Transform Issue 2 - September 2015

TRANSFORM ISSUE 2

Unlocking commercial property potential Cllr Pat Roberts reveals how Runnymede are boosting the local economy

Cover Story Martin Sykes explains how better managed procurement is vital

Contents

Transform - Issue 2

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Editor’s letter

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Focus & Comment

iESE Chief Executive discusses the recent challenges overcome by local government

Opinions on local government issues

Getting the right services for the right price Martin Sykes explains how better managed procurement is vital for councils

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Unlocking your commercial property potential Cllr Pat Roberts discusses maximising the use of commercial property

12 i ESE Introduces…

14 Latest News

All the latest news and events from iESE

In this issue of Transform we introduce Steve Coates CEO and founder of ICTR

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Transform with us…

Discover the benefits and potential savings your council can make by working in conjunction with iESE

iESE Transform Issue 2

Editor’s letter

Editor’s Letter

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ocal government certainly hasn’t stood still since the last issue of Transform. We’ve seen new adoption and fostering reforms, a £250m waste collection fund from DCLG and a great deal of speculation when central government announced its new planning reforms.

We’ve also witnessed the fantastic work that councils put into protecting their residents during severe weather when flooding swept across the UK in November and the snow fell in January.

Nobody could fail to realise how they kept the country moving, working around the clock gritting roads and ensuring the vulnerable were kept safe. It’s a testament to everyone involved and reminds the public of the truly vast and sometimes, difficult duties that dedicated staff across the country are up against.

In this issue of Transform, we examine how councils are working hard for their residents to provide them with value for money. We learn from Runnymede Borough Council on how they, like many councils, are maximising their commercial property to bring in further income; and how a procurement academic views the future of local government. We also showcase a new ICT refurbishment company that is saving councils money, helping those in social deprivation and is ensuring that councils aren’t met with extremely large fines with their digital waste.

All good examples of how councils, currently faced with having to make those difficult budget decisions again, are changing the way they work to compensate even further government cuts. We already know from the LGA that councils have saved their council taxpayers a quarter of a billion pounds by teaming up to deliver frontline services and sharing back office functions, but many have gone further.

The innovation that is emerging across the UK is truly groundbreaking and we want to provide you with the platform to showcase your successes and allow you to share your experiences with others.

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 2

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Focus & Comment

Focus

Comment It is the economy, stupid!”…“But at which level…?

Council 2018 – what will the future hold?

With councils being urged to ‘break the rules’ and be bolder and braver, how can they transform and do more for less to keep much relied upon services running for council taxpayers?

This year iESE is hosting a number of regional events to provide senior decision makers with an innovative, fresh and interactive forum to exchange ideas with like-minded peers and debate the critical assertion ‘radical change requires radical thinking’.

To book your place at an event near you, please visit www.iese.gov.uk/events or call 01883 732 957

The economy is the big headache at the moment for most people in the UK and across the world with stimulating economic growth and innovation as an engine for growth being pursued by many.

Public procurement has a key role to play with its large spend of £62 billion in local government alone. One of the “tools” that is said to help tendering from a buying and supplying perspective is the so-called “business portal”.

However, there are many different versions and wider Electronic Procurement initiatives that operate at different levels from national, to regional, to local. Increasing local independent initiatives together with pending EU legislation could make it harder for businesses to win contracts across local Council borders. Localised adoption of tools could mean a sub-optimal infrastructure is created that may not maximise the economic support function although on the other hand it could increase the chances for local firms as well as reduce process cost for suppliers and buyers.

So the question is: “what will the future hold?”, “are we missing an important opportunity for economic support?“, and does it matter at all?” are all pertinent questions. In order to gather your views and comments, iESE has launched a short survey to help gain an understanding of current practices and future direction.

Visit www.iese.gov.uk to take part

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

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iESE Transform Issue 2

Efficiency iESE’s Efficiency Challenge is a no-nonsense approach to helping you achieve maximum efficiency savings. We have already helped councils save over £250m.

Our team of experts use strategic intelligence and data to provide you with a full analysis of your council, a half-day workshop, a detailed planning session and a full report of quick and clear solutions ensuring you save money whilst providing the best quality services to residents.

And that’s not all - we pride ourselves in being able to deliver the results for you, so you can reach your targets.

To take the challenge, contact us at enquiries@iese.gov.uk or call 01883 732 957 Transforming public sector together

iESE Transform Issue 2

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Feature

Getting the right services for the right price Martin Sykes explains how better managed procurement is vital if councils are to sustain service levels and ensure value for money for council taxpayers As we leave behind 2012, a most memorable year, and enter 2013 with the stock market at its most buoyant for some years, it might be useful to reflect on what we can learn from the recent past and consider how procurement should contribute…

I was privileged, as an associate of Action Sustainability and in pursuit of the sustainable procurement learning legacy, to be given extensive access to the people and records of the 2012 Games construction project. There is no doubt that the project achieved great things in terms of sustainability, be that environmental, social or economic; and whilst the debate on whether coming in under budget was as a result of good procurement, or a fortuitous downturn in the economy, or both; the construction project was a master class in risk management and all the venues were ready on or ahead of time.

Most local authorities will never have the resources to manage projects in the way that the Games construction was managed. However it emerged that certain aspects of the procurement process proved to be more effective than others, and it really isn’t necessary for public sector procurement to be as complicated as it is. Having well-researched, evidenced, realistic, and clear sustainability policy with smart KPIs and communicating it early to the supply market removes ambiguity in expectation, giving competition the chance to deliver better value.

Prequalification offers limited scope for influencing outcomes and, increasingly carries the risk of legal challenge. The MEAT1 evaluation of tenders,

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with arbitrary weightings and subjective scoring of quality statements2, is not only resource-hungry and time consuming, but also carries the risk3 that in some cases inordinate price premia could be paid with little real difference in performance. What worked best for construction of the Olympic Park was a combination of good contract management against those KPIs coupled with active and supportive interaction between client and contractors. No one had anything to gain if the contractors failed to achieve what was required!

‘Having well-researched, evidenced, realistic, and clear sustainability policy with smart KPIs and communicating it early to the supply market removes ambiguity in expectation...’

In addition, I was also involved in a number of reviews and investigations during 2012 into large procurements that had stalled in the face of supplier challenge and judicial review, or public bodies whose procurement had fallen foul of audit. All of these only served to confirm that we over-complicate public procurement, increasing the risk of challenge and to the detriment of what we are trying to achieve – better value for the citizen in a trying fiscal environment; more for less.

iESE Transform Issue 2

Feature

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Feature

So, how does this all play into the future and what does it mean for procurement?

First of all, procurement skills are not always as accessible, especially by smaller Authorities compared to large multi-multi million projects and organisations. As such there is still much to gain from collaboration and shared services and the many new business models that we see emerge could offer a helping hand to many. Adopting these new models is likely to be a more medium to long-term solution.

The public sector needs to find a way to take advantage of competition and dynamic markets, especially at the commodity end of spend...

Secondly and in the short to medium term it is still important that procurement plays a more strategic role in decisions early on in a process so the focus can be on value add for delivering services and not merely on running a process.

Albeit it not new, this may mean that the right procurement people will probably have to get involved in better understanding demand and doing more research and development type activities, have improved engagement with markets and ensure a clear link between desired outcomes and any sub-sequent contracts (and performance management!).

Demonstrating this value through resulting lower cost is of course still important if not more so than ever

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2.

3.

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as direct and all indirect costs in organisations are under severe scrutiny.

Thirdly then, the short and immediate term, and this may pose the biggest challenge.

The public sector needs to find a way to take advantage of competition and dynamic markets, especially at the commodity end of spend. This requires balancing legal compliance with more flexible and shorter-term solutions to achieve value, transparency and an efficient process alike. But why….let’s take a look at the economic situation…

There are conflicting signs relating to our economic situation. The FTSE100 Index is now (at least as I write) around 6100 and the mood is for share growth to continue, which suggests either the investors have lost their senses – unlikely after three years of limited growth, or those at the heart of industry have seen signs of recovery. At the same time the pressures on public spending (which must be very clear to local authorities), increases in personal taxation and cuts in benefits indicate that tough times will continue. If the optimists are right and we are coming out of recession, then history shows

that more suppliers will go to the wall, not fewer, as the creditors take steps to call in their debts.

If the hard times continue, then competition will drive down prices even further as desperate suppliers endeavour to cover their overheads and just stay afloat. In either event, the buyer, in pursuit of value, needs to be flexible. In these times we need to play a short game whilst keeping our administrative costs down.

For some councils, being able to use a framework is a welcome solution. There is no doubt that frameworks have earned a place in what is a complex and fast moving market. Frameworks can provide the certainty that you are acting in a fully compliant environment with access to often cheaper and quicker deals, reducing burdens and ensuring you are helping shape the market with a less complex tendering process.

In these times we need to play a short game whilst keeping our administrative costs down.

Most Economically Advantageous Tender (MEAT) I.e. even though consensus scoring can be used to de-risk subjectivity, quality statements are still being scored that reflect how the supplier expects to work but are no means a guarantee. Actual contract management has to monitor performance. Previous performance may help in assessing likely quality but this tends to be done as part of the PQQ/selection stage and cannot be re-done at award stage.

As I demonstrated in a research paper for the 2012 IPSERA (International Purchasing and Supply Education and Research Association) Conference in Naples.

iESE Transform Issue 2

iESE

For me, it is imperative that these frameworks support small businesses and local suppliers as well as the more well known companies. But a framework may not be the panacea for all as for much of what we buy (and aren’t there great similarities between all local authorities) we perhaps also need further dynamic procurement solutions – more akin to the way we as consumers behave these days.

This is at least most likely in particularly volatile markets with low up-front investments and/or low switching costs.

Frameworks for complex services and/or monopolistic supply markets have a place if managed properly with strong supplier engagement and a focus on new solutions and continuous improvement opportunities. But must we be so inflexible in our specifications for consumables, which tend to be low value and easily interchangeable?

Should we be leaning to more frequent (but simplified) procurements with real commitment and is there any real reason why we should not rely more on open tendering in some cases? Spot buying opens the market to more and smaller buyers and so the risk of supplier failure is mitigated.

‘But must we be so inflexible in our specifications for consumables, which tend to be low value and easily interchangeable?’

Furthermore, if the specification is clear and tender lists are open, a decision to award on price is unlikely to be challenged.

Showing committed spend that will be favoured by suppliers over uncertainty and promises of economies of scale and likely take-up, as well as taking advantage of fluctuating pricing and competition, procurement can evidence savings whilst then also concentrating on added value.

But a simple and efficient method is required that is also compliant and here-in lies the challenge…

This may sound like heresy, and it is certainly not what I would have proposed until a few years ago, but times have changed! How many of us are seriously thinking about large investments or projects – aren’t we more in need of just buying the basics and buying these requirements effectively at least?

Even if we are dealing with more complex procurements at the same time, should we not at least ensure the sector is redirecting skilled individuals onto these areas and make the consumables and commodity procurements as easy as possible?

Those complex procurements of frameworks for consumables take too long, cost too much, and suppliers will increasingly look to offer good deals to the buyer who keeps his costs down and can make quick decisions. In extremis, if you can’t make yourself more attractive, you may not find suppliers at all…

Martin Sykes FIMechE, FCIPS, FRSA was Chief Executive of the Welsh Assembly Government’s Value Wales unit from 2006 to 2010. Now, semi-retired, he undertakes various research and consultancy assignments.

He was previously Executive Director, Smarter Procurement at the Office of Government Commerce where he led the work on procurement policy, sustainable procurement, SMEs, capacity and competition in key markets, e-procurement, construction best practice and strategic supplier relations. Martin had previous public sector experience as Director of Supply Strategy and Estates at the Department of Social Security and as Commercial Director; at Transport & Local Government.

iESE Transform Issue 2

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Property investment

Unlocking your commercial property potential Cllr Pat Roberts reveals how Runnymede Borough Council is maximising its use of its commercial property to bring in further income, boost the local economy and transform the town.

With unprecedented cuts to budgets and increasing demand for public services, 2013 is going to be a very challenging year for local government as we all strive to balance the books and make even further savings.

However, it isn’t just about saving money, it is about making it. Communities Secretary, Eric Pickles, has already said that councils need to make better use of their property assets and I agree. However, many are already doing so and I believe we can all learn from them.

Across the country, the trend of councils investing in more commercial property in order to strengthen their financial gains and help boost local economic development is growing. The long-standing slump in the building trade has meant that some communities are still waiting for their planned revamped town centre developments as commercial partners, like everyone else, faced up to the economic down turn and scaled back on their investments.

Before now, this has been seen as a disaster for some areas. However, it can now open up a number

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of opportunities for councils, if they wish to seize the chance to buy at a lower rate, transform their communities, encourage businesses to relocate to state of the art buildings and most of all, reap in the financial benefits for council taxpayers.

‘By borrowing and investing in our own areas, we send out positive signals to companies that demonstrate our commitment to the economy and environment...’ Local government finance is becoming increasingly dependent on business rate income so supporting our local economies has become even more important.

By borrowing and investing in our own areas, we send out positive signals to companies that demonstrate

iESE Transform Issue 2

our commitment to the economy and environment and show that we are committed to our future generations – just look at the new Waitrose premises in Bracknell’s town centre or Basingstoke’s £200m regeneration project that includes a mix of new office space, a business class hotel and other supporting facilities. In my own area of Runnymede, we are playing our part in enhancing the quality of life for all of our residents and visitors.

We are investing to ensure the area continues to be an attractive place for those who already conduct their business in the Borough and to future prospective commercial companies to further improve our economic prosperity.

We are just embarking on the Addlestone town regeneration with the developers Bouygues and have the vision of bringing a tired town

iESE Transform Issue 2

into the 21st century with a mixed development of retail, leisure and residential use.

This will provide better retail and leisure facilities in the town for our residents and visitors and in turn boost our economy in the town.

The Council is also taking advantage of investment opportunities and we will have a stake in the new development to provide us with a valuable ongoing income stream.

Of course, ensuring you get the best deals available means you must have the right commercial property acumen and for some councils, that can be problematic. But it needn’t be.

It is simply another example of how we should all be looking to work with each other and share knowledge and experience. Mr Pickles highlighted recently that the ‘capital and asset pathfinder’

pilots have found that savings of around 20% are possible with a cross-public sector approach. If you have funds available it’s certainly something you should consider, if not now, but for the future.

‘Mr Pickles highlighted recently that the ‘capital and asset pathfinder’ pilots have found that savings of around 20% are possible with a cross-public sector approach.’

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News & Events

Latest news Celebrating public sector innovation and transformation iESE awards ceremony: Westminster, 6 March 2013

Transforming Local Services

Birmingham City Council (The England Illegal Money Lending Team)

Cornwall Fire & Rescue Service (Phoenix Project) London Borough of Tower Hamlets (Improving the public environment throughout the period of the Olympics)

For all of us in local government, living with and excelling in spite of financial pressures has become a way of life. Developing new ways of working, and transforming service delivery have become ‘just another day at the office’.

West Sussex County Council (Aspire Sussex)

Delivering through Efficiency

Fire Project of the Year

Up and down the country, councils are striving to do more for less to balance budgets whilst keeping their council taxpayers happy. Realising that salami slicing is no longer sustainable. Many more councils are seeking to totally reinvent the way services are delivered. With many more now thinking radically outside of the box to find news ways of keeping much relied upon services running and their council taxpayers happy. Against severe budget cuts, it is a testament to every one of them that not only are they managing to continue delivering much relied upon front line services, but many are also making significant efficiency savings and at the same time, making improvements.

Aylesbury Vale District Council (One Team, One Council)

Cheshire Fire and Rescue Service (Early intervention and prevention initiatives)

To showcase the willingness and desire to transform further in local public services from councils, police, fire authorities and their private and third sector partners, iESE is holding its fourth annual awards ceremony to celebrate innovation and efficiency from across the UK. Designed to demonstrate local government’s new ways of continuing to help change people’s lives for the better, the ceremony will provide a national stage that will allow best practice to be shared across the local government family.

This year’s awards, sponsored by Cable & Wireless and Vodaphone, received 165 outstanding nominations. After a vigorous, independently verified selection process, 27 public bodies have been shortlisted for nine awards, and a further award for inventiveness by the private sector:

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Connecting People

Surrey County Council (Prevention Through Partnership Programme)

Norwich City Council (Norwich City Council’s Improvement & Efficiency Journey)

West Sussex County Council (Aspire Sussex)

Cornwall Fire and Rescue Service (Phoenix Project)

Surrey County Council (Public Value Review Programme)

Gloucestershire Fire and Rescue Service (GFRS & SARA)

Transformation in Waste & Environment

Police Project of the Year

Oxfordshire County Council (MacIntyre’s ‘No Limits’) West London Alliance (Special Educational Needs Programme)

Avon & Somerset Constabulary (Faith Liaison Officer Programme) Metropolitan Police Service (Property Services Department – Environment & Sustainability Team)

Wigan, St. Helen’s and Warrington Councils (WWISH – Shared Adoption Service)

Trafford Council and Greater Manchester Police (Improved outcomes for residents, businesses and visitors through collaboration)

Council of the Year

Working Together

Essex County Council London Borough of Havering Surrey County Council

Reading Borough Council (Think Family: Future Families) The Royal Borough of Windsor and Maidenhead (Flexible Home Improvement Loans Ltd) Wigan, St. Helen’s and Warrington Councils (WWISH – Shared Adoption Service)

Events Wednesday 6th March 2013

Thursday 20th June 2013

Westminster, London (further regional events to follow)

London

Council 2018

Waste & Resources Partnership Forum

To find out more about any of these events, contact us at 01883 732 957

iESE Transform Issue 2

4 DIRECTORS 77% OF eWASTE CONVICTED FOR

ILLEGALLY

EXPORTED IN 2011 ILLEGAL EXPORT OF eWASTE

£325,000 FINE FOR HOSPITALWHICH

£500,000 MISTAKENLY SOLD DISC FOR BREACHING ON EBAY THE NEW MAXIMUM FINE

DATA PROTECTION ACT

EVIDENCE

IF CLEAR

Ignoring disposal risks could lead to hefty fines and possible conviction

WHAT ICTR CAN DO FOR YOU • • • • •

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 enquiries@iese.gov.uk or call 01883 732957 To find out more about ICTR please visit www.ictrefurb.com, call us on 0800 043 0103 or contact councils@ictrefurb.com.

Responsible refurbishment From eWaste to eValue

Personal Profile

iESE Introduces…

Personal Profile: Steve Coates CEO and Founder of ICTR

In 2011, 77% of the UK’s eWaste, including some from councils, was illegally exported to West Africa, leaving a devastating impact on lives and the environment. As Head of Strategic Development for a global energy company at the time, I was compelled into action after watching BBC Panorama’s “Track my Trash”.

ICT Refurbishment began as a Corporate Social Responsibility (CSR) initiative but very quickly became my own moral imperative to address the growing issues of eWaste and find new innovative ways of helping solve social deprivation.

The Government is tightening the rules to overcome illegal dumping abroad and councils are increasingly being asked to prove how they dispose of their eWaste. In June this year Brighten and Sussex University Hospital was fined £325,000 by the ICO when a computer they disposed of ended up on eBay; setting an example for all organisations of the importance of managing personal information securely during the disposal stage of the IT life cycle.

As well as adhering to these new rules, councils are also fighting social exclusion. Currently one in four UK adults have no home internet access, putting them at risk of being left behind as our everyday services enter the digital world and the new Universal Credit goes digital.

As a member of the Asset Disposal & Information Security Alliance (ADISA), ICTR is now supporting local authorities with their eWaste, whether it be end of life disposal or refurbishment that provides cheap computers to deprived communities.

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Our transparent reporting ensures they eradicate their risk of potential fines and litigation through our stringent adherence to the EU WEEE directive and the Data Protection Act. Councils also get the assurance that their computers will not end up in a digital graveyard in West Africa or elsewhere and that confidential data is not leaked and is disposed of in a controlled environment.

‘Currently one in four UK adults have no home internet access, putting them at risk of being left behind as our everyday services enter the digital world and the new Universal Credit goes digital.’

From collection by our dedicated and secure logistics team, to eradicating all data and re-testing and cleaning, we re-market wherever possible and return the current value back to councils whilst controlling the downstream recycling when an item cannot be reused. Generating additional cash flow for them, we are reducing their IT carbon footprint by as much as 40% and are supporting their social responsibility agenda. No longer should a three-year-old company computer, out of warranty, ever be regarded as eWaste.

With the support of ICTR, it has the potential to help: l a

parent to plug their home into the internet for the first time to enable their child to do their homework;

l an

elderly person to break free from the physical constraints of old age and stay in touch with the wider world; or

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young person to start their own business and change the world with their ideas.

ICTR has recently finished a pilot project with Eastbourne Borough Council where we provided, for the first time, full transparency of the decommissioning of their IT assets.

Their old computers will now be sold to the Get Online @ Home initiative that is led by Microsoft to provide affordable computers to all parts of society. This initiative is supporting the “Go On UK” digital inclusion programme being led by Martha Lane Fox. As well as councils, we are also working with The Princes Trust and The Bright Ideas Trust providing affordable computing to young entrepreneurs from disadvantaged backgrounds allowing them to become economically active.

Our ‘Sustainable IT for Schools’ Programme, recently launched in Wandsworth, also targets parents on low incomes to help them get their children online at home.

But this is just the start. I did not give up my career in the corporate world to fix a few computers! I gave it up to make a difference. ICTR exists to close the digital divide in the UK and provide all parts of society with affordable IT solutions to enable them to succeed.

iESE Transform Issue 1

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Be a part of…

TRANSFORM ISSUE 2

mmercial Unlocking co ntial te po ty er prop rts reveals Cllr Pat Robeede how Runnym the g are boostin y local econom

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 ground breaking money-saving solutions to almost any public service.

Cover Story

explains Martin Sykes naged how better mais vital nt me procure

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 enquiries@iese.gov.uk or call on 01883 732 957

www.iESE.gov.uk

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Waste Management Services Framework aims to save councils

£85m

In Figures

of savings

Care Funding Calculator has saved authorities

£63m

of councils registered to

www.socialcare. improvement efficiency.org.uk

£250m

Construction framework has made

£92m

% 31

% 95 of local authorities registered on

www.win.org.uk

T. 01883 732 957 E. enquiries@iese.gov.uk www.iese.gov.uk

iESE has generated over £250 million worth of efficiency savings over the last 5 years…