Enhancing online finance functions and providing strategic support to the Council
Removal of the Council’s legacy system SAP
An online portal for the Council’s 2,920 suppliers
A single view of debt across the Council
Barnet is a large London borough serving a population of around 356,400 residents. The finance service collects in excess of £110m worth of debt and process over
around 130,000 invoices every year from over 7,500 suppliers and other vendors.
In 2013, Capita began a 10 year partnership to support the Council’s new support and customer services (NSCSO). Under the NSCSO contract Capita and Barnet created the Customer Support Group (CSG) to deliver the Council’s back office services, including customer services, human resources and payroll, finance, IT, revenues, benefits, estates, corporate programmes and procurement.
The CSG partnership is part of the Council’s change programme, which aims to reduce back office costs and improve services to users.
Understanding the challenge
Before the CSG partnership was created, Barnet used the SAP system for financial processing and budget monitoring across the Council. Over recent years the functionality provided by the system was not sufficient to meet the Council’s requirements and needed significant investment in order to meet the Council’s evolving needs.
This was impacting on the efficiency of delivering the finance service. For example, budget forecasting and monitoring was generally undertaken via manual input spreadsheets, which were carried out at a local service level and limiting cross-council visibility. Key performance indicators (KPIs) were being met and performance was high, however these financial processes were heavily reliant on paper-based functions.
In addition, with the uncertainty of the economic climate and budgetary pressures, vacancies within the finance services were filled by shorter-term, interim roles – contributing to significant service running costs.
Therefore there was scope to enhance efficiency, reduce the cost and improve the way the finance service could support budget managers - right across the Council.
New finance system
On day one of the contract, Capita commenced the hugely complex programme to implement a new finance system, Integra, across the entire Council. This included the removal of the Council’s legacy system SAP and launching a new solution to bring greater automation and a culture shift across the Council.
Capita’s experienced transformation team worked alongside the finance function and budget managers within the individual workstreams to understand the current processes and requirements to run the service during this transition. A like-for-like system was developed in the new Integra system to ensure there were no gaps in service provision during the transition and the new Integra system was put in place.
The project had ambitious delivery timescales - originally a 12 month implementation process – but due to wider contractual delays, the completion dates were reduced to just nine months.
By April 2014, the finance system had been replaced both on time and without any disruption to service delivery. The new functionality means Barnet now carries out the majority of all finance processes online. Already there has been a 60% decrease in the time it takes to process invoices as well as reducing the cost and environmental impact of paper based processes. It has provided a platform for ongoing transformation, which will include the launch of:
- Online budget monitoring for budget managers - giving greater visibility of forecasting and performance and enabling more accurate strategic financial planning across the Council
- An online portal for the Council’s 2,920 suppliers
- Widening of automated process using the Integra system
- Functionality to provide a single view of debt across the Council
Within the first 12 months of the partnership with Barnet, a significant amount has been achieved. Barnet is already experiencing the benefits of greater automation, streamlined processes and new skills and resilience within the team. But crucially, these step changes provide a robust platform to deliver performance improvements, efficiencies and strong financial strategy for years to come.
Paul Thorogood, Assistant Director of Finance Capita and Barnet Partnership
The success of the project was based on successful cross-working with other Council functions. This included understanding requirements, providing training and shifting the working culture from using traditional processes to embracing new ways of working – all at a time when Barnet was undergoing significant transformation and changing operating models across all services in the CSG partnership.
As a result, the resource model within the finance service was redesigned to support these new ways of working. For example, now transactional finance administration is handled in the system, it has freed up finance managers to focus on and develop a more specialised business partner role that is designed to support budget holders with the finance management, planning and forecasting within their service areas. Ultimately by providing greater visibility on financial performance across the Council will inform future financial strategy more accurately.
Employees within the finance team are also being supported to develop these new skills. For example, in partnership with the Chartered Institute of Public Finance and Accountancy (CIPFA), Capita is providing joint training workshops in financial management and helping finance managers adopt a more consultancy-style approach.
Managers across the partnership are also being given the right skills to support the transformation. Working alongside Capita’s HR Managers Academy, the partnership is delivering comprehensive training, where 25% is dedicated to financial forecasting, system usage and financial strategy.
Efficient year end accounting
Despite the complexities of the transformation programme, Capita has also protected the business as usual service delivery, ensuring there is appropriate skills in place to maintain the high standards is achieved prior to service transfer. This approach was crucial in the submission and closing of the Council’s main statement of accounts. The interim reports had to be submitted to the auditors by January 2014 - just four months after the contract began and changes within the newly formed partnership added greater complexity to the development of the reports, including:
- Remodelling the financial profile of services under the new partnership
- Significant service delivery and resource changes within the pension administration, revenues, benefits and HR and payroll services
- Responding to the change to the Code of practice set by CIPFA for areas such as the accounting for the Collection Fund for Business Rates
- Agreeing Capita’s commercial treatment of the CSG and the Regeneration element of the contract over the next 10 years which would be reflected in the financial reporting
- Revaluing the Councils estate following the transfer of around 85% of assets to Capita
- Collating accurate information from the services at a time of major transformation and against short timescales
- The re-design, ambitious transformation timescales and culture change within the finance service
Despite these challenges, Capita successfully submitted Barnet’s interim reports in January and held monthly meetings with the auditors to implement their new code of practice. By May, Barnet were one of the only local authorities to submit and close their accounts. Crucially the statutory accounts didn’t require any financial adjustments, reflecting the accuracy of the reporting and resulted in a strong audit performance.