House of Commons Administration: Financial Plan 2013/14 to 2016/17, including draft Estimate for 2013/14 - Finance and Services Committee Contents


Appendix B: Savings Programme


1.  The work to deliver the remaining savings is being carried out in separate strands, each focusing on a different area of the business. The strands sit within three broad themes: harnessing technology, making better use of the estate and changing and simplifying the way we work (see figure 1 below). The remainder of this appendix explains the changes proposed, all of which underpin the financial plan presented in Appendix A. Members, their staff and staff of the House were consulted on outline plans for these strands in autumn 2011.

2.  The estimated annual savings and target net annual income from these plans amount to £20 million from 2014/15. As noted in the financial plan, this leaves a gap of £2.2 million if the target Estimate for 2014/15 of £210 million is to be achieved. This will be closed by driving out financial benefits from programmes and projects, by containing upward cost pressures and by reviewing further our non-cash costs.

Figure 1: Savings strand

STRAND 1: PRINT TO WEB

Estimated annual saving: £2 million

3.  The Print to Web (P2W) strand of the Savings Programme aims to redesign services relating to business papers and official publications so that they not only cost less but are also more effective. These changes capitalise on existing trends in the ways in which Members and others are choosing to access information on parliamentary proceedings, allowing, for instance, wider and more effective use of mobile devices. The interests of those who require printed copy will continue to be catered for by taking an incremental approach to change and by balancing the delivery method with demand.

4.  Between February and April 2012, Members were consulted on specific changes to the arrangements for publishing the House's business papers (each of the proposals, which together comprise the print to web package, is set out in table 1 below). Every Member of the House was invited by an email from the Chairman of the Finance and Services Committee to comment on specific proposals and, a month or so later, subscribers to the Hansard Bound Volume Service and the Weekly Edition of Hansard were invited to comment on the changes proposed to those services by letter. The proposals were also presented to the Liaison Committee, the Administration Committee and the Chairman of the Procedure Committee.

Table 1: The package of print to web proposals
Change When Expected saving Notes
1Ending the hard back Hansard bound volume service, including provision to Members, for all but reference and archival purposes 2012/13

Expected savings assume ending with the last volume of the 2010-12 session

£715,000 in 2012/13, rising to £970,000 a year by 2013/14 Library volumes will be available to Members for reference. Individual Members will have option to purchase personal copies at a discount of 20% from the public cover price.
2No longer binding Hansard daily parts into a soft back Hansard weekly volume 2012/13

Expected saving reflects halting the service at the end of 2010-12 session

£158,000 on 2012/13, rising to £189,000 a year by 2013/14 Specially designed box files to make storage and retrieval of daily parts easier to be available to Members from the Vote Office
3 Publishing Select Committee oral evidence electronically 2014/15 £470,000 a year Better delivery, functionality, presentation and indexing of digital alternatives prior to 2014/15; provision of print on request service
4 Reorganising and reducing the frequency with which some sections of the Order Paper relating to Future Business are printed 2014/15 £112,000 a year Updating on line at least as often as now. Better delivery, functionality, presentation and indexing of digital alternatives prior to 2014/15
5 Not printing written answers to Parliamentary Questions in daily Hansard 2014/15 £300,000 a year On line and other digital versions published overnight or faster prior to change
6 Reducing expenditure on purchasing Government publications On going from 2011/12 Additional reductions of £51,000 in 2012/13, rising to £126,000 a year by 2013/14 Improved access to on line and other digital versions complemented by on request printing

5.  The Finance and Services Committee considered carefully the points raised by those few Members who told the Committee that they would regret the provision of Hansard Bound Volumes being ended. The Committee was sensitive to the views of those who value these volumes as a testament to their time in Parliament or as a physical demonstration of the dignity of Parliament. It is because the force of these arguments is recognised that Members who wish to continue to receive Bound Volumes will be able to do so, and at a discount from the public price. But, in recommending the changes in table 1 above, the Committee weighed these concerns against other factors.

6.  The Finance and Services Committee therefore recommended to the Commission that changes to printing, publishing and purchasing arrangements be made as set out in table 1 provided that:

  • Where relevant enhancements to the digital version of a publication are in place prior to changes in printing arrangements being made;
  • confidence remains high that the estimated savings will be realised by the change;
  • where printed versions of publications are weekly, the aim should be that each is published in print on the same day of the week; and
  • the print to web strand of the Savings Programme continues to address the concerns of those Members who do not favour a particular change where to do so is consistent with the overall aim of redesigning printing and publication services so that they not only cost less but are also more effective.

7.  The Commission agreed the package of changes in June 2012.[7]

STRAND 2: ICT STRATEGY

Estimated annual saving: £3 million

8.  Parliament's new strategy for information and communications technology (ICT) will enable Members and staff to access information and communications at speed, at any time of day, from any location and on the move. Devices that facilitate these new more mobile ways of working are entering the market all the time, and the ICT strategy responds to people wanting the flexibility to be able to use a wider range of devices. The strategy also seeks to exploit the rapid advances in 'cloud computing' whilst meeting Parliament's security requirements. Cloud computing can be described as the ability to access services and products via the internet, reducing the need for infrastructure on site. The ICT strategy aims to use these developments to improve flexibility and choice whilst transforming PICT and reducing costs. Work in this area applies to the House of Commons and House of Lords, as ICT services are provided by PICT as a joint department.

9.  A saving of £800,000 a year has already been achieved by reducing the requirement for contractor and specialist support, decommissioning legacy systems and some restructuring within PICT. This contributes to an overall savings target of £3 million (House of Commons share). Pending a decision on the business case for cloud computing in January 2013, a further £2.4 million of savings is projected to be achieved by 2014/15.

10.  The implications for users of implementing Parliament's ICT strategy are explained in table 2 below:

Table 2: Implications of ICT strategy for users
Better customer service
1PICT Local, Commons Members Centre and x2001 service will still be provided.
2Members of the two Houses and their staff, as well as an increased proportion of Administration staff, will be able to choose the mix of equipment that suits their way of working including using their own devices instead of taking PICT provided devices.
3Users will be able to print on demand but overall there will be less printing and a rationalised portfolio of printers.
4Users will be able to access PICT's services online via a PICT service portal, which will offer users fast access to information about the services they have / can have from PICT in a single consolidated personalised view. The online PICT service portal will provide users with a single gateway to all PICT services, and allow them to interact with PICT's advisers through live feed or chat, and search a knowledge base through a user-friendly site.
Improved access to services
5Email will be provided by a cloud-based supplier, if the business case is approved by the two Houses in January 2013. If approved, 100% of email services will be cloud-hosted.
6Wireless internet will be available everywhere across the Parliamentary Estate.
7By April 2014 Members, their staff and House staff will be able to connect to the information and services they need from anywhere at any time and from any device.
8The shift towards cloud hosting will be greater than 80/20 in favour of the cloud, meaning fewer than 20% of Parliament's ICT services will be hosted on the premises.
9Office productivity tools (applications for viewing, creating and modifying general documents, such as spreadsheets, presentations, letters etc) will be cloud-hosted along with the associated file storage.
10Users will be able to launch their applications from any device via an online application portal.
11PICT will have the capability to integrate and consolidate data and applications using a common proven architecture, improving the availability, reliability and accuracy of data and reducing the length and cost of projects involving ICT that use those data and applications.
12There will be no customisation of non-bespoke applications.
13Voice over internet protocol (VoIP) may have replaced analogue reducing communication costs and increasing the flexibility of devices users can use to make calls and send messages.
Transformed PICT
14PICT will have increased ICT security and will operate a new set of ICT security standards and policies.
15PICT staff will have an increased understanding of Parliament and of its users.
Reduced costs
16From 2014/15 PICT will deliver £3 million of savings from its annual resource budget (House of Commons share).
17A significant proportion of those savings will come from reducing the number of posts in PICT, some of which have already been made by voluntary exit schemes.

STRAND 3: INCOME GENERATION

Target net annual income: £3 million

11.  For many years the House has carried out revenue raising activities notably through catering, retail and visitor services. These have been expanding in recent years, for example through Saturday opening for visitors.

12.  At its meeting in July 2012, the House of Commons Commission considered the Administration Committee's Report on Visitor Access and Facilities (HC 13 2012-13). The Commission agreed that there should be a clearer separation between Parliament as a working body and Parliament as a visitor attraction and agreed that the financial plans should be based on developing a number of activities for the House to operate more commercially as a visitor attraction. The issue of income generation was aired in the debate on the floor of the House on 15 March 2012 (HC Deb, cc400-430) on the question of charging for Clock [Elizabeth] Tower tours. The Administration Committee's report was debated in Westminster Hall on 4 September 2012.

13.  Three guiding principles have underpinned the development of the plans:

  • Parliament is a working institution and income generation must not impede Members of Parliament in carrying out their duties;
  • Citizens have a right to engage with Members and with parliamentary business without charge;
  • The Houses of Parliament are one of Britain's leading visitor attractions and have the potential to raise revenue to reduce costs that would otherwise fall on the taxpayer.

14.  The plans are as follows, for which the target net annual income is £3 million from 2014/15:

a)  To open for commercial tours during all recesses, on non-sitting Fridays and on Bank Holidays and Sundays between April and October;

b)  To open for an extra hour on each commercial day of opening;

c)  To increase the range and frequency of specialist tours;

d)  To introduce a tiered visitor admission offer including a short tour of Westminster Hall, an audio-guided tour and a premium tour with a guide;

e)  To relocate the St Stephen's Shop to the Westminster Hall area;

f)  To relocate the bookshop to a new retail unit at 49/50 Parliament Street;

g)  To introduce an online retail facility;

h)  To develop the range of guidebooks etc offered for sale;

i)  To develop filming possibilities in the Elizabeth Tower;

j)  To offer afternoon teas to those taking tours;

k)  To offer the Atrium in Portcullis House, the dining rooms in the Palace of Westminster, the Pugin Room, the Jubilee Room and the Terrace Pavilion for commercial hire on an experimental basis for two years on a limited number of occasions when they are not expected to be used by Members.

In addition, the Commission agreed to establish or work with an existing small scale charitable body to raise funds to support the advancement of public information and access to the history of UK parliamentary democracy and its processes.

15.  The proposals have been subject to further financial analysis by officials to assess whether each one would generate a net income for the House. Any proposition that fails at the least to break even will not be implemented. These assessments indicate that opening on Sundays and Bank Holidays will not be implemented initially, until and unless more cost-effective ways of operating can be found.

16.  Preliminary assessments of the security, works, heritage and equality implications have been carried out. On security, works and heritage issues, the existing arrangements in place already cater for large numbers of visitors to the Estate. The main impact of these proposals is the need to cover the additional costs associated with the provision of additional services which generate income. In relation to safety and security this means the costs of additional personnel. In relation to works and heritage it means taking into account additional wear and tear on the fabric of the buildings and also the impact on the timing of work given the flow of visitors. In relation to equality, the expansion of the visitor offer to date has already been accompanied by improvements in the diversity of services available. These proposals provide further opportunities to provide a wider range of offerings to visitors catering for diverse audiences. Opportunities include availability of information in different formats, improved signage and a wider range of times and dates on which visiting is possible. Equality analysis will be carried out for each project as part of planning and implementation. This will include both the impact on visitors and those working in the House.

STRAND 4: ESTATE

Annual saving (already factored into 2012/13 Estimate): £1.9 million

17.  The aim of the Estate strand is mainly to reduce the overall footprint of the space occupied by the House of Commons while still allowing refurbishments to take place. The strand has already delivered its main contribution, which was to relinquish the leases of 4 Millbank and 2 The Abbey Garden, achieving a full-year annual saving of £1.9 million from 2013/14. Other areas where savings are being investigated include:

  • Savings from more efficient use of energy and storage space;
  • Exploring whether savings can be made if 7 Millbank reception/security arrangements can be rationalised (subject to security requirements);
  • Exploring longer term savings arising from more efficient use of space in line with the agreed accommodation policy, or from buildings being partially closed out of hours.

STRAND 5: MARKET TESTING

Estimated annual saving: £2.5 million

18.  The aim of the market testing strand is to identify improvements to services while making savings in areas where outside comparators are available. Four areas were identified for examination: print services, cleaning, catering (which had already been recommended in the Administration Committee's catering inquiry);[8] and reception services (attendants and office keepers).

19.  A detailed plan for making business improvements internally has been developed for each of these four areas, market research has been conducted and the risks and benefits of market testing have been examined. The Commission will be asked to decide in December 2012 whether or not to proceed to a full market test in any of the four areas. The alternatives to a market test are to do nothing (not an attractive proposition in any area), or to implement cost and service improvements to the in-house service that satisfy the requirements of the House. The test to be applied in making this decision is: can this service be improved to such an extent that, according to our market research, it would be broadly comparable with what the market could offer in terms of price, whilst maintaining or improving the quality?

Print services

20.  The strong dependencies of the House's print services with other initiatives (notably the print to web strand, and the requirement to review and retender the printing contract in 2016) mean that a market test could not sensibly be conducted in the immediate future. The Management Board will therefore be recommending that print services should not be market tested but that in-house improvements should be made which more closely align the capacity of the service with the demand. Proposed changes would include bringing the closing time forward in line with House sitting hours, centralising the operation to a single location and expanding the services to include scanning/digitisation primarily during recess periods when machines and staff are less busy. If agreed by the Commission, the changes would be implemented as an efficiency programme, on the understanding that print services will be reconsidered in the round in 2015.

Cleaning

21.  The majority of cleaning is already contracted out. The contract is due to be re-let in summer 2013. This offers an important opportunity to sharpen the output focus and delivery standard of this work and achieve savings through appropriate commercial mechanisms. The emphasis will be on payment for results. An external facilities management specialist, with strong support from our own conservation architects, has advised that we retain an in-house team specialised in cleaning rooms and offices in the heritage areas of the Palace. The Cleaning Business Improvement Plan recommends therefore that we reduce the numbers of our own staff by not renewing existing fixed term employment contracts, and train those remaining for this specialist purpose. All cleaning in the outbuildings, including Members' offices in those buildings, would be undertaken by cleaners working under contract, as would clearly delineated areas of the Palace, including the lavatories.

Catering

22.  The internal business improvement plan for catering offers significant savings and service improvements. The plan involves the transition to a smaller core team that is supported by a pool of highly trained casual staff who can be called upon to meet the fluctuating demands that are inherent in any catering operation, but particularly at the House of Commons. These changes can be delivered over the next year, to meet the target date for the savings programme.

23.  Wide-ranging market research has been conducted. The various companies that were approached noted the broad range of catering services that are supplied at the House; the severe fluctuations in customer demand over the course of the year, and within any given week; and the reputational risk of being so closely in the political eye.

24.  One option that has been considered is offering some or all of the Portcullis House Atrium services to a commercial operator. This idea has been put forward by a number of Members. Industry has not expressed enthusiasm largely given the demand variability. Industry contacts also expressed some surprise that we would consider outsourcing only our most successful outlets.

25.  Taking all these factors into account, the Management Board will be recommending that catering services remain in-house on the strict condition that the in-house improvement plan is fully implemented.

Office Keepers and Attendants

26.  The internal improvement plan in this area is largely concerned with eliminating structural and process inefficiencies. It does offer some service improvements, not least in emphasising the role of Office Keepers as managers responsible for ensuring cleaning and maintenance standards in their respective areas. It also provides a more flexible, skilled and visible workforce, but in some places Members will notice a reduction in Attendant presence.

27.  The arguments for and against a market test in this function are much the same as for catering. The Management Board will therefore be recommending that the in-house improvement plan is accepted with no market test.

STRAND 6: OPERATIONS

Estimated annual saving: £9 million

28.  The aim of the Operations strand is to challenge departments to review budgets and processes to achieve simpler, more economical and more rewarding ways of working. Departments have identified ways of delivering a further 10% from those parts of their budgets not within the scope of one of the other savings strands (referred to as the "10% challenge" in this section), amounting to an estimated annual saving of £9 million.

29.  The savings fall into three main categories, as summarised below. The specific items of most relevance to Members are listed in table 3. Type of saving:

  • The largest number derive from items which can deliver savings without any noticeable effect on service delivery or staffing and are able to be reflected in budgets immediately. For example, departments have taken a critical look at their cash allocation against their expenditure trends and have identified areas of underspend where budgets can be shaved without undue risk to delivery of services. Departments have looked also at opportunities to reduce budgets for items such as staff travel and subsistence, training and consultancy and office supplies, and by more effective procurement across a whole range of goods and services. They have looked also at squeezing more from existing income sources such as rent receipts for the shops in Bridge Street.
  • Further savings come from areas where some, mainly back-office, changes will need to be put into place to generate the savings. These are currently being pursued with the relevant staff. Examples would be reductions in posts arising from changes to working practices that are already in train, process reviews designed to streamline services, or posts that can be saved as a result of minor office reorganisations. These items require consultation with the teams affected and/or the House's Trade Union Side (TUS) but do not generally affect services to Member.

30.  A very small number of the Operations proposals, amounting to some £1 million out of £9 million, come from areas which may be of interest to or potentially have some effect on Members. They are listed below and will be implemented subject to the views of Members, including through relevant Committees:

Table 3: Operations proposals—items on which Members' views are sought
Department Description Estimated annual saving by 2014/15 (£000)
1Information Services Changes to front desk staffing in Members' Centre, Portcullis House

The aim is to provide one reception service on the ground floor of the Portcullis House Atrium by consolidating the Attendants reception and the Members' Centre reception, and so reducing the total staffing required. This is contingent on changes in the reconfiguration of the ground floor area in Portcullis House, endorsed by the Administration Committee.

93
2Information Services 10% cut in works of art maintenance and conservation budget

The aim will be to ensure that no essential work is postponed, but some less urgent work may need to be deferred. The proposal will be discussed with the Works of Art Committees in both Houses.

15
3Information Services Improving coordination within Library research sections and POST

There is scope for better co-ordination on science and technology issues between POST and the Library which would mitigate any reduction in services to Members. The saving represents around 1.4% of the combined Library research and POST budget and would mean some savings in staff and/or non-staff costs.

98
4Information Services Recent switch to new provider for online news aggregation service

The change from Factiva to the Lexis Nexis online news service and the ending of the Enterprise Agreement for provision of the FT online were both endorsed by the Administration Committee before the changes were implemented. In both cases, the savings delivered were as a consequence of broader decisions, rather than savings being the key driver: Lexis Nexis won the contract for the provision of online news as a result of a competitive retendering process but they do not distribute the Times who have an exclusive contract with Factiva. The decision to end the FT agreement was caused by the FT raising their subscription price to a level that was unaffordable within the Library's budget.

115
5Chamber and Committee Services Improved management of the budget for select committee specialist advisers, alongside other means of specialist support for select committees, to reduce expenditure incurred on their fees and expenses by 10%. 31
6Chamber and Committee Services Committee office—web-based evidence

Introduction of a system whereby witnesses submit written evidence to select committees on a standard template through a web-based portal, with a consequential reduction in the requirement for sub-editing evidence for publication, saving the equivalent of up to 6 posts (to be achieved through natural wastage). This change also creates an opportunity to increase job satisfaction and interest for staff handling written and oral evidence.

215
7Chamber and Committee Services Ending of hard copy printing of evidence submitted to select committees (over and above the target reduction in such printing to 20% of current levels already envisaged as part of the Print to Web savings strand) and ending of proofing and formatting as virtual volumes. Such evidence will remain available and accessible online. 386
8Facilities 10% reduction in maintenance overtime costs

This may involve more maintenance being done in working hours—carrying out maintenance work during silent hours is expensive because staff time is paid at overtime rates. Noisy and disruptive work will always need to be done at weekends and when the House is not sitting but if more non-disruptive routine tasks were carried out during the working day, it is estimated that an annual saving of £21,000 could be made to the overtime budget. There would be some effect on the timing of work but this would not be allowed seriously to disrupt the service to Members and others on the parliamentary Estate. This item is dependent on a current review of the Parliamentary Estates Directorate.

21
9Facilities 5% reduction in the budget for discretionary maintenance and 10% in the budget for furnishing items.

The discretionary maintenance budget covers minor requests for improvements or enhancements to facilities across the parliamentary Estate. It covers items such as redecorating of small areas but not essential maintenance such as the replacement of light bulbs or urgent repairs. The discretionary furnishing budget covers maintenance of furniture and furnishings and requests for additional small furniture items such as shelving and notice boards.

A 5% reduction in the maintenance budget and a 10% reduction in furnishings may mean that the very lowest priority requests have to be met in other ways or have to await the availability of funds. But this would not be allowed seriously to disrupt the service to Members and others on the parliamentary Estate and would make an annual saving of £60,000. This item is dependent on a current review of the Parliamentary Estates Directorate.

60
10Human Resources and Change Encouraging online travel office bookings

The Parliamentary Travel Office is run by Hillgate Travel, who provide both Houses with a face-to-face booking service and an online booking portal. Two-thirds of the cost of the service is for staff, and this element should fall as more bookings are made online through the portal. It will thus be cost-effective to encourage greater use of the portal for single point-to-point journeys, such as London-Edinburgh/Glasgow/Belfast (Easy Jet was added to the portal this autumn). There are no plans to withdraw the face-to-face service.

100

STRAND 7: STAFF AND CULTURE

31.  The savings programme will result in a leaner organisation, with some different and more flexible ways of working. Some reductions in staff numbers have already been made, through two voluntary exit schemes, one in 2011 and the second in 2012. A total of 107 staff have left through those schemes. The Management Board has also decided that the numbers and costs of the Senior Commons Structure should be reduced by up to 15% by 2014/15. This means further reducing SCS numbers in the House of Commons and PICT from 88 posts (as at 1 April 2010) to 75. So far SCS numbers have reduced by a net of eight, with the remaining reduction being on track as fixed term posts come to an end.

32.  The implications and opportunities for House of Commons staff will be considerable, with new ways of working, new organisational structures, fewer staff and new skills all being possibilities. The aim is to ensure that the House of Commons Service remains an attractive career choice for capable and motivated people from all backgrounds, and that we continue to develop skills and opportunities for the longer term. This all requires careful change management and HR leadership which is being taken forward through a further strand of work entitled staff and culture. The Trade Union Side have been kept informed of developments and are being consulted as plans develop. Equality impact assessments are being conducted on savings proposals and action plans will be developed as required.

House of Lords

33.  The House of Lords has its own financial strategy agreed by its House Committee in 2010, with the following target: "We will aim not to increase our resource costs in real terms throughout the period of the plan, despite the increased size of the House, and will reduce them where possible by reviewing what we do and how we do it." There is no House of Lords Savings Programme but the House of Commons Savings Programme is bicameral to a significant extent, with every strand involving shared services to some degree. House of Commons officials are working closely with officials from the House of Lords.


7   See Commission decisions, 25 June 2012: http://www.parliament.uk/mps-lords-and-offices/offices/commons/house-of-commons-commission/minutes/decisions-2012/hcc-250612/ Back

8   Catering and Retail Services in the House of Commons, HC560 2010-12 Back


 
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Prepared 29 October 2012