Birmingham City Council is over-reliant on expensive consultants and has no idea how many jobs might be lost or created as a result of a “high-risk” business transformation project, according to a damning report.A progress report by the Audit Commission accuses council leadership of a “lack of realism” about the difficulty of achieving more than £650 million in savings over 10 years – largely through better IT and a tie-up with private outsourcing company Capita.While the commission recognises the council made significant early progress on business transformation, the report warns the local authority will be heavily stretched to deliver change once all nine transformation streams are running.It says the council has no firm timetable for reducing the number of consultants on the project – the bill for Service Birmingham, the Capita-led company at the heart of business transformation, has already exceeded £20 million.And the document notes: “Council officers are heavily exceeded by consultants and the scale of business transformation work is increasing. The council risks Service Birmingham costs being higher than they need be unless the proportion of officers with consultancy skills is increased.”The report, written before the departure was announced of Brendan Arnold, the official spearheading the programme, notes: “There is reliance on a very few key officers at corporate level.”It adds: “The council does not have a sufficiently strong strategic management of business transformation. The council puts considerable emphasis on managing business transformation but does not have an overarching plan.”Deputy council leader Paul Tilsley said he was at a loss to explain the criticism, adding an earlier Audit Commission report complimented the council for having the foresight to embark upon business transformation.Coun Tilsley (Lib Dem Sheldon) added: “We take reports like this very seriously and will give the commission’s concerns consideration. It is good organisations like this keep us on our toes.”The Audit Commission questions the success of the Employee Bargain – the name given by the council to a change under which employees will no longer be based in an individual department or unit and could be re-trained and ordered to work anywhere in the council.The report warns: “The council does not have a workforce plan for business transformation. It does not know what posts are likely to be created or withdrawn or what the skills implications will be. Without this knowledge it will be hard to deliver the employee bargain.”On the issue of the number of jobs likely to be lost over the decade, the report states: “Staff turnover numbers have been analysed and suggest natural turnover will help ease problems, however there is no corporate mapping of posts likely to be displaced or created and their respective skills mix.“The council has agreed an employee bargain offering all staff whose posts change or disappear as a result of business transformation the opportunity to receive in house career counselling and be re-trained and re-deployed.“This has been well communicated to staff but they do not yet have faith in it. The council risks not having plans ready to meet the employee bargain, and, not having planned opportunities to retain staff up-skilled through business transformation secondments.”There is also criticism of a lack of communication about the benefits of the changes.“Senior and middle managers support the business transformation plans. However many council staff know very little about business transformation, or what effect it may have. Similarly not all councillors understand how it will benefit constituents,” the report adds. Attention is drawn to a “lack of clarity and communication” about how business transformation programmes will be funded and how financial shortfalls will be met.The report goes on to accuse the council of lacking sufficiently strong strategic management of business transformation with no overall delivery plan.The study adds: “One directorate delayed engagement with business transformation until recently and some business transformation programmes have slipped key deadlines. Every delay impacts on business transformation’s financial profile and can affect the timescale for the realisation of its benefits.”
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