Productivity at Reading Borough Council

July 2024

Introduction

1. Over the past seven years, Reading Borough Council has transformed its services and operations. In 2017, the Council was in a precarious financial position, with productivity hampered by ineffective legacy IT arrangements and a lack of corporate capacity and capability (including HR, procurement, finance, and ICT), all of which had been cut to protect frontline services. The Council has worked hard to address these shortcomings, investing in new technology, officer capacity, and driving sustainable savings through different ways of working.
2. Today the Council is financially stable, with a healthy level of reserves, and continuous improvement is embedded across the organisation. This transformation has been delivered against a background of increasing demand for council services, most notably adult and children’s social care, and homelessness provision. This paper sets out what we have done and seek to deliver in future to continue to improve productivity across the organisation.
3. Our 2024/25 budget is summarised in the table below:

Council Area	Gross Expenditure £m	Gross Income £m	Net Budget 2024/25 £m
Directorate of Communities & Adult Social Care	104.628	(47.741)	56.887
Directorate of Economic Growth & Neighbourhood Services	76.053	(56.649)	19.404
Directorate of Resources	37.314	(18.179)	19.135
Chief Executive Services	7.925	(6.294)	1.631
Children’s Services	59.682	0.000	59.682
Corporate Budgets	91.676	(80.529)	11.147
Total Budget	377.278	(209.392)	(167.886)

4. This document sets out our plans in three parts:

• Projects and actions delivered to date, which have ensured that Reading Borough Council is in a financially sustainable position.
• Projects and actions currently underway to deliver continuous improvement and our transformation programmes which focus on customer service excellence, service efficiency and use of technology.
• Our plans for future projects and actions, including expanding the use of AI into wider service areas.

5. In response to the guidance provided, this document also includes key information relating to the Council’s use of agency staff and our EDI activities. Barriers to further progress are also set out for the Department’s consideration.

Key facts about Reading

The population of Reading Borough (174,200) is very diverse, with 32.9% of the population being of global majority, up from 25.2% in 2011. A wide range of languages are spoken, with the most popular after English being Polish, Nepalese, Romanian, Urdu, Portuguese, and Spanish (Census, 2021).

Reading has a strong economy: Reading’s workforce ranks 4th in the UK for productivity and 6th for qualification levels (Centre for Cities, 2024). The Greater Reading area is forecast to be the fastest growing area in the UK over the next 3 years, with annual GVA growth of 2.5% (EY, 2024).

At the same time there are persistent inequalities, with 5 Lower Super Output Areas in the most deprived 10% nationally (Index of Multiple Deprivation, 2019).

Reading Borough Council directly employs 1,815 staff, with a further 559 staff employed by Brighter Futures for Children, a company wholly owned by the Council which delivers children’s services in the Borough.

Background

6. In February 2017, the Council’s external auditors made recommendations under the Local Audit & Accountability Act 2014 requiring the Council to take urgent action to address a range of issues. At that point, the Council was forecasting an overspend of £7.6m for 2016/17 and needed to identify an additional £7.9m of savings for 2017/18. Total General Fund revenue reserves amounted to £14.4m.

7. A new Chief Executive was appointed in 2017, followed shortly thereafter by a new Senior Leadership Team to drive forward the transformational change needed to improve the Council’s corporate governance arrangements and deliver the savings necessary to ensure the financial viability of the Council. Subsequently, the Council delivered over £66m of savings across a range of areas:

• Workforce plans – Including reviewing operational requirements; service restructuring; reviewing the use of agency staff and fixed-term contracts; reductions in overtime and additional payments; a more stringent approach to recruitment into vacant posts; and managing attendance and performance.
• Adult social care savings – Including reviews of care packages; income maximisation; use of assistive technology; and the increased use of direct payments. We have also reduced costs by supporting people to identify their strengths and solutions, working on a ‘home first’ basis, and empowering people through reablement and Technology Enabled Care solutions – all of which have reduced people’s level of need and dependency on the service. Close working in partnership with the voluntary sector has also contributed to cost avoidance.
• Establishing a delivery fund for ‘spend to save’ projects – Utilising the Flexible Use of Capital Receipts Directive to invest in capacity and resources to set up and deliver the Council’s programme of change and transformation, as well as to deliver specific savings identified.
• Estate rationalisation – Reviewing the Council’s estate has resulted in the re-location of services to allow for surplus assets to be disposed of or used for alternative purposes, resulting in efficiency savings.
• Investment in IT – Enabling a shift from manual systems to self-service, including for some of our most frequently used customer-facing services, such as reporting a missed bin.
• Delivering leisure services at reduced cost – In 2021 we entered a 25-year contract with GLL to design, build, operate and maintain our leisure centres. This is projected to save over £14m over the period of the contract (2019/20 prices).
• Implementation of the Council’s Carbon Plan – Reducing energy use and carbon emissions, avoiding cumulative costs of c.£22.2m (excluding standing charges and other contract charges) since 2008/09, compared to if no action had been taken. In 2022/23 alone these avoided costs were estimated at £4.7m, freeing up resources to maintain front-line services.

8. As a result of the above, Reading now has the 14th highest level of reserves among the 51 Unitary authorities, up from 23rd the previous year, as other authorities increasingly draw down from reserves to balance budgets. This has been achieved whilst still investing in our services, including increased demand in children’s services, new affordable housing and an additional £8m in road maintenance.

9. However, the financial outlook remains challenging. As of March 2024, our reserves total £66.1m. These are projected to decrease over the next three years to £39.1m, due to the need to fund children’s placement pressures, direct financing of capital investment, Collection Fund deficits, and the planned release of revenue grants unapplied. Adult and children’s social care continue to be a major pressure on the Council’s finances. Taken together, these two areas account for 68% of our budget in 2024/25, compared to 57% in 2020/21.

Continuous improvement

10. Our current programme to improve productivity further is focused on two pillars: (1) Customer Service Excellence; and (2) Efficiency & Service Improvement. The programme is governed by a programme and project management framework which is overseen by a Transformation and Efficiency Board chaired by the Chief Executive.

11. At the centre of our Customer Service Excellence pillar is the Customer Experience Transformation Programme. We have just started a new round of customer journey optimisations, where we use a standard and effective method to review journeys across all services, from the first resident contact to completion of their need. To support this work, we are introducing a new Customer and Case Management System, based on the internationally used Salesforce Customer Relationship Management system. We are also using AI through the introduction of voice automation to deal with some of the most common resident queries. Initial results are showing the system handling 30-40% of calls of several customer journeys which would otherwise have had to be dealt with by a Customer Service Advisor.

12. The second pillar, Efficiency and Service Improvement, includes a range of initiatives focused on our biggest areas of spend. One example in Adult Social Care is the application of pattern- of-life analysis (delivered by in-home sensors coupled with machine learning and predictive analytics) to enable elderly and vulnerable clients to remain more independent for longer and to enable a shift from reactive to proactive care. Our proof of concept with 30 users was successful, and we are now rolling the capability out to 600 service users in a project sponsored by the NHS and with independent study of the benefits realised being carried out by the University of Reading.

13. Our Children’s Services, delivered through Brighter Futures for Children, a company wholly owned by the Council, is also improving efficiency. They are delivering a programme to reduce escalation of children’s needs, ensure that children are supported to remain living with their families wherever possible, increase SEND provision, and address the lack of local placements, including through capital investment in provision of in house residential placements. This is critical to delivering better outcomes and controlling costs.

Technology and data

14. Underpinning the Council’s improvement programme is investment in fit for purpose IT that enables staff to work efficiently and allows collection of high-quality data that we can use to inform service improvement. The Council’s work in this area has been both recognised and supported by DLUHC through the Council’s selection to be part of the Future Councils Programme. Participation in that programme was particularly valuable in enabling the Council to enhance its cyber-security posture in the face of growing threats in that domain.

15. Examples of Digital & ICT projects include:

• In 2019 the Council implemented an improved HR and payroll system (iTrent). The project centred around digitalisation of previously paper based processes across the whole employee lifecycle, from recruitment to retirement. This resulted in time and staffing efficiencies, along with improved people data which is used daily to inform effective management practice. The change included the introduction of Employee and Manager self-service portals, allowing for efficient and accurate processing of HR transactions and access to real time information.
• The Housing Service in RBC has recently implemented Phase One of the NEC system to provide a main database for all housing service activities. The new system has stronger functionality to automate key processes such as rent arrears collection, the assignment of reactive repairs, and planned maintenance programmes. Key asset data was previously situated in a separate database but has now been integrated into the main database alongside other crucial datasets for tenancy management, rent accounts and housing management services. Phase 2 of the system will be implemented later this year and will include a module for tenant self-service and anti-social behaviour, again increasing the overall level of integration. Once fully implemented the solution will provide for a clearer overview of our residential assets by capturing in one place essential information about both a property and its occupants. This will provide managers with the ability to monitor performance more robustly and to drive forward improvements in services, based on accurate real-time data covering a broad span of housing activities.
• The Council’s new finance system (Advanced e5) was implemented in December 2023. As part of delivering this new system, the Council’s final accounts processes have been streamlined and real time self-service reporting has been made available to budget managers. These changes will improve efficiency, drive savings, as well as improve financial control and enable more informed decision making across the Council.
• A programme addressing improvements to the Council’s website, including video content, automation of key processes and improved accessibility and navigability.
• The Customer Experience programme, underpinned by customer journey improvements and a new Casework and Customer Management System (Arcus Global and Salesforce), the first phase of which is going live imminently. This offers improved functionality for self-services, system integration and mobile working. The programme, which also involves website content improvements and the introduction of voice automation for the Customer Fulfilment Centre, will deliver in excess £700k of annual savings.

16. The IT projects mentioned above, along with several others, will ensure we have updated most of our core operating systems so that we have a firm foundation for better productivity.

17. As set out above, the Council is utilising AI to support with customer enquiries. Two examples of further projects which we are at the early stages of scoping are:

• The use of generative AI, within strong ethical controls, to support social care delivery processes. For example, the capture of visit records, freeing up staff time spent on writing up reports.
• The application of data analytics and generative AI to support human decision-making and case review in adult social care. For example, exploring longitudinal analysis of case note data to help identify things that might be missed by a human, or make it quicker to find information that would otherwise take a long time.

Governance and scrutiny

18. The Council deploys a comprehensive governance and internal control framework to manage its diverse projects and programmes effectively. This includes a structured methodology for project and programme management, regular reporting mechanisms, and a well-defined board structure.

19. Performance is monitored using a robust dashboard system that tracks key performance indicators, benefits realisation, project delivery, and resource allocation. This ensures that the right people are assigned to the right projects to maximise benefits and efficiencies. Regular updates through delivery reports help in tracking progress against agreed savings targets, identifying issues and risks, and taking corrective actions as necessary. Additionally, the use of stage gates during project delivery ensures projects progress effectively from initiation to closure, maintaining focus on benefits realisation and lessons learned.

20. The Medium-Term Financial Plan, which covers a period of three years and is updated annually, and oversight by the Corporate Management Team, ensure alignment with strategic goals and financial sustainability. Performance is monitored through regular updates, delivery reports, and the identification of risks and issues. Success is measured by achieving targeted efficiencies, savings, and improved service delivery, with assurance levels determining the scrutiny required for each initiative. This approach ensures transparency, accountability, and continuous improvement across all Council projects and programmes.

Efficiencies through cross-sector working

21. Where there are advantages in doing so, we work across organisational and administrative boundaries to deliver better value for our residents. One long-standing arrangement is Re3 – a waste disposal partnership between three councils (Bracknell, Reading, and Wokingham) to provide residents with efficient and cost-effective recycling and waste disposal facilities. We estimate that when compared against modelled costs and unavoidable increases (legislative change, inflation, and elements of cost pass-through) the shared arrangements save close to £8m a year for the partner councils (2023/24).

22. The Council also hosts a Joint Legal Team which serves all six Berkshire unitary councils with a legal service for children’s and adult social care. This service delivers significant benefits in terms of providing a specialist service, resilience, and a cost-effective solution compared to external services.

23. Another example is the Berkshire Transport Partnership, which has provided coordination on strategic transport issues across the six unitary authorities in Berkshire at both senior officer and Lead Member level. This partnership improves productivity through the preparation of joined-up strategies, funding bids, procurements, responses to national transport matters and sharing of best practice.

24. A further example of collaboration across the six Berkshire authorities is the Digital Infrastructure Group. It focuses on industry engagement to shape and drive new technology rollouts, combining forces so that central and local government investment in digital infrastructure can be applied for maximum effect. Benefits have included savings in the provision of broadband to schools, engagement in national initiatives that will make Reading an attractive and easy area for telecommunications firms to roll out 5G mobile and full fibre broadband technologies, and provision of an “internet of things” network infrastructure, whose first target application – in highways – is the use of road surface temperature sensing to eliminate significant avoidable unnecessary gritting costs to generate up to £100k savings.

25. We have co-created a voluntary sector compact, with joint priorities for how we work with our VCS organisations to deliver coordinated services for the benefit of Reading communities. The Leader and Chief Executive meet regularly with the sector to support this work. In 2023/24 the Council invested £8.3m in delivering services with the voluntary and community sector. This included £1.175m through our Closing the Gap contracts, which involved a dedicated outcomes-based commissioning process.

Equality, Diversity, and Inclusion

26. Reading has a highly diverse population: 32.9% of the population are global majority and 33.5% were born outside of the UK (Census 2021). The Council is working towards increasing the diversity of its workforce: of the 1,815 staff currently directly employed by the Council, 18.3% are global majority. Having a workforce that is better equipped to understand the diverse needs of residents, and more representative of the people we serve, enables our service delivery to be more effective.

27. Whilst we do not currently have EDI champions within the Council, we do have a number of voluntary staff networks which promote inclusion for specific groups (e.g. Staff Disability Forum).

Agency spending

28. The percentage of the Council’s staffing budget spent on agency workers is 10.8%. The Council makes use of agency staff for a variety of reasons including cover for absence, to provide staffing in critical services where it has not been possible to recruit permanent staff (in particular, qualified social workers and legal professionals), to manage short- and medium- term workload peaks, and to recruit staff with specific skills required for a limited period only. Agency spend is tracked monthly.

29. The Council currently has 42 agency workers who have been in place for more than a year, of which 27 are working on specific time-limited projects, with the remaining 15 providing cover for sickness absence in critical front-line services.

Barriers to further progress

 Funding regime

30. The current funding regime for local authorities is a significant barrier to longer term planning and productivity. Improvements that could be made include:

• Providing local authorities with timely multi-year financial settlements: Single-year settlements, typically received in the last working week of December, make it difficult to plan long-term and deliver more ambitious programmes of work to improve efficiency.
• Resolving the position on the Business Rates Reset: The sector has been awaiting the Business Rates Reset for many years now. It has been continuously pushed back without any implementation timescales forthcoming, which again hinders medium- and long-term financial planning, especially for those authorities such as Reading who have benefitted from the economic growth within the Borough but will be amongst those negatively impacted by any reset.
• Reviewing the funding of social care: Adult and Children’s Social Care now account for 68% of the Council’s net budget in 2024/25 compared to 57% in 2020/21. The continued reliance on capped increases on Council Tax, and specifically the Adult Social Care Levy, which again are subject to confirmation annually by Central Government, is not financially sustainable.
• Limiting the use of grant funding via competitive bidding rounds and devolving budgets to local authorities: Competitive bidding processes result in time and effort within the sector being diverted away from delivering front-line services to our residents to fill out grant applications and provide data returns to central government departments. Last year, for instance, our Department for Economic Growth and Neighbourhood Services (DEGNS) secured 13 grants totalling £37.6m. The vast majority of this funding (£35.7m) was for transport and highways schemes – funding which could instead be devolved to local authorities via the local transport plan process, cutting out waste and enabling long-term, strategic planning.

 High-cost demand-led services

31. Like all local authorities with social care and homelessness responsibility, we have seen significant financial pressures in recent years from increasing costs and demand for statutory services. In many cases, the financial costs involved are not a legally valid consideration in the decision-making processes we must follow. While there continues to be no national funding solution for these statutory services this will continue to put significant pressure on all councils, including Reading.

32. One example of where this pressure is particularly acute is in Special Educational Needs and Disability (SEND) provision. As of March 2023, 65% of local authorities had cumulative deficits within the part of their budgets reserved for schools spending, totalling £1.6bn, with the main reason being the cost of SEND provision. A statutory override is currently in place allowing local authorities to keep these deficits off their balance sheets until March 2026. If this is not extended and the underlying issue addressed, many councils will be at risk of issuing a section 114 notice.

33. Some of the actions we are proactively taking to address the challenges in this area include:

• Opening 145 Additionally Resourced Provision places in mainstream primary schools to enable children to remain in their local school and prevent escalation to specialist provision.
• Establishing the DBV-funded Reading Inclusive Services in Education (RISE) Service to meet children’s needs earlier, increase skills and confidence across mainstream schools and prevent escalation of needs that would otherwise require an Education Health and Care Plan and specialist provision.
• SEND school place planning: exploring options to meet the need for additional primary and secondary special school places locally. Options include conversion/expansion of an existing school and/or creating a new school.

34. Another area of challenge are placements for children looked after by the Council. Increasing demand, an increase in age profile, a national reduction of foster carers, and market failures (as identified by the Competition and Markets Authority) have all contributed to an increase in the unit cost of placements, particularly residential care. Work underway to address this locally includes:

• The development of an Edge of Care offer to support children to remain living at home; to ensure that when children do come into care it is for the shortest possible time; to prevent placement breakdowns; and to return children home when it is safe to do so.
• Reading is part of the DfE funded South-East Regional Fostering Recruitment Hub to improve the recruitment and retention of local foster carers.
• An options appraisal is underway to develop in house children’s homes, comprising both assessment and medium- to long-term children’s homes.

Conclusion

35. Reading Borough Council has a strong track record over the past seven years in delivering change to improve productivity and services to residents. We are proud of the work we do for the people of Reading, and we will continue to strive to deliver better quality services through our ongoing commitment to delivering value for money in everything we do.