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Building a new financial model Andrew Grant explains how Aylesbury Vale District Council has overhauled its business model

‘How did we do it?’ How Norwich City Council transformed into an award winning success story


Transform - Issue 3


Editor’s letter


Focus & Comment


Building a new financial model

iESE Chief Executive looks at innovation in the public sector

Opinions on local government issues

Andrew Grant, Chief Executive of Aylesbury Vale District Council, explains how the council has overhauled its business model


Delivering through Efficiency


Latest News

The winner of this year’s Improvement & Efficiency Award ‘Delivering through Efficiency’, Norwich City Council speak of their success

All the latest news and events from iESE


iESE Introduces… This edition sees the introduction of Marianne Abley, a new associate to the iESE family working on innovation in leadership



Transform with us… Discover the benefits and potential savings your council can make by working in conjunction with us

iESE Transform Issue 3

Editor’s letter

Editor’s Letter W

ith communities depending heavily on the services that their councils deliver and on the staff who deliver them, our radical transformation journey is rapidly moving with the times and continuously adapting to what is, at present, a fast changing local government agenda. It’s only been a couple of months since our last issue of Transform, but in that short space of time, we’ve had the Budget, Local Government Elections, and most recently The Queen’s Speech. All individually important for our sector and all ensuring that, once again, we look further to new innovative ways of delivering improved services that make a real difference to people’s lives at reduced cost. Every single day, there are examples of people going the extra mile to deliver these services and a number of local authorities are quite rightly, celebrating after recently winning an iESE Improvement and Efficiency Award at this year’s ceremony. In this issue you can read how Norwich City Council, the winner of the ‘Delivering through Efficiency’ Award transformed from a failing council to one that now boasts enormous success and a delivery saving of £20m of general fund revenue savings. We also have an update from Andrew Grant, Chief Executive of Aylesbury Vale District Council who explains how his council is ensuring it remains sustainable for the future and shares some innovative solutions. As we all know, shared management in many District Councils has gone from being a radical alternative to the standard option to deliver improved services at less cost. Whilst it has delivered breathing space for now, we all need to be considering how the next generation council will look and perform. iESE is hosting a fringe event at this year’s LGA Annual Conference with the District Council Network to examine this in more detail. Please do pop along to share your experiences and hear how other innovative ways that councils are delivering in such hard times. Details can be found on page 4. If you can’t make the fringe event, you can find us at stand E30 throughout the whole of the conference, so why not pop along to say hello. And even if you aren’t in Manchester for the conference, Transform magazine provides the platform for all councils to showcase their groundbreaking successes. If you would like to provide an article for Transform on how you are doing more for less, please do not hesitate to contact us on 01883 732 957. Enjoy!

Dr Andrew Larner Chief Executive, iESE

iESE Transform Issue 3


Focus & Comment


Comment Now is the time to form a shared services network that all can benefit from

Beyond shared management – where next? Brandon Lewis MP, Parliamentary Under Secretary of State for Communities and Local Government, will address this year’s joint iESE/ DCN session at the LGA Annual Conference. Shared management in District Councils has gone from being a radical alternative to being a standard option to deliver improved services at less cost. This session will explore the lessons learned with the longest established partner councils and look at how these benefits can be achieved for those councils without the potential for a neighbouring partner. Tuesday 2nd July 18.45 – 19.30 Exchange 8


Now is the time to form a shared services network that all can benefit from. Merging or sharing services to ensure sustainability, improvement and delivery at lower cost is now the only way forward for many local authorities. But how are we sharing our experiences and ensuring the vast knowledge that we are each acquiring fully helps steer others in what is now a fast growing way of working? Whether you’re sharing a senior management team; using the same website; pooling back office and front office facilities such as legal functions; business rate teams or fraud teams, or following in the case or Adur and Worthing and investigating joining together as one authority, there are ample solutions available to ensure everyone is getting value for money and high quality services continue. iESE believes the time is right to form a shared services network that all of the public sector can benefit from. If you’ve successfully merged services with a neighbouring council, are looking further afield to join up or are thinking about creating a new organisation to run local services, then please join now. We have also conducted extensive legal research into all the possible forms that you may wish to take together with their advantages and disadvantages. Please contact our BSU on 01883 732 957 to learn more and help reduce your costs of implementation.

Keep up to date with all the latest iESE news and events by following us on Twitter @iESELtd


iESE Transform Issue 3

iESE Transform Issue 3



Building a new financial model Andrew Grant, Chief Executive of Aylesbury Vale District Council, explains how the council has overhauled its business model. Fifteen, or even five years ago, the idea that a public body or a local authority might go bankrupt was unthinkable. However, in the last 12 months we have seen at least two ‘bankruptcy’ warnings issued by councils. What’s going on, what’s changed? What’s happened to the status and dependability of our public institutions?

The simple answer is that the old financial model is broken. In its attempt to solve the national debt crisis, the Government has massively constrained grant funding for local authorities. These reductions are unprecedented and, coupled with a clamp down on Council Tax, effectively dismantles the main components of the old business model. With it goes the age-old principle that Council activities should be on the Government payroll, providing services largely free, or heavily subsidised, at the point of consumption. It’s not that Councils have failed to make year on year efficiency savings in the last few years but this was simply to bring them into a state worthy of justifying their place on the payroll, and the Daily Mail readership. But the game has changed. It’s about whether, left to its own devices, a Council can make a case for generating the income itself, to replace Government Grant. This is probably the true legacy of localism… you’re on your own matey.


The critical questions for local authorities now are “Why would local customers buy your services?”, “At what price?” and if not, “How will you redesign your product range to be of value to them?” This is essentially a new model. A business model at that, compared with the age-old financial subsidy approach of the past. The new model is based on a commercial approach to council services as products, with value propositions for the customers it serves. For the past year I’ve been working on a major switch-over in Aylesbury Vale District Council, from old to new. Like most of the people reading this we have been making efficiency savings - over £1m plus per year - in the ways that iESE would expect us to on any ‘checklist’: service restructuring, sharing, smarter procurement, council to council sales, better use of technology, asset rationalisation… all the usual suspects. All of what I call ‘doing the wrong thing righter’ – i.e. a better version of the old model. Between 2010 and 2015, Aylesbury Vale District Council’s (AVDC) government grant will have been cut by 48% (£5.4m) meaning we’ll have £210 a year to deliver services for each home compared to the current £319. This calls for a radical rethink of the demand side of the equation, and for a new business model – one based on the development of a range of valued products for customers, the monetisation of our processes, where we can, and a cross-subsidy to the statutory ‘life-saver’ services where we can’t.

iESE Transform Issue 3


iESE Transform Issue 3



What I’m now fixated by are the answers to: • What is my council’s offer, or product range, to its customers? • What are customers saying about what they value and are there products available from the council to satisfy these demands, at a price and quality that is attractive? • Does the council even know who their customers are, what they are seeking to make their lives easier and what new products could fulfill this? Can we deliver? We’ve got great skills, knowledge and an enviable customer base but we covet some of the freedoms and flexibilities of our business competitors. We can’t simply pick and choose our product portfolio – some of our services are statutory. Nor can we always pitch our price according to market demand – some charges are set by government. And there will be challenges for our political masters as well as staff – selling, for example, is not one of our core skills but will need to be.

How are we implementing this? Our big idea is to use the ‘business model canvas’ The canvas is what it says, a one page compendium of the elements that make up a successful business case for any product or service. It’s made up of a number of building blocks which work together to systematically guide a review, from a financial and customer perspective of existing services whilst identifying potential new services worth exploring further. Using the business model canvas will help us address questions such as: • Is a service currently provided sufficiently valued by customers to continue delivery? If not, can we change it to make it of value or should we stop providing it altogether? • If we currently charge for a service, is it at the correct level to reflect its value to the customer? If there are competitors, how does their service compare? Can we offer something extra that customers are willing to pay an additional or premium charge for?

• How can we cross sell our services? • What new services do residents and businesses need that they would be willing to pay for? How would we deliver a new service? How much profit would it generate for the council? Although it is early days, I believe AVDC is well placed to use a business approach to service delivery to help achieve overall benefits for our customers. We have an enviable wealth of skills, knowledge, and expertise that we need to capitalise on and immediate access to a large base of customers – the residents and businesses of Aylesbury Vale. We need to use this relationship together with commercially available customer data, to feed into the business model canvas. This is difficult conceptually for customers, most of whom only ever know us for emptying their bins once a week. Most will be unsuspecting even if eventually willing to engage. It requires a new ‘contract’ with people and this will take time to promote and establish as with any new brand. It will take effort and courage as, as with any council reputation, there are as many that would praise us for a job well done as those who think we’re just the ”bloody council”. Think of your own situation. Do you cringe when someone at a social gathering asks you what you do, and when you tell them confess all their woes about their bin collections or recent planning application? The new business model is being trialled in Planning and Leisure. These services have been selected as they have the largest variance between cost and income.

The Business Model Generation website.


Currently the cost of processing planning applications, after fee income has been taken into account, is £500 for every application. This is despite over 90% of all applications eventually being approved. In Leisure, the

iESE Transform Issue 3


costs of providing services is over £7million. This is offset by income of just under £1million leaving a funding gap of over £6million.

Most importantly its where their work is on show where anyone within the council can go in and take a look, comment or contribute.

All these factors give me huge confidence that we can thrive under a new model. What we need to do is instil this confidence within our staff and Members, and make the case to local people that they will benefit. Put simply our success depends upon unlocking the discretionary spend of the comfortably off. This is a fundamental shift in council philosophy for 100 years. Given our new customers are unlikely to compensate pound for pound for the loss of Grant, it will mean our purpose, scale and focus as an organisation is bound to change too. After all, the cuts all councils bleat about are in old model budgets, serving old model services. My budget structure was originated in 1974 and has been iterated and amended for the intervening 39 years. I believe this is the case in all Districts.

Re-working, and implementing business models. We started in summer 2012 to bring together staff from both services in workshops to get their input into the new business model approach. A wide range of ideas for redesigning existing and new products and income potential have now been generated. Business canvases are now being worked up for a number of these and will come forward in due course for Members’ consideration. Under the new business model, the process of robustly challenging what we do, is a fundamental, though exciting shift from the traditional council approach. Many staff have a natural affinity with the approach, but for some it will mean a bit more adaptation and they will receive our full support to do this. Our recent innovation to help maintain the intensity of work and momentum is to establish an ‘engine room’ where staff go to work on their canvases rather than competing with the day job at their desks. It’s where our project management, tools and support will be.

iESE Transform Issue 3

The rapid withdrawal of Government grant, potentially accelerated by CSR15, coupled with constraints on council tax charging, means that we must have a new business model for all or most of our services by 2016 if we’re going to secure our future. Unless we have found a way to generate equivalent income to that which we are losing in the same timescale, or reduce our “product range” to a very select range of services, and then to a prioritised selection of the community, we may not have a sustainable future at all. I do not want to see the council get into this position, so we must radically change the way we operate, with customers as the start and finish of the model. Going from ‘that bloody council’ to ‘cool council’ isn’t going to be easy. But with our mostly homegrown expertise and our high reputation for transparency, residents are already benefitting from our intellectual capital and our ever growing track record of achieving in tough times.

The change needed to serve a discerning, choosy, articulate and selective new customer base is going to test and alter all of our processes and people. It is and will continue to create tension within our potential leadership, as it challenges what values and principles they were elected on. My pragmatic view is that it’s my job to build resilience and continuity into the political vista of the organisation, so that current and future politicians have a choice about the what, how and when of AVDC. Nailing ourselves to the old business model merely consigns AVDC to history. The new model, though different and challenging, creates an opportunity for a sustainable and relevant ‘commercial’ council to emerge.


Delivering through Efficiency

Delivering through Efficiency The winner of this year’s Improvement & Efficiency Award ‘Delivering through Efficiency,’ Norwich City Council has transformed from a failing council to one that now boasts enormous success and significant savings. Cllr Brenda Arthur, Leader of the Council explains how strong leadership and dedicated staff can build a strong authority of the future. 2012 was a remarkable year of achievements for Norwich City Council. Despite delivering further significant savings we’ve continued to improve our key services, earnt independent praise for our improvement journey through a successful peer challenge and successfully raised the City’s profile. But only a few years ago Norwich City Council was a very different organisation. Our finance systems and core frontline services weren’t operating as robustly as they should; we had a zero-star rated housing service and low recycling rates. Our staff felt de-motivated and our reputation was at an all-time low. A vast improvement plan since then has transformed the council. We are now performing much better with our residents happy with frontline services; we’ve been awarded for our excellence in tenant participation for our housing service and we have a recycling service with rates that have more than doubled! Major improvements in housing and planning mean our services are now driven by the needs of our customers and our staff are now proud to work for us and are extremely keen to go the extra mile to help.


It’s certainly been a challenge but by joining together going forward, everyone at the council has helped build a much stronger organisation moving forward and have simultaneously delivered £20million of general fund revenue savings. So how did we do it? Well to start, we needed to build an effective member and officer joint leadership to develop a clear vision and empower staff to achieve it. Our strong senior political and managerial leadership that developed enabled those big decisions to be made and partnerships to be formed to ensure our priorities and overall ambitions were fully supported. We collectively identified new innovative approaches being used by other local authorities and other organisations across the UK and invited them to showcase their ideas and solutions through master classes to embed them into ours. We listened to our residents and established strong partnerships with organisations such as the Homes and Communities Agency; Local Government Shared Services (LGSS), Norwich Clinical Commissioning Group, Norfolk Constabulary and a joint venture with Norfolk Property Services as well as the local voluntary sector, that could all support our improvement plan and allowed us to maximise the use of resources across our City.

iESE Transform Issue 3

Cllr Arthur, Leader Norwich City Council and Russell O’Keefe, Executive head of strategy, people and democracy are presented with their award by Alan Coole, Development Director of Scape. Since then, I am proud to share a selection of our vast achievements with you. By working together, Norwich City Council has: • regularly achieved over 90% in customer satisfaction surveying; • made an estimated social saving in excess of £12m with our families unit (FIP) that supports families with multiple problems and has been rated by the DfE as one of the top FIPs in the country; • reduced re-let time for council housing by more than 70% going from 64 days to just 16; • helped hundreds of people through our financial inclusion programme;

iESE Transform Issue 3

• achieved a recycling rate of over 40 per cent with the amount of waste produced per person reduced by 18kg – the biggest improvement in the country;

• been awarded for our excellence in tenant participation and have retained our customer service excellence standard for yet another year.

• received recognition from DCLG as having the highest decrease in CO2 emissions per capita in the south and east of the UK;

The learning we have developed through our work to transform is regularly shared with the wider sector. We’d happily share our experiences with you.

• become the first City in the country to run a collective energy switching scheme; • ran a successful innovative Learning, Employment and Accommodation Project giving 78 homeless, unemployed people education with 19 moving into independent accommodation and 18 into employment already; and

Councillor Brenda Arthur was appointed as leader of Norwich City Council in May 2011. For 17 years, she was chief executive of Age Concern Norwich (now Age UK).


News & Events

Latest news For all of us in local government, together with our private and third sector partners, living with and excelling in spite of severe financial pressures has become a way of life. To celebrate the achievements and truly groundbreaking transformation of local public services in such difficult times, iESE’s fourth annual Improvement and Efficiency Awards Ceremony took place on 6 March 2013 in London. We were delighted to be joined by Baroness Joan Hanham CBE who gave a very positive speech, encouraging the audience to continue with their fantastic work and inspiring us all to go even further. This fully sponsored event was a huge success and demonstrated what we all know already – that councils will continue breaking down the barriers to further transform, keep those much relied upon services running and get value for money. A very special thank you to our sponsors*, who without them, iESE would not be able to showcase the vast talents across local government. This year’s winners are: Connecting People Aspire Sussex (Joint Gold) Aspire Sussex is an aspirational, staff-run social enterprise that leads the planning, promotion and delivery of vibrant adult education in Sussex. Birmingham City Council - The England Illegal Money Lending Team / Stop Loan Sharks (Joint Gold) The Illegal Money Lending Team (IMLT) has bought 220 Loan Sharks to justice with over 19,000 victims helped and £40,000,000 of debt written off. ASC, Surrey County Council, Prevention through Partnership (Silver).

Transformation in Waste & Environment Metropolitan Police Service Property Services Department – Environment and Sustainability Team (Gold) During the summer of 2012, the Metropolitan Police Service managed its biggest ever peace time operation during the London Olympic and Paralympic Games. East Sussex Joint Waste Partnership (Silver) Merseyside Recycling Waste Authority – New Merseyside Textile Forum (Bronze)


Fire & Rescue Project of the Year

Working Together

Cheshire Fire & Rescue Service (Gold) Cheshire Fire and Rescue has a proven track record in “prevention is better than the cure” and has seen a range of positive outcomes not least a reduction of 70% of injuries in fires and a reduction of 41% in house fires. Phoenix Project, Cornwall Fire & Rescue Service (Silver) Tewkesbury Water Rescue Centre (GFRS/SARA) (Bronze)

Wigan, St Helens and Warrington - WWISH Shared Adoption Service (Gold) In October 2011 Warrington, Wigan and St Helens Councils brought together staff to form a shared adoption service, following extensive service redesign. This has led to significant efficiencies and improvement in speed and numbers of children adopted within the boroughs. Royal Borough of Windsor & Maidenhead – Flexible Home Improvement Loans Ltd (Silver) Reading Borough Council – Think Families: Future Families (Bronze)

Entrepreneur Award 2013 ICT Refurbishment Ltd 77% of the UK’s eWaste was illegally exported to West Africa. In the UK, 1 in 4 adults do not have access to the internet. ICTR believes these two complex issues are unacceptable. Working with clients to stop this, they turn their eWaste into eValue, creating a circular IT economy through Responsible Refurbishment.

Transformation in Social Care WLA Special Educational Needs Programme (Gold) The WLA Special Educational Needs Programme is a partnership initiative, involving 9 London Boroughs, that is delivering a specialist sub-regional category management strategy. Oxfordshire County Council and MacIntyre, working in partnership (Silver) Wigan, St Helens and Warrington – WWISH Shared Adoption Service (Bronze)

Police Project of the Year Metropolitan Police Service Property Services Department – Environment and Sustainability Team (Gold) (see Transformation in Waste & Environment) Trafford Council and GMP Trafford Division (Silver) Avon & Somerset Police - Faith Liaison Officer Programme (Bronze)

Delivering through Efficiency Norwich City Council (Gold) Despite delivering further significant savings, Norwich City Council has continued to improve key services and successfully raise the City’s profile. Surrey County Council’s Public Value Review Programme (Silver) Aylesbury Vale DC – ‘One Team, One Council’ (Bronze)

Transforming Local Services Cornwall Fire & Rescue Service – Phoenix Project The Phoenix Project is a pioneering community scheme in Cornwall that utilises fire service training and activities to help vulnerable people to achieve positive goals. London Borough of Tower Hamlets – Cllr Shahed Ali (Silver) Aspire Sussex (Bronze)

Council of the Year Surrey County Council (Gold) Surrey CC’s Public Value Review Programme focused on the things that matter to residents: Surrey County Council’s Public Value Review Programme has reduced costs (£279m savings identified) whilst also improving outcomes for Surrey residents. Essex County Council (Silver) London Borough of Havering (Bronze)

Outstanding contribution to improvement and efficiency in local government Councillor Paul Bettison, Leader of Bracknell Forest Council and Chairman of The Improvement and Efficiency Social Enterprise *This year’s Improvement and Efficiency Awards were sponsored by Cable&Wireless Worldwide & Vodafone, Partnership, Scape, Bevan Brittan, Diligence Security Solutions and KS Agency.

Events 2nd - 4th July 2013

LGA Annual Conference Stand E20 (further regional events to follow)

Wednesday 11th September 2013

Waste & Resources Partnership Forum RWM Exhibition, Birmingham To find out more about any of these events, contact us at

01883 732 957 iESE Transform Issue 3









Ignoring disposal risks could lead to hefty fines and possible conviction


Eradicate your risk of potential fines and litigation Create additional cash flow Provide you with a sustainable solution to end of life IT Give you peace of mind Reduce your carbon footprint

If you’d like to join the iESE/ICTR pilot please contact or call 01883 732957 To find out more about ICTR please visit, call us on 0800 043 0103 or contact Responsible refurbishment From eWaste to eValue

Personal Profile

iESE Introduces… Personal Profile: Marianne Abley iESE Principal Associate - former regional associate of the IDeA

Having worked as a member of corporate management teams in health, local government and the civil service in the UK and abroad I have a keen interest in the changing models of leadership in the public sector. Casting my mind back it is amazing how the priorities for leadership in local government have changed. However the principles that underline these priorities and the enthusiasm that the sector brings to them have not changed. It is interesting for me to reflect on the history of leadership in local authorities in the UK. In the 1980’s we were influenced by social sensitivities and there was emphasis on leaders who created changes by deep structures and major processes. As the public sector moved into the 1990’s leadership had an emphasis on ethical responsibilities and stewardship integrating transactional and transformational. By the 2000’s there was a demand for change skills, vision articulation and innovation involving dialogue, collaboration and consensus. A more adaptive style of leadership was evolving. In my roles at iESE, the Local Government Association and the Audit Commission I have facilitated visioning, strategic priority setting and strengthening joint working in many Councils. I have been a member of several Improvement Boards supporting change in the delivery of services for vulnerable people. These experiences have given me a unique opportunity to work alongside top leadership teams in local settings. Recently I led sessions at the iESE Council 2018 Member Exchange when leaders and cabinet members from a wide range of authorities came


together to share thinking on models of local leadership in the new public landscape. The future role of leaders and the support needed to develop the skills required in the future were also considered. We discussed the need to respond to increasing expectations, citizens’ empowerment, technological and communication developments and the changes in workforce and delivery. As Councils move forward to 2018 they are facing major external, organisational and community challenges whilst implementing further substantial efficiency savings in an era of unparalleled change. Change is not new to leaders, however it seems to me that it is the accelerated pace of change that is and the environment in which public services now operate. Citizens groups are becoming increasingly complex with growing, changing and contradicting needs and expectations.

There has been a major shift from that of passive consumer to more customer led high quality delivery with an increasing push for personalisation of services. Leaders need to be equipped for the technological rapid advancements and what these mean in terms of engaging and the impact on how services are delivered. There are many challenges being faced by public service employees and managing risk, in a sector that has low tolerance of failure, has to be

balanced with the development of changed cultures for innovation in service delivery to prosper. So how do I describe leadership in local government over the next five years? The key words I use are collective, collaborative, adaptive and transformational. Prevalent will be the need for building relationships, visibility, confidence and trust both internally and externally. Good leaders are thinking beyond immediate delivery to implement options for alternative models of delivery and cultural change to manage future demands. They facilitate strategic decision-making that seeks consensus for best local solutions, which is rooted in understanding the facts and looking to the future based on effective and predictive analysis. As we look forward there needs to be agreed common ambitions and goals with joint strategic plans to deliver efficiencies and improvements fit for the place. Leadership skills are becoming so much more developed and bringing them together with welldeveloped business skills will deliver the next step in the evolution of local government. This has led me to develop a menu of Leadership and Innovation support at iESE. Our programmes include: strategic challenges, reviews and health checks; targeted and tailored activity to support local leaders; learning exchanges and networks; and assistance on implementing new delivery models including shared services. Our offer supports political and managerial leaders to tackle critical issues and to continuously improve local services as they respond to the changing public sector landscape. iESE Transform Issue 3

Transform with us!

Be a part of… Owned, led and governed by councils, we are a not-for-profit social enterprise, here to help public bodies throughout the UK deliver improved services at lower cost. Our highly skilled team can help you deliver groundbreaking money-saving solutions to almost any public service.

When iESE works with you to save your authority money and improve its services, it also transfers its skills to your authority’s staff. Not only does this mean that you can sustain your transformation, it also means that you can become a part of iESE and help other authorities transform.

With over 75% of UK councils now using our services and other public bodies requesting to work with us, our knowledge and expertise is being shared with thousands every single day. By using our services you have the option of becoming an owner. Whether you want to own a part of the business or if you want to have a leadership role for the mutual as a whole you will always be welcome. Our members have the benefit of accessing our services without the

need for the usual procurement bureaucracy, reducing the cost of transformation to us and to our owners. However you wish to get involved with iESE, you can be assured of an innovative, sustainable and forward-thinking way of working. Our effective results already speak for themselves with us saving councils over £250M and for every £1 that is invested in iESE, at least £5 in efficiency savings is generated.

To help your organisation benefit from the wide range of services we offer, why not find out more about becoming part of iESE - contact us today on or call on 01883 732 957


Waste Management Services Framework aims to save councils


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iESE has generated over £270 million worth of efficiency savings over the last 5 years…

iESE Transform Magazine - Issue 3  

The third issue of iESE's Transform magazine