At a time of increasing pressure on constrained public budgets, it is clearly essential that public sector organisations maximise efficiency and provide assurance to the public and to other stakeholders that they are minimising their running costs.
This high level report compares data, including costings for a range of corporate services across 43 organisations in the Scottish public sector in respect of 2009/10 (up from 34 organisations in 2008/09). Annex A contains details about participating organisations.
The data presented is based on indicators and definitions broadly drawn from the UK Audit Agencies' Value for Money indicators, to facilitate cross sector and wider UK benchmarking. The purpose of our work is to provide information to enable management teams to scrutinise their own organisations' performance with a view to improving efficiency. Some of the indicators have been refined to ensure better comparability among participating organisations in Scotland.
Data was collected across six corporate services: Human Resources (HR), Information Communication Technology (ICT), Estates, Finance, Legal and Communications. Legal and Communications data has been collected for the first time in respect of 2009/10, on a pilot basis. It was agreed from the outset that the results of the pilot should be published only when the indicators are sufficiently refined to provide comparable and reliable results. The project team judges that this point has not yet been reached and consequently the published report does not include results in respect of Legal and Communications services. The intention will be to publish results on these services for 2010/11. Information on the performance of procurement services is not included because this is already covered by cross-Scotland benchmarking work undertaken by the Scottish Government Procurement Directorate.
Different organisations have different business models, provide different services for sound business reasons, demonstrate different levels of complexities, and vary in size and geographical spread. Some corporate services are shared between bodies, or provided on a common services basis.
As well as placing in the public domain valuable information about relative performance, the use of benchmarking processes and information by peer groups has the potential to add value by supporting discussions and analysis of improvement action plans developed in the workshop sessions, that are at the heart of benchmarking. The opportunities to understand better the cost drivers within organisations and to further improve efficiency will provide most value for taxpayers in the longer term. Because the data collected and reported here is quantitative, it does not provide context about the extent or quality of services delivered - for example, the fact that costs of maintaining historic public buildings such as art galleries is much higher than for modern office space. Simple comparisons across organisations need to be interpreted with this in mind and may not of themselves provide a basis for assessing relative performance.
Quality of data
The challenge of gathering information that is accurate and consistent over time remains. The 2009/10 data is more robust than in previous years for Estates, Finance, ICT and HR services, because of greater understanding of the indicators and their definitions and more consultation about indicators with the organisations participating. Future data will be improved as the process improves.
Significant problems remain in making fully effective comparisons between organisations. There are three principal reasons for this:
1. data collection is often a manual process with significant human intervention rather than automated extracts of audited data. Consequently there is limited opportunity for formal quality assurance.
2. reporting and control arrangements within organisations are not standard and this hinders meaningful comparisons across the Scottish Government family. Work to rectify this is still under way.
3. a number of indicators have been amended and definitions refined from previous years - so time series comparisons may not be possible.
The different size, natures, functions and operating models of the participating organisations also impacts on the comparability of the data in some instances. Consequently the guidance used to generate the data presented in this report remains under development. But it is important in the interests of accountability and transparency that this report is published.
Where corporate services are provided on a shared basis, this can have a significant impact on costs. To get a better understanding of the extent and impact of shared services, each organisation was asked to describe the extent to which they received or supplied shared services in respect of the relevant functions. A list of organisations and the services being shared are included in Annex C.
In order to take benchmarking forward the following steps are under way:
- Publication and circulation of the 2009-10 report
- Peer group analysis and discussion of the data.
- Themed workshops to discuss areas where further improvement in performance and increasing efficiencies can be achieved.
- Developing the indicators further for Legal and Communications services.
- Ensure all bodies have mechanisms in place to lead to measurable improvements for their benchmark costs linking to Best Value, Public Service Reform Act and where possible shared services.
- Development of a data validation process to ensure consistency of data.