Government and Public Sector
Review of the cost of
administering the education
system in Wales – Phase 1
April 2010
Executive summary
3
Section 1.
Defining service and support
9
Section 2.
Costing Service and Support
17
Section 3.
Changing the balance of cost
32
Section 4.
Achieving the change
50
Appendices
Appendix One – Local Authority Retained and Delegated Education Funding – Detailed Cost Allocation 56
Appendix Two – Higher Education – Detailed Cost Allocation 63
Appendix Three – Further Education – Detailed Cost Allocation 67
Appendix Four – DCELLS – Detailed Cost Allocation 72
Appendix Five – Careers Companies – Detailed Cost Allocation 75
Appendix Six – Estyn – Detailed Cost Allocation 77
Appendix Seven – HEFCW – Detailed Cost Allocation 79
Appendix Eight – Standard Process Model Activity Descriptions 81
This document has been prepared for the Welsh Assembly Government in accordance with the terms of our engagement. PricewaterhouseCoopers LLP does not accept or assume any liability, responsibility or duty of care for any use of or reliance on this document by anyone other than the Welsh Assembly Government, except as expressly agreed by PricewaterhouseCoopers LLP in writing.
© 2010 PricewaterhouseCoopers LLP. All rights reserved. 'PricewaterhouseCoopers' refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
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Using this document
This is the final report from Phase 1 of the Review into the Costs of Administering Education in Wales. The review was commissioned in February 2010 by Leighton Andrews as Minister for Children, Education and Lifelong Learning. This seven week initial review was to identify the costs of education administration and propose initial opportunities to shift that cost. The report is presented in the following sections.
Section 1
Section 2
Section 3
Section 4
Appendices
Defining Service
& Support
This section describes our approach. It describes the standard model we have used to define administration in terms of support to service and to interrogate the cost of this activity across the sector.Costing Service &
Support
This section sets out our cost analysis for Welsh education and constituent
organisations. This analysis is high level but appropriate to the conclusions drawn in the report. It has been prepared with stakeholders and will be further assessed in subsequent stages.
Changing the
Balance of Cost
This section sets out a first view of hypotheses for how the sector could increase the proportion of cost spent on the learner. These hypotheses have been discussed with stakeholders and will be further tested in subsequent stages.
Achieving
the Change
This section sets out how the sector might approach
implementation of the change and
discusses the conditions that should be in place for the change to be implemented successfully.
We have provided a detailed explanation of the cost allocation prepared during the review.
Defining service and support
Our first challenge was to produce a useful definition of administration against which we could prepare a cost. To avoid unhelpful value judgements from using the word “administration” we have defined administration as the set of support activities that do not deliver services to learners directly. This split does not imply a strict value judgement although, in preference, cost should be deployed effectively to service ensuring the appropriate balance with support functions. We have prepared a standard activity model to separate service and support activity. We have defined service activity as direct learning and teaching, professional support to educators, the delivery on non-education services to learners and research and knowledge transfer in Higher Education. We have defined support activity as strategic and support functions (including the traditional back office, premises, strategy and policy and general administration), the management and administration of service staff and handling and assessing requests for information and service.
Costing administration
We have allocated cost across the activity model based on what people do rather than by the organisations where people sit. The activity model analysis provides a very different view of cost from traditional budgets and exposes support cost at all levels of organisation. The model is standard and has produced a common view of cost across Local Authority education services, schools, Higher Education (HE), Further Education (FE), the Department for Children, Education, Lifelong Learning and Skills (DCELLS) and Non-Departmental Public Bodies.
The following pie chart summarises the allocation of the gross expenditure of the bodies included within the review
review, rather than the source of income. This is particularly important in understanding the HE allocation as HE institutions receive a large proportion of their funding from research grants and other sources in addition to central government funding. On this analysis, 44% of cost is direct learning and teaching. By adding other service delivery including non-education services, professional support to educators and research the total service cost represents 68%. The remaining 32% is support cost representing the back office, access and assessment and service management and administration.
Diagram 1 – Total Allocation Activity Summary
We suggest that this 68% / 32% split is the axis across which the Minister should focus on shifting cost.
This analysis has been completed for each institution type through a combination of subjective budgetary analysis, supporting management information, activity analysis through survey or using proxy examples, and stakeholder
understanding. It can be extensively improved by asking sample constituent organisations to complete the standard model themselves in Phase 2. However, our experience of using this model to inform transformation programmes is that we wouldn’t expect material shifts in the overall proportions.
The balance of cost changes by institution type. The greatest proportion of support cost in front line organisations is found in HE with the lowest found in delegated Schools expenditure. 18% of local authority (LA) retained expenditure is support which reflects partially their reliance on their home authority for support.
Changing the Balance of Cost
We have outlined ten hypotheses within two themes which could potentially deliver a significant shift of cost to learning and teaching. At this stage we propose these opportunities only as a reasonable basis on which to proceed to further testing. We were fortunately able to engage with over 100 senior officers and politicians across the sector during our work. We therefore have confidence that the following hypotheses may be an acceptable basis on which to proceed.
The themes and projects are outlined as follows: Simplify Governance
Throughout our consultation with stakeholders at all levels there is a strong perception that the functions of system governance are unnecessarily driving cost. The total cost of strategic support including strategy and policy development,
Access 4% Learning & Teaching 44% Other Service Delivery 24% Service Manage-ment 9% Strategic & Support Services 19% Service Cost 68% Support Cost 32%
business information and reporting and quality assurance at all levels is £117m including the supporting costs of DCELLS, Estyn and the Higher Education Funding Council for Wales (HEFCW). This simplification of governance and focus in policy development is particularly appropriate as the sector enters a period of financial constraint and is less able to resource the delivery of a large number of policy initiatives.
Simplify grant structures– reduce the number of specific grants requiring individual management and administration in favour of a smaller number of formula based grants focused on key outcome measures.
Prioritise the policy portfolio– set a cap for the amount of policy development within the system and prioritise the portfolio based on value and achievability to focus a reduced resource on key policy objectives.
Rationalise inspection and performance management– focus and reduce inspection resources using a more tailored rationale for when and how a given organisation is inspected. Assess and decommission redundant data flows and increasingly apply few and more transparent outcome measures.
Standardise and Share Provision
Education in Wales is delivered with the involvement of at least 60 institutions outside schools. Each of these institutions delivers its own strategic and support services and has distinct arrangements for managing access and education support services, many of which require common systems and processes. These functions are not configured to deliver best value. There is an appetite for reducing the number of institutions although political difficulties mean that this is not a fast route for shifting cost. The following hypotheses present a more practical opportunity:
Standardise and share educational support within regional consortia– the 22 local authorities deliver education configured to provide support to schools through a small number of consortia-based teams operating standard and where appropriate shared provision. This will reduce overhead cost and should improve service and larger teams will allow for greater utilisation and specialism but are tentative. We would propose a rapid pace to design and implement an overall national consortia model.
Integrate local authority education service, local authority and further education non-education support functions by geography– many education specific organisations may not be large enough to efficiently justify standalone teams delivering back office support to their own design. The sector will reconfigure to deliver critical mass. This may best be achieved through common delivery from the co-terminus local authority. Most local authorities have achieved this to some extent. This hypothesis would require the integration to be progressed more fully.
Schools collaborate to deliver better support– schools form clusters to share resources, approaches and facilities, both reducing support cost and getting better value from service resources. This is interlinked with the current approaches for school federation and the Schools Effectiveness Framework.
Allnon departmental public bodies use a single back office– Estyn, HEFCW and the Careers Services operate discreet strategic and support functions. In scale these are a fraction of the organisation supported by the Welsh Assembly Government (‘WAG’) and a move to provide support centrally would reduce overheads substantially.
Standardise access, assessment and admissions processes– the processes by which learners, citizens and third parties apply for places, for grants or other services and supporting information costs £152m across the system. Schools and college admissions are on the whole completed using manual processes designed by the receiving organisation. We believe similar non-standard approaches are used for processing applications for Special Education Needs (SEN) support. This hypothesis looks to deliver access and assessment using standard processes and systems between institutions leading to reduced cost, increased citizen self-service and a richer, more accurate response to enquiries.
Simplify, standardise or share the support to Higher Education– by reconfiguring the delivery of support services between faculties within institutions, and between institutions, performance can be improved and costs reduced. This has not been a theme of current collaboration and merger work sponsored by the sector and the potential has not been realised to date.
Converging on leading practice in common support functions– increase the pace of improvement by developing a common measure of leading practice for each support function and setting a presumption that each organisation will self-assess, establish the performance gap and address it.
Assessing the impact of the hypotheses cost
At this stage it is not possible to delegate targets or budget for the level of savings that would be generated by these hypotheses. This phase has not assessed the current or potential levels of performance at each institution. However, it is clear from industry analogy, discussions with stakeholders and from our experience of transformation that significant potential exists to release support costs through rigorously implementing the changes set out in this document. We also believe the sector should set a bold and specific ambition to drive further testing and development of these savings opportunities.
The following table sets out some potential ranges to give a sense of the magnitude of cost impact for each hypothesis. A key element of Phase 2 work is to test the assumptions underlying these numbers as part of the overall case for change. These are gross numbers and do not reflect implementation costs nor timings. They also do not net off current savings planned by these institutions.
Cost Base Affected
£000 Range of Impact
Simplify Governance
(Prioritise strategy and policy portfolio, simplify grant structures and the performance and inspection regime)
116,760 10 – 20%
Provide Education Support through Regional Consortia 562,000 5 – 10% Integrate local authority education service, LA , and FE non-education support
functions on a geographical basis
283,608 10 – 15% Assembly Sponsored Bodies and Careers Companies use a single back office 13,151 20 – 25% Standardise access, assessment and admissions processes across sectors 151,640 5 - 10% Schools improve support through collaboration 156,405 5 – 10% Simplify, standardise or share the support to Higher Education 359,553 5 – 10%
Achieving the Change
The hypotheses outlined above are not wholly original and in some respects are already being addressed within the sector. In other respects, although the ideas are accepted in principle they have yet to be implemented in practice and be seen to deliver the level of service and cost improvement now demanded. For example, extensive analysis of the complexity of grant funding has not yet resulted in an accepted simple model for funding.
Irrespective of the impetus to shift more funding to front line education, the sector will struggle to accommodate the likely overall reduction in funding from FY 2011. Thus, there is a great imperative to move rapidly to design and implement the above hypotheses. There is a strong feeling among stakeholders that the world has changed. Therefore, the challenge from this review may not be to debate the mechanisms for cost and service improvement, but rather how to shape an acceptable, safe and immediately actionable programme that, although complex, delivers coherently and at pace. We have spent some time with stakeholders talking through how an acceptable and actionable programme might be designed. We would relay the following key principles:
A national deal– to be politically acceptable across the system, each constituent organisation must play a part with an equal focus on reducing the costs of governance and reconfiguring provision.
A national presumption to give direction and pace– the local appetite for change is building, but to cut through resistance and to deliver efficiently the sector should work towards a presumed model and use commonly developed tools and methods to deliver it.
Adopt or amend– allow for local configuration and progressive adjustment of the model to best accommodate local circumstances and workable coalitions of stakeholders while setting an expectation of challenge and pace.
A new trust across the system– in many respects the complexity of governance and the fragmentation of delivery has arisen because of the lack of trust both vertically and horizontally. “If I don’t trust providers to deliver I will increasingly use funding levers and regulation to force a solution.” “If I don’t trust others to deliver for me then I will create my own directly managed service irrespective of how inefficient that may be.” Many hypotheses above demand new ability to deliver through others, replacing line management, enforcement and control mechanisms with dialogue, transparency and an acceptance of a mutual responsibility to deliver.
This report will hopefully be useful in providing an evidence base and some opportunities to shift resources. The
opportunities stated here have been developed with several stakeholders and have been received positively. In assessing readiness for sector change we would expect the following:
Stakeholders accept that it is not possible to continue on the current basis and secure front line education. The pain of inaction is real and worse than the pain of action.
Stakeholders understand and recognise the hypotheses for shifting cost and protecting service and believe them to be relevant and positive to their own organisation and cost base.
Stakeholders believe that a shift in cost is possible and have helped shape an overall approach to deliver it nationally and locally.
We would suggest that Phase 2 of this review is primarily about building a case for change to deliver the above. We would suggest the following:
A broad engagement with leaders across the sector to confirm that the hypotheses in this document are a reasonable working premise for testing.
The engagement of at least a sample of the institutions in analysing their cost base at a detailed level using the tools and approaches used here. This has the advantage of building a common national taxonomy for both education and support functions and a consistent way of interrogating cost. It will also help to build ownership of the change programme.
The development of these hypotheses further using two approaches:
A national design team working through the initial view of what a presumed model and approach to deliver might look like, how such a programme would be shaped and governed and how benefits and funding would be managed.
A local challenge to identify opportunities to shift cost within institutions through applying both these hypotheses and using leading practice tests to confirm local improvements.
Phase 2 also offers the opportunity to undertake sector benchmarking where this would prove effective and informative to the forward change programme.
Section 1.
This section describes the objectives, scope and approach and outlines the definitions we
have used for administration.
Objectives
This is the final report from Phase 1 of the Review of the Cost of Administering the Education System in Wales. The overall review was commissioned by the Minister for Children, Education and Lifelong Learning with the overarching objective to ensure that a greater proportion of the costs of education reach the front line. Phase 1 was initiated as a seven week desktop review with the following objectives:
To produce a first analysis of the costs of administration using available financial data.
To make an initial assessment of opportunities to streamline bureaucracy and proportionately move resources to the front line.
“…we must review the real cost of administering education across Wales. It is imperative that we reduce the bureaucracy and streamline the education system to make it lean and effective to benefit our learners.
“I believe we can do things more smartly and simply in Wales. We need to make sure we make the best use of the resources available to us. Major performance improvement and better efficiency from our education providers is the key to us getting more funding to the front line.”
Leighton Andrews, Minister for Children, Education and Lifelong Learning.
Scope
The review has included the costs of administration of the following organisational types:
Higher Education institutions;
Further Education institutions;
Local Authorities Education Functions;
Schools;
DCELLS within WAG;
Estyn;
Careers Companies; and
HEFCW.
The Assembly also provides funding to a large number of individuals and organisations which are not within the scope of our review.
Our focus has been on the institutions in which the Assembly is able to identify opportunities for moving resources to the front line quickly. For example, whilst the payments made to the Student Loans Company for maintenance loans and grants represents 18% of the 2008-09 DCELLS programme spend, the opportunity for identifying opportunities in this funding stream are limited. DCELLS pays a levy to the Student Loans Company to cover administrative costs and it would not be possible as part of this review separately to identify whether this contribution is being used effectively within the Student Loans Company and therefore whether there is scope for the contribution to be reduced.
A number of organisations, whilst they receive payments of over £1m annually from the Assembly, largely conduct their business outside of the education sector in Wales. Examples include the larger work based learning providers, the Department for Work and Pensions, the Wales Audit Office, the Higher Education Funding Council for England and the Rural Payments Agency. We have not included these organisations within the scope of our review as identifying the amount of administration within these organisations in respect of education would not be possible during the time period. There are also a number of ongoing reviews within DCELLS of how funding can be used more effectively in a number of these areas which are ongoing at the time of this report.
Furthermore, payments to work based learning providers, smaller payments to other public sector organisations, the private sector and the voluntary sector total 12% of the total programme spend in 2008-09. The level of administration in these bodies will vary a great deal and our access to these organisations as part of this review was generally limited. We have therefore not undertaken detailed work in respect of those organisations. Nevertheless, the administration of these schemes within DCELLS is within the scope of the review.
This report is concerned with identifying the cost of administering education and suggesting how a shift of cost to the front line could be achieved. How front line education is delivered is clearly out of scope of the review. For example, the review does not address policy for Welsh medium provision, the provision of integrated childrens services and the Schools Effectiveness Framework. We believe that the hypotheses set out later in this document do not compromise the direction of education delivery in Wales and by protecting front line funding should reinforce this direction.
We have attempted to benchmark where possible in Phase 1, for example in comparing institution size with the rest of the UK and comparing local authority education service administrative cost with other jurisdictions. Benchmarking at a more detailed level at this stage is limited by the amount of available data using similar definitions of service and support cost. We are also of the opinion that benchmarking between similar educational institutions will not drive Wales to best practice in delivering support. We would recommend that in Phase 2 as more detailed institutional allocations are prepared that industry best practice assessments are made at a detailed function level, for example ratios of support staff in HR, ICT and Finance functions are readily available.
Our approach
PricewaterhouseCoopers LLP (PwC) was appointed by the Department for Children, Education, Lifelong Learning and Skills in February 2010. We were given seven weeks to complete Phase 1. Within these constraints the principles of the approach to deliver Phase 1 of the review were as follows:
agree a standard activity model with common definitions of support and service functions.
obtain the cost base of each institution and use available budget and management analysis to allocate staffing and non staff cost across each function.
test the allocation with sector stakeholders and discuss opportunities to streamline administrative functions, reduce bureaucracy and increase the proportion of cost available for service delivery.
debate and prioritise the opportunities with senior stakeholders and discuss how the opportunities might best be progressed.
Although conceived as a desk top review we have taken the opportunity to engage with a large number of sector stakeholders. We believe this is essential in starting to build a coalition to meet the objectives set by the Minister and to produce a report that is challenging, acceptable and safe in equal measure. The following gives an outline of those engaged during the seven week Phase 1 work.
Minister for Children, Education and Lifelong Learning
DCELLS Director-General, Directors and Senior Managers
Local Authority Chief Executives and SOLACE
Welsh Local Government Association
Local Authority Cabinet Members for Education
Local Authority Directors of Education
Local Authority Education Finance Officers and Treasurers
Representatives from 5 FE institutions and ColegauCymru
Representatives from 4 HE institutions and HE Wales
Representatives from Careers Service, WAO, Estyn and HEFCW We thank DCELLS and the sector for giving the time to engage in this work.
The cost of education in Wales
The adjusted gross expenditure of the institutions in scope of this study in 2008-09 was £4.162bn. This is split between the above organisations as follows:
£million
Diagram 2 – Cost Breakdown by Organisation
The cost base used in the analysis is the gross cost reported by institutions, adjusted for non-cash items such as depreciation and capital charges. The source data is as follows:
DCELLS, 34, 0.7% Non-delegated LA, 807, 19% Delegated to schools, 1843, 44% FE institutions, 392, 10% HE institutions, 1,028, 25%
Institution Source
Adjusted gross expenditure £m
LA/schools 2008/09 RO returns 2,650
HE institutions 2008/09 HESA consolidated finance record 1,028 FE institutions 2008/08 benchmark data provided to the Tribal benchmarking club 392
Estyn 2008/09 audited accounts 13
Careers Companies 2008/09 audited accounts 42
HEFCW 2008/09 audited accounts 3
DCELLS
Total
Delegated Running Costs (DRC) report obtained from DCELLS adjusted to take into account staff funded through, for example, EU funding
34
4,162
These organisations are funded through a complex network of block and grant funding streams supported by local income and tax receipts.
Block funding is allocated to local authorities in the form of Revenue Support Grant (RSG), of which education accounts for £2.07bn or 43% in 2008-09. Block funding is also provided to HEFCW which, in turn allocates funding to Higher Education institutions. Block payments in accordance with the National Planning and Funding System are also made to Further Education institutions, six forms and other organisations.
Defining service and support activities
Our first challenge was to produce a useful definition of administration against which we could identify a cost. To avoid unhelpful value judgements from using the word “administration” we have defined administration as the set of support activities that do not directly deliver services to learners. This split does not imply a strict value judgement although, in preference, cost should be deployed effectively to service, ensuring the appropriate balance with support functions. We have prepared a standard activity model to separate service and support activity. We have defined service activity as direct learning and teaching, professional support to educators, the delivery on non-education services to learners and research and knowledge transfer in Higher Education. We have defined support activity as strategic and support functions (including the traditional back office, premises, strategy and policy and general administration), the management and administration of service staff and handling and assessing requests for information and services.
Diagram 3 – Standard Activity Model.
The detailed definition for each activity in the model is provided in Appendix Eight.
Split of Service Activities
We have identified the following as service activities that most directly represent the cost spent on learners. This includes the costs of directly delivering education and non-education services to learners and professional support to educators. This is true, direct, front line service delivery and breaks into four categories:
Learning & Teaching – delivering education to learners.
Service Administration General Administration
Recording & Data Entry
Billing & Receiving Payments Management & Supervision Management & Supervision Approval of Service Delivery Eligibility Scheduling Service Delivery Learning and Teaching Research & Knowledge Transfer Non Education Service Delivery Learning & Teaching Support
Assess & Decide
Assessment Approval of Service Delivery Eligibility Initial Customer Contact Enquiry Handling Processing Requests & Applications Managing apointments
FRONT LINE OPERATIONS
STRATEGIC AND SUPPORT SERVICES
General Administration
Workforce Planning Workforce Scheduling Property & Facilities
General Administration Property & Facilities Management & Supervision
Stores & Distribution Asset Management Payroll Services
Project and Risk Management Management & Supervision Stores & Distribution Asset
Management Payroll Services
Project and Risk Management Business Information & Reporting Marketing, PR & Communications Financial
management Health and safety
Legal Advisory Services
Marketing, PR & Communications
Financial
management Health and safety
Legal Advisory Services ICT HR Strategic Support QA, PM & Improvement Strategy & Policy Procurement & Contracting Procurement & Contracting ICT HR Stakeholder management Stakeholder management Workforce Scheduling
Learning & Teaching Support – delivering professional education advice and support to education professionals – for example, curriculum specialists and school improvement teams. Delivering direct support to enable the provision of education, for example, laboratory technicians and a proportion of library services.
Research and Knowledge Transfer – the delivery of academic research and the transfer of knowledge to external organisations through consultancy and spin out companies.
Non-Teaching Services – the provision of services to learners such as catering, transport, nursing and financial advice.
Split of Support Activities
We have identified the following as support activities that are, to a greater or lesser degree, distant from the delivery of direct services to learners. This assessment does not make a value judgement that these activities are not necessary, but in principle organisations should focus on shifting the balance of cost to service activities.
Access – initial customer contact and assess and decide activities are concerned with receiving and deciding the appropriate response to citizen and third party requests for service, information or resolution of issues.
Service Management – this represents the resource cost of managing, scheduling and administering direct service delivery.
Strategic and Support Services – these are the activities that virtually all organisations complete and include the traditional back office functions together with governance functions. This effectively represents the organisation managing itself.
What does this tell us and how do we use it
PwC has developed and tested this activity based approach in local government, public and private organisations. It is a key tool in prompting transformation and gives a startling new insight into cost as follows:
The analysis provides a common understanding of cost based on objective definitions. The aggregate resource involved in delivering a function across many separate organisations is opaque and disguised by bespoke budget and organisational structures. This analysis endeavours to make the true investment transparent.
The analysis breaks through traditional budget structures and allows identification of cost based on what people do, not where they sit. For example, in a local authority although 80% of the resource can be spent in service
departments often only 50% is spend directly on delivering service to citizens. Common support functions are often fragmented and Corporate Services departments often represent only a proportion of the true back office. In the context of this review the analysis can be used to break through the perception that there are strictly back office and front line organisations. Each organisation in the analysis has its own proportion of service delivery and support.
The analysis prompts the value of standardisation and sharing. The analysis exposes the fragmentation of activities that can be managed in common. This doesn’t necessarily imply shared services but does indicate those areas where organisations can deliver value by working to define and deliver in common ways. As such the tool is highly appropriate in looking at fragmented bodies delivering similar services in a small country.
The analysis can be completed to a level of detail appropriate to the conclusions being drawn. In an individual organisation it is completed through assessment of individual roles. In this review it has been completed through a subjective analysis of staffing and budget. This level of analysis will be adequate to establish broad proportions between functions but will not be sensitive enough to generate detailed business cases to support improvement. In our judgement it will be robust enough to support the hypotheses discussed later in this document and to form the direction for Phase 2 of the review.
The analysis does not make absolute value judgements. Although it is sensible to conclude that increasing the proportion of resource in the top half of that diagram would improve education outcomes, the model does not allow the conclusion that activities in the bottom half are waste or unnecessary bureaucracy.
The interventions appropriate to improve each function are different. One might expect learning and teaching to benefit to a greater extent from bespoke design and delivery appropriate to locality. Conversely, a good payroll service is more likely to be the result of standardised and efficient delivery using best practice approaches and systems that will be common across all sectors. The model allows us to assess the cost impacted by each improvement approach.
How the above has been interpreted in this review
Our conclusion is that the boundaries of what is administration and what is not can be set several ways. At the extreme, one could argue that administration is a dimension of everything that is not learning and teaching. At the other extreme one could argue that it is only represented by the General Administration boxes in the above model. We have adopted neither of these but have used the following guidelines:
We have focused on improvement opportunities that reduce the proportionate cost of support including strategic and support services, access and service management and administration.
We have not progressed any opportunities to improve learning and teaching delivery either in service or cost terms.
In allocating cost across the model we have not attempted to assiduously break out in detail the time of school teachers and we have spent more time on back office functions in organisations that deliver less front line service, for example DCELLS.
Thus the following sections break out cost based on the activity definitions set out above and describe opportunities that aim to explicitly shift cost in proportion towards Service Delivery whilst maintaining the quality of other
functions.
In our proposed plan forward we would suggest that activity analysis is used at organisation level on a common basis nationally as a component of the improvement programme.
Section 2.
This section sets out the split of cost between service and support and provides a
commentary for each organisation.
Allocating cost to the service and support activities
The allocation of cost across the activity model has been completed using the following steps. A full description of the allocation approach taken for each organisation is provided in the Appendices.
In summary, the most current accessible cost base was sourced and matched with budget. Statistical information was sourced to give the best subjective understanding of each cost line. For example, the Revenue Outturn (RO) forms, which are submitted by local authorities to WAG on an annual basis to inform decision-making, were used to break out much of the local authority education expenditure. Tribal benchmark data was used for Further Education and Higher Education
Statistics Agency data for higher education. Where we were able, we allocated the full time equivalent (FTE) staff data as a proxy for payroll costs.
In some areas we sourced existing PwC activity data to complete allocations. For example, we used an average of the detailed activity analysis conducted at six English, Welsh and Scottish authorities to apportion the central overheads in the local authority education budget. We also used the professional experience of PwC staff. DCELLS completed a detailed allocation of FTE time using management judgement of their staff. Finally the allocation was returned to sample institutions for a sense check and to modify apportionment.
Appropriate Use
We believe this is a rational approach to produce a directionally appropriate analysis in the time allowed. It will inform opportunities to change that can be taken forward for further testing. It should be used in that sense. The following should be noted:
This analysis is aggregate and does not reflect the performance of individual institutions and cannot be used to determine changes and set targets at that level.
The analysis should be reviewed to the extent it materially affects the hypotheses. It can be analysed at a more accurate level of cost but not in the Phase 1 time allowed.
The analysis is an objective analysis by function based on common definitions. It does not apply a simple value judgement and the analysis should not be positioned as such.
Cost – Total Allocation - Summary
Diagram 4 – Total Allocation - Activity Summary
The above pie chart breaks out the total cost base of DCELLS, local authorities, schools, further education, higher education, HEFCW, Estyn and the Careers Service across the five summary blocks.
Total Allocation - Activity Commentary
It is difficult to draw overall conclusions from the aggregate analysis. The detailed organisation analyses are described from page 20 and the detailed allocation method is described for each organisation in the Appendices.
Learning & Teaching– the overall proportion of the cost base allocated to direct teaching is 44%. The delegated schools budget represents the largest share of this with 77% of expenditure. Further education organisations spend close to 50% with higher education spending 17% on direct learning and teaching. 6% of retained local authority education expenditure is allocated to learning and teaching through special schools and pupil referral units.
Service Delivery in total– including the provision of non education services, the total proportion of expenditure on services to learners and educators is 68%. The highest proportion again is delegated schools funding where 83% is allocated to service, followed by retained local authority education budgets, further education, careers services and higher education.
Strategic and support services– the highest proportion of strategic and support services are found in higher education and further education institutions with 35% and 28% respectively. The lower 18% of retained local authority education expenditure on strategic and support services reflects their presence within a local authority organisation where many support services would be delivered through other departments. In this analysis Wales has 60 organisations delivering these functions independently. The detailed breakdown by function is provided for each organisation is provided in the Appendices and for Wales as a whole on page 20.
Access– the 4% spent on access nationally will include schools and college admissions together with SEN assessment in addition to normal citizen enquiries for information and complaints. This represents £152m and again is conducted separately and distinctly by 60 organisations.
Access 4% Learning & Teaching 44% Other Service Delivery 24% Service Manage-ment 9% Strategic & Support Services 19% Total Cost £000 4,162,906
Learning and Teaching 1,815,139
Total allocation
Access 151,640
Total
Other service delivery 1,011,672
Service Management 380,896
Service Management– represents 9% of the cost base and is approximately at this level in most institution types with the exception of Higher Education. The 13% figure in Higher Education is driven by the number of FTEs allocated to management and supervision, including Deans of Faculty, research professors and group leaders, representing the complexity involved in managing the processes that form front line service delivery in a typical university including learning and teaching, research and knowledge transfer.
The current cost split between Service Delivery and Support functions is 68% to 32% across Education in Wales. This might represent the most useful axis to measure a shift in cost.
Cost – Total Allocation - Detail
The following diagram breaks out the above into its constituent components. The generation of the numbers in this diagram is explained for each constituent organisation in the Appendices. These numbers have been used to put a value to some of the improvement hypotheses in the next section. The detailed definition for each component is provided in Appendix Eight. All figures are in £000.
Diagram 5 – Total Allocation - Detailed Activity Cost
The above analysis gives some insight into the split of the investment in strategic and support services. These are functions that are common to most organisations. We would highlight the following in this split.
Management & Supervision
Marketing, PR and Communications
Stores & Distribution
Management & Supervision
£110,309 Learning & Teaching
Initial Customer Contact Assess and Decide Service Delivery Scheduling Administration
£94,975 £56,665 £193,424 £77,163
1.9% 43.9%
£1,011,672 Other Service Delivery
2.7% 2.3% 1.4% £1,815,139 4.7% Procurement & Contracting ICT HR 24.5% £17,735 £36,965 £24,292 £25,491
Legal Advisory services
£1,139
0.4% 0.9% 0.6% 0.6% 0.03%
0.01%
Strategic Support Financial
Management Health & Safety Asset Management
£74,305 £46,548 £6,201 £1,456 £401
1.8% 1.1% 0.2% 0.04%
£438,493 £8,479 £26,187
£3,848 £24,091
Property, Estates and
Property Management ManagementStakeholder
0.6%
Payroll Services Workforce Scheduling
0.1% 10.6% 0.2% 0.63%
Project & Risk Management £15,715 0.4% 1.3% General Administration & Support £52,213
Front Line Services
We have taken a decision to include the revenue costs of operating and maintaining the estate into strategic and support services. As such this forms the largest single element. This will include utilities, building maintenance, the provision of cleaning and the operation of residential halls in higher education. In principle, the estate is a common resource and approaches to managing the estate should reflect common best practice. The corporate landlord function is highly fragmented. The 60 constituent institutions have nominal responsibility for the estate, but even within institutions, responsibility can be further subdivided between departments and between schools themselves. To some extent the fragmentation of the estate is a function of geography, but even in small areas the estate is fragmented between 3 or 4 landlords each of which will have identical operational and maintenance teams.
We expect some functions to be under-represented due to the level of analysis that has been possible at this point. In particular we would expect the proportion of legal costs to be higher and anticipate that much third party legal spend is disguised under other activities. Similarly the level of ICT and payroll costs will be misrepresented if the providing organisation is not covered in the cost base. For example local authority provision of central support services to their education departments is not included in the cost base. Similarly, DCELLS is supported by functions provided by other parts of WAG which have not been costed as part of this review.
FTE – Total allocation - Detail
The above is an allocation of the adjusted gross expenditure for education in Wales including staffing and non staff costs. The following is an allocation based on staff time. The estimated number of full-time equivalent staff employed in education in the institutions within the scope of the review is 83,044. Local education authority staffing information is not held centrally so an estimate has been prepared (see Appendix One). The breakdown of FTEs across the standard process model by sector is included in the appendices. In summary, the total allocation provides the following analysis:
FTE
83,044 Total
Service Management 8,893
Strategic and Support Services 8,398 Total allocation
Access 3,237
Learning and Teaching 46,840
Other Service Delivery 15,676
Access 4% Learning & Teaching 56% Other Service Delivery 19% Service Manage-ment 11% Strategic & Support Services 10%
Cost Breakdown – Retained and Delegated Local Authority Education
Expenditure
Diagram 6 – Activity Cost Summary – Schools Delegated
Access 2% Learning & Teaching 77% Learning & Teaching Support 1% Non-learning Services 5% Service Manage-ment 7% Strategic & Support Services 8% Total Cost £000 1,843,072 Delegated Schools
Non - learning services 88,675
Service Management 135,294
Access 28,594
Learning and Teaching 1,413,747
Learning & Teaching Support 20,357
Strategic and Support Services 156,405 Total
Diagram 7 – Activity Cost Summary – Local Authority Retained Spend
We have used the actual cost information included in the 2008-09 ‘RO’ form submissions by local authorities to WAG which represents the latest subjective analysis of actual expenditure. The detailed allocation for each cost line is described in Appendix One. The following is a summary and describes some of the supporting data used.
Direct allocation– where the RO subjective analysis allows, we have allocated the total expenditure on that line to the appropriate activity. For example, repair and maintenance and premises expenditure.
Schools teaching staff– we have assumed a small proportion for management and supervision but otherwise allocated to learning and teaching.
Schools support staff– we have used WAG analysis of support roles to separate out direct learning and teaching staff from technical and nursing support and office and clerical staff and allocated accordingly.
Other staff cost– we have used FTE activity analysis from a selection of six Welsh, Scottish and English education authorities to determine the proportion of staff cost undertaking each front line or strategic and support activity. For cost lines where non-staff cost is a dominant element we have separated this out before the allocation ie schools transport. Where non-staff cost is not a dominant element, we have assumed it can be allocated in the same proportion as staff time, for example support services.
The key cost elements within each block are as follows:
Access–The majority of this cost is a subjective RO line for school admissions but it also includes a proportion of the cost of school administrators and an allocation of costs for managing enquiries and assessments for SEN, transport and other services based on the FTE analysis of sample local authorities discussed above.
Service management– we have assumed an element of teacher time for school and department head teachers is committed to this activity and the remaining time of school administrators. The remaining element is an allocation of other service costs based on the FTE analysis of sample local authorities.
Access 7% Learning & Teaching 6% Learning & Teaching Support 34% Non-learning services 26% Service Manage-ment 9% Strategic & Support Services 18% Total Cost £000 806,503 Local authority retained spend
Access 51,689
Learning and Teaching 47,529
Learning & Teaching Support 276,837
Non - learning services 212,570
Service Management 74,212
Strategic and Support Services 143,666 Total
Learning & Teaching– this represents the remaining staff costs of teachers together with the education equipment RO line. We have not broken out non-teaching time other than to separate a small amount for service management above.
Other Service Delivery– this block is the provision on non-education services to learners such as school catering, transport, library and nursing services. The remainder is the provision of support to educators such as school improvement teams and curriculum specialists.
Strategic and support services– the RO analysis splits out lines for central support. We have allocated this across strategic and support functions using the sample activity analysis from six local authorities. We have also included the revenue costs of premises which represent a significant proportion of this block. The split into each function is provided in Appendix One.
This analysis does not address any inconsistent allocations made in preparing the RO forms within each authority nor any changes to the cost base since the RO analysis was prepared in March 2009.
Cost Breakdown – Further Education
Diagram 8 – Activity Cost Summary – Further Education
We have used the aggregated audit data 2008-09 for the Welsh colleges for analysis of the expenditure. The detailed allocation for the pay and non-pay costs is described in Appendix Three. The FE Tribal benchmark data was used to inform the allocation of staff across the standard process model activities. The following is a summary and describes some of the supporting data used.
Direct allocation– some expenditure elements are such that the total expenditure can be allocated to the appropriate activity. For example, premises maintenance was allocated to property, estates and property management.
Lecturers- feedback from FE informs an allocation with the majority of time spent learning & teaching (contact time plus preparation time), with smaller amounts for dealing with prospective students, examination and assessment and curriculum development.
Access 5% Learning & Teaching 46% Learning & Teaching Support 10% Non-learning Services 2% Research & Knowledge Transf er 1% Service Manage-ment 8% Strategic & Support Services 28% Total Cost £000 391,904 Further Education Access
Non - learning services
Strategic and Support Services
18,173
Learning and Teaching 182,550
Learning & Teaching Support 40,888
108,174 Total
7,398 Research & Knowledge Transfer 3,819
Other staff allocations– we have used high level knowledge of the sector combined with the benchmarking guidance notes and feedback from four colleges, DCELLS and ColegauCymru to determine the proportion of staff undertaking each front line or strategic and support activity.
The key cost elements within each block are as follows:
Access– this represents expenditure of £18m. The remainder of the costs are equally split between staff time spent on initial customer contact and assess & decide. Lecturing staff time accounts for the majority of time under both headings.
Service management– this represents expenditure of £31m, wholly on staff costs. Scheduling, specifically curriculum development, represents the major FTE number under this heading. The main staff groups delivering this are lecturers and curriculum coordinators.
Learning & teaching– this represents expenditure of £183m, of which, by far, the major spend area is in lecturer time (including hourly paid staff, instructors and those delivering training to work based learners).
Other service delivery– this represents expenditure of £52m. Learning and teaching support comprises 78% of this expenditure. The bulk of this comprises support given to lecturers and students by technicians, library staff and the IT helpdesk.
Strategic and support services– this represents expenditure of £108m. By far the main element of this is property, estates and property management, with 43% of strategic and support expenditure, followed by strategic support at 11.8%. 60% of the property, estates and property management costs comprise premises running costs and premises maintenance. The split of each function is provided in Appendix Three.
Cost Breakdown – Higher Education
Diagram 9 – Activity Summary – Higher Education
We used the aggregated audited account data (2008-09) for Welsh universities for analysis of the expenditure. The detailed allocation for the pay and non-pay costs is described in Appendix Two. The allocation of staff across the process model activities was informed by the 2008-09 HESA staff return for Welsh universities. The following is a summary and describes some of the supporting data used.
Access 4% Learning & Teaching 17% Learning & Teaching Support 9% Non-learning Services 3% Research & Know-ledge Transfer 19% Service Manage-ment 13% Strategic & Support Services 35% Total Cost £000 1,028,515
Strategic and Support Services
Higher Education 130,137 359,533 Total 45,643 171,313 91,031 29,016 201,842 Access
Learning and Teaching Learning & Teaching Support Non - learning services
Research & Knowledge Transfer Service Management
Direct allocation– some expenditure elements are such that the total expenditure can be allocated to the appropriate activity. For example research grants and contracts were allocated to Research & Knowledge Transfer.
Academic professionalshave a varied role that covers front line services including lecturing students, delivering research, working with industry through knowledge transfer, commercialising intellectual capital, dealing with application enquiries from non-traditional students and postgraduate applicants, managing academic staff, assessment and dealing with student progression. Our approach has been to develop a draft allocation based on sector knowledge which has been tested with sector representatives and amended accordingly. It should be noted that the allocation indicates an average allocation since there will be significant variation in the job roles covered in this group, including lecturers, professors, heads of research groups and deans of department. There will be a significant variation in the balance between teaching and research depending on the mission of the host university.
Other staff allocations– we have used high level knowledge of the sector combined with the benchmarking guidance notes and feedback from four universities, DCELLS, Higher Education Wales and HEFCW to determine the proportion of staff undertaking each front line or strategic and support activity.
The key cost elements within each block are as follows:
Access– this represents expenditure of £46m. The main costs relate to academic professional time spent on enquiry handling and assessment. Academic time spent dealing with prospective students and enquiries from non-traditional entrants into HE and those wanting to study or undertake research at a postgraduate level improves retention rates by helping provide detailed information to inform subject choice. A smaller component is for administrative staff dealing with front line enquiries.
Service management– this represents expenditure of £130m. 33% of this is accounted for by academic management & supervision. This group of staff includes those academics with management responsibilities such as Deans of Faculty and research professors (who lead research teams) and course leaders. Management of academic processes includes managing learning and teaching, research and knowledge transfer and represents the complexity of operations in a typical university. Front line administration represents 26% of the pay and non-pay costs of which the major component is those library staff who do not provide face to face student or researcher support.
Learning & teaching– this represents expenditure of £171m, of which the major spend area is in lecturer time at 76%.
Other service delivery– this represents expenditure of £322m. That research and knowledge transfer comprises 63% of this expenditure is not surprising given that alongside learning and teaching, this represents a core function of the university sector. Research and knowledge transfer are integral components of a HE institution's front line delivery and includes the delivery of university, government and commercially funded research. Knowledge transfer is the engine that facilitates the transfer of university intellectual capital to external organisations via consultancy, spin out company formation, graduate company formation and licensing intellectual property. Learning and teaching support stands at 28%. The bulk of this comprises support given to lecturers and students by technicians, library staff and the IT helpdesk.
Strategic and support services– this represents expenditure of £360m. The main element of this is property, estates and property management with 60% of this expenditure, followed by strategic support at 7% which includes bidding activity. 85% of the property, estates and property management costs comprise premises, residences and catering costs. This level of cost is not surprising given the scale and state of university estate. The split of each function is provided in Appendix Two.
We have tested the method and data with several universities, DCELLS, HEFCW and Higher Education Wales and believe it to be of the right order. The limitations and issues are as follows:
Two staff groupings from the HESA data didn’t provide enough granularity to allow a reasonable allocation to be made. To inform the allocation, HESA return data detailing department, job role and FTE was provided by Cardiff
University, the University of Glamorgan and Aberystwyth University. This data represents approximately 50% of the two staff cohorts. Our view is that given the diverse nature of the three universities who provided data, this should be of the right order.
The diverse nature of HE means that the allocations can only be an average and there will be distinct differences between individual universities.
Cost Breakdown – DCELLS
Diagram 10 – Cost Summary – DCELLS
For DCELLS we were able to conduct an activity analysis by FTE that, although completed more rapidly than normal, followed a usual method. Staff data was taken from DCELLS Finance Department. Fields included Staff Name, Group, Division and Branch. The cost baseline for total staff and non staff costings was taken from DRC Summary Report April 2008 to 31 March 2009. The total cost included YTD month 12, Actual DRC, Actual Programme and Actual EU revenue. The allocation process was managed through Group Managers in DCELLS, who distributed blank allocation templates populated only with information provided by the Finance Department to managers with team responsibility in their respective groups. Both staff costs and non staff costs were allocated across the boxes by using the FTE analysis for proportional guidance i.e. costs followed the FTE allocation
The analysis was discussed with the DCELLS management team after completion and subsequently with the Minister with some adjustments being completed. An explanation of the summary analysis is as follows:
Access– this represents expenditure of £5.4m. Enquiry handling £2.1m represents the most significant contributor. Access activities are split over 17 Divisions, 41 Branches and 260 staff.
Service management– this represents expenditure of £3.4m. Management & Supervision and General Administration represent the major FTE activity under this heading. SHELL has the highest overall contribution reflective of the proportionately higher activity in other service delivery. The split between the remaining departments is relatively even.
Access 15% Strategy & Policy 13% Other Service Delivery 7% Service Manage-ment 10% Strategic & Support Services 55% Total Cost £000 34,597 5,353 4,330 2,469 3,448 18,997
Strategic and Support Services
Total
Other Service Delivery
Service Management DCELLS
Access
Learning & teaching– there is no recorded expenditure against this activity reflective of the fact that DCELLS in not a direct educational provider.
Other service delivery– this represents expenditure of £6.8m. The definition of ‘Other service delivery’ was broadened for DCELLS to include the support given to individuals within businesses who are responsible for skills delivery and training to staff i.e. not just traditional education providers. Strategy and Policy expenditure of £4.3m was also included within the definition to reflect that this is a primary delivery output of DCELLS
Strategic and support services– this represents expenditure of £19m. There is no one activity that is significantly larger than the others, however it is noted that the three largest contributors are general administration £2.3m, Quality
Assurance, Performance Management and Improvement £1.9m and Procurement and Commissioning £1.9m.
Overall- 54% of activity is focussed on the following functions which are core to DCELLS - Customer Contact and Assessment (15.5%), Strategic Support (13.6%), Other Service Delivery (7.1%), Strategy and Policy (12.5%) and Stakeholder Management (5.3%). These represent just over half of DCELLS overall activity.
Cost Breakdown – Non Departmental Public Bodies and Careers Companies
Estyn
Diagram 11 – Activity Cost Summary – Estyn
The allocations were populated by the senior management team at Estyn following a consultation meeting with PwC on the 23rdMarch 2010.
The allocations are based on projected Estyn staff numbers for 2010-11 and exclude Additional Inspectors (AIs) working for Inspection Contractors delivering school inspections in 2010/11.
The number of AIs engaged by Contractors for 2010-11 is estimated to be 11.5 (FTE) – this figure is not included within the activity analysis, although this activity should be recognised to get a true picture of the ‘people’ resources engaged in inspection duties.Total Cost £000
12,986
Strategic and Support Services 3,586
Total Estyn
Access 58
Other Service Delivery 7,635
Service Management 1,707 Access 0.5% Other Service Delivery 59% Service Managem ent 13% Strategic & Support Services 27.5%
Similarly, Estyn has contracted-out its ICT support, estimated as the equivalent of two FTE posts not shown within ‘the analysis. There are also a number of other small SLA agreements with WAG; however it is believed that these probably do not require additional staff resources within WAG.
The staff allocations are aligned with Estyn’s budgetary model, which broadly shows HMI staff costs allocated to Service Delivery objectives (1, 2 and 3) at approximately 90%, and all other staff costs allocated equally (25%) to each of the four objectives.
The Gross expenditure for Estyn has been allocated across the model following the proportional FTE allocation. No attempt has been made to take account of the salary disparities between HMI and the majority of ‘Business Support’ staff.The key cost elements within each block are as follows:
Access –this represents expenditure of £58k. A low amount of activity taken only from Corporate Services is recorded in this area.
Service management– this represents expenditure of £1.7m. The largest activity contributors are General Administration (£810k) and Workforce Scheduling (£434k). The majority of this activity can be found within the Corporate Services Centre.
Other service delivery– this represents expenditure of £7.6m. This is the largest area of activity. Although Estyn perform primarily a quality management role, this activity is primarily time spent working with resources delivering education at the front line. As such the case management of inspections has been recorded as ‘other service delivery’ and not captured within QM and Performance Management.
The implementation of new inspection arrangements for the next 6-year cycle of inspections, commencing September 2010, will see a gradual reduction in the number of inspections carried out under contract arrangements with an increase in in-house provision. This will lead to more FTEs and activity being captured within this area.
Strategic and support services– this represents expenditure of £3.6m. The distribution of costs is spread evenly across Strategic and support services. The two largest contributors are General Administration (£521k) and Procurement and Commissioning (£405k).
Overall- Over the course of the next few years, Estyn’s expenditure profile may change if they take on additional HMI staff and reduce the number of AIs.
Out of an original total of 115 FTE all staff have been allocated by members of the senior management team at Estyn. As such there can be a high level of confidence that the FTE allocation, when apportioned over the five key costs elements, is broadly reflective of activity within Estyn. The cost allocation however could be further refined to be more reflective of the difference in the staff costs between HMI and business support staff.
HEFCW
We used the audited account data from HEFCW's 2008-09 Annual Report for analysis of the Council expenditure. The detailed allocation for the pay and non-pay costs is described in Appendix Seven. The allocation of staff across the process model activities was informed by the HEFCW organisational chart (November 2009). The following is a summary and describes some of the supporting data used.
Direct allocation – some expenditure elements are such that the total expenditure can be allocated to the appropriate activity. For example cost of capital was allocated to property, estates and property management.
HEFCW allocated the remaining costs for “administration” at a detailed expenditure level. Elements under this heading included audit fees, hardware and software purchases, health and safety equipment and maintenance costs.
All activity fell under strategic & support services since HEFCW does not deliver front line services by way of teaching, research or knowledge transfer. A number of job roles work closely with the HE sector and undertake
activities such as assessing quality or identifying and managing risk. Since these activities are not examining HEFCW functions, they have been classed as falling under strategic support although they could be classed as core functions of HEFCW. HEFCW also has a significant policy role which covers areas such as widening participation.
Other staff allocations – A meeting was held with HEFCW comprising members of the Chief Executive’s Office and the Management Team (Chief Executive, Director of Finance and Risk and Director of Strategic Development) who detailed how each job role was allocated across the standard process model.
Strategic and support services – the entire cost base is allocated to strategic and support services. This represents
expenditure of £3.3m. The largest area of expenditure is staff costs at 67%. Strategic support accounts for the largest FTE group at 52%. A significant proportion of HEFCW activity is in the strategic support of the HE sector. This includes providing advice and guidance on areas such as estates, procurement and widening access. HEFCW has a role in
implementing policy and for example, manages funds which aim to develop an efficient and effectively structured HE sector. There is an argument that since HEFCW activity directly impacts on front line services some of its functions should be classed as front line support. The structure of the standard process model is focused towards those that deliver learning and teaching and does not consistently allow other services to be classed as front line.
Careers Companies
Diagram 12 – Cost Summary – Careers Companies
Total cost of £42.3m includes staff costs of £31.8m (1,065 FTE’s) and non-staff costs of £10.5m (including £3.8m in respect of sub-contracted and other delivery costs, and property, estates and property management costs of £2m).
The key cost elements within each block are as follows:
Access– this represents expenditure of £2.1m. This activity relates largely to the work of customer information receptionists in dealing with and processing enquiries from clients on a day to day basis. 60 FTEs are allocated to initial customer contact.
Service management– this represents expenditure of £5.2m. This largely consists of the activity of project co-ordinators and team leaders. Management and supervision accounts for 5% of total costs.
Access 5% Other Service Delivery 59% Service Manage-men t 12% Strategic & Supp ort
Services 24% Total Cost £000 42,343 Service Management 5,197
Strategic and Support Services 10,212 Total
Other Service Delivery 24,804
Careers Companies
Other service delivery– this represents expenditure of £24.8m. This is based mainly on the careers companies’ own FTE allocations (for example, 100% of adult / youth advisers FTE’s is allocated to Service Delivery, with no allocation of their time to other Front line Services categories).
Strategic and support services– this represents expenditure of £10.2m. £1.5m is spent on procurement and commissioning (3.6%), £1.8m on strategic support (4.3%) and £2m on estates and property management (4.8%).
Overall- of total cost, £32.1m (76%) is allocated to Front line Services which includes the activity of employment training assistants and careers assistants. This includes £24.8m (59%) to Service Delivery, and £10.2m (24%) to Strategic & Support Services.
