require buy-in and agreement from a very broad range of stakeholders which will be controversial and time consuming


# CSFs Opportunities Challenges

6


Support from Central Government

Some forces and PCCs are likely to resist a national approach and their resulting loss of local control

There are some specific considerations when evaluating option 3. Outsource which are not applicable to the forced convergence and regional hub options. These are detailed below:

# CSFs 3: Outsource

1


Not many vendors have capacities to serve all 43 forces

3

Value for money

Investments for modernising the service can be accessed through the vendors that are not available in-house

A single national vendor will reduce policing’s buying and negotiating power

4

Deliverability

Can be implemented quickly – once appointed, vendors will press on in order to meet the agreed SLAs

Forces will need significant commercial capabilities to manage major vendors and national contracts – which will be higher value and higher risk

5 Stakeholder Buy-in Forces may be uneasy relying on private sector given past experience


Outsourcing is increasingly seen as a higher political risk (e.g. Carillion)

Table 22: Opportunities and challenges surrounding a Nationally Driven Convergence Approach

The assessment above is a high-level preliminary evaluation and is only intended to highlight the factors the NCB may need to consider should it decide to explore a Nationally Driven Convergence Approach further. This will require further analysis, modelling and stakeholder engagement to validate the assumptions before any recommendation can be made.

E.4 High-level cost and benefits estimate

A Nationally Driven Convergence Approach would require a national design and operation of all police shared services, with strong/mandated central support working in close collaboration with forces. It is therefore assumed that the cost and benefits of this approach are similar to those of Option 6 – Mandatory Convergence – discussed in 4.11 of this document. Based on this assumption, high-level indicative cost and benefits of the Approach are estimated as below:

In £m over 10 years

National Convergence Approach

PV of Costs 120 to 149

PV of Benefits 204 to 306

NPV of the option 84 to 157

Low scenario assumes 2/3 of forces joining the national approach whereas the high scenario assumes all forces

Table 23: A high-level estimate of the Nationally Driven Convergence Approach cost and benefits

Indicative costs and benefits require significant further analysis and validation with relevant stakeholders. No optimism bias has been applied at this stage. The range in costs and benefits are driven by the number of forces implementing changes to their shared services operations:


i) Low End: two thirds of forces – to reflect a national approach utilising existing shared services operations (some forces will see no changes to their current operation & therefore incur no incremental costs/benefits).

ii) High End: all forces – to reflect a completely new national approach.

E.4.1 Key changes since the original OBC (September)

The key changes since Option 6 was evaluated in September are summarised as:

E.4.2 Costing assumptions

The cost estimates were based on the same assumptions used for the other options as described in Appendix B. The key assumptions that drive the costs are as follows:

The CoE will be set up and run as per option 3

Force cost was estimated based on £40K to £60K per FTE. For example, if there are 10

FTEs in HR and they are in scope of transformation, the relevant forces will need to fund

£400K to £600K. These estimates include the cost redundancy, business and IT

changes and local teams.

No early termination fees from cancelling existing shared services contracts will be

applicable due to a 5-year implementation period (i.e. enough time to let the contracts

expire)

Based on the past programme examples such as Transforming Forensics Programme,

the transformation programme team will need c. 40 FTEs over 5 years at £1,300 per

day.

E.4.3 Benefit assumptions

The cost estimates were based on the same assumptions used for the other options as described in Appendix B. The key assumptions that drive the costs are as follows:

25% savings in running costs across all sub-functions that fall under Finance, HR, L&D

and Procurement

Those forces that are already in a shared services arrangement will not realise additional

benefits through the Nationally Driven Convergence Approach

There will be little benefit during the first two years. Benefit will gradually ramp up from

year 3, reaching a steady-state in year 5 and beyond

For low-end scenario, 2/3 of forces will join the national approach. 1/3 of those already

in shared services (e.g. Met, MFSS) will not.

<End of document>


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