Transformation costs and benefits
The approach to delivering transformation is set out in more detail in a later section of this report.
Our financial modelling is based on the detailed analysis and findings from the Surrey PWC report in 2020, with refinements made from a review of other transformation business cases for unitary councils and internal assessments.
Benefits
Savings have been modelled at 100% / 75% / 50% of the original PWC business case. A mid-point of 75% has been used for the two-unitary model and 67% for the three-unitary model which delivers a % reduction in staff and non-staff costs as set out in the table below. Overall, this delivers a saving of £40m in the three-unitary model and £46m in the two-unitary model by the end of year three of the new Council. This is in addition to the savings identified from aggregation / reducing duplication.
|
Area |
Original |
2 unitaries (75%) |
3 unitaries (67%) |
Examples |
|---|---|---|---|---|
|
Customer contact and assessment |
10% |
7.5% |
6.7% |
Customer services, web and digital |
|
Enabling support |
18% |
13.5% |
12.1% |
IT, HR, Finance, Legal, Procurement |
|
Service delivery |
6% |
4.5% |
4.0% |
Housing, Environmental Services, Libraries, Leisure |
A prudent approach has been taken to transformation benefits delivery phasing. This recognises that the focus of the new Councils in the initial period will be on establishing themselves and delivering the initial benefits of aggregation and reducing duplication, which are accounted for separately in the model.
Savings have therefore been phased over 3 years as per the table below. It should be possible to accelerate the delivery of benefits where necessary.
|
2025-26 |
2026-27 |
2027-28 |
2028-29 |
2029-30 |
2030-31 |
2031-32 |
|
|---|---|---|---|---|---|---|---|
|
Districts and boroughs transformation benefits phasing |
10% |
40% |
40% |
10% |
|||
|
Districts and boroughs transformation costs phasing |
30% |
50% |
20% |
Delivery costs
The costs of delivery are summarised below. Where possible we have used the same assumptions as SCC, for example in relation to the costs of IT consolidation and change and programme delivery. The main difference with the SCC model is a higher allowance for redundancy and early retirement costs, based on a combination of a higher level of delivered staff savings and a higher per capita allowance for the costs of exit.
| Costs incl. transformation | Implementation Costs £m | |||||
|---|---|---|---|---|---|---|
| 2 unitaries | 3 unitaries | |||||
| Cost category | Implem- entation |
Trans- form- ation |
Combined | Implem- entation |
Trans- form- ation |
Combined |
| Redundancy and early retirement | 10.6 | 14.0 | 24.6 | 8.0 | 11.0 | 19.0 |
| Implement- ation and programme delivery |
9.5 | 14.0 | 23.5 | 12.9 | 14.5 | 27.4 |
| IT consolidation and change | 23.2 | 7.4 | 30.6 | 24.8 | 14.5 | 39.3 |
| Branding and comms |
1.3 | 1.3 | 1.9 | 1.9 | ||
| Shadow authority(ies) | 3.0 | 3.0 | 3.2 | 3.2 | ||
| Creation of new council(s) |
2.8 | 2.8 | 3.4 | 3.4 | ||
| Closedown of old councils | 1.9 | 1.9 | 1.9 | 1.9 | ||
| Elections to shadow authorities | 3.3 | 3.3 | 3.4 | 3.4 | ||
| Contingency | 3.0 | 3.0 | 3 | 3.0 | ||
| Total Implem- entation costs |
55.6 | 38.4 | 94.0 | 59.5 | 43.0 | 102.5 |
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