Business consultants will be employed by Cheshire East Council at an estimated cost of up to £480,000 to advice them on how to 'transform for financial sustainability'.
Cheshire East Council has announced it is set to transform the whole organisation with a programme of work to become financially stable.
The council has set out the case for transforming the organisation and the way it delivers services to reduce the forecast funding gap of £100m over the next 4 years. This includes the procurement of a transformation partner – an organisation to bring additional transformation expertise and capacity to support the programme.
The estimated cost of up to £480,000 is for hiring a team of consultants, probably involving Microsoft and AI experts as well as change management specialists.
Councillor Mark Goldsmith explained "The reason we have to use consultants is because we need to:
- Move very quickly to meet government deadlines and make savings asap.
- We are already under staffed, so don't have spare capacity for this big task.
- The project is for a limited time, so we need to hire people on a contract basis.
- The council does not have the experience needed to implement such widespread changes involving new technologies."
Cheshire East has received a grant award from the Local Government Association (LGA) for £105,000 to support the transformation programme but further funding will be needed for this programme of activity. Phase 1 will require as much as £350,000 to be transferred from reserves.
Rob Polkinghorne, chief executive said: "Transformation will initially focus on financial recovery before moving on to service redesign in the longer term. We need to invest in capacity to change in order to deliver future savings and efficiencies – but any external partner will be required to identify savings that far exceed their costs.
"Work to prepare for and inform the transformation programme is already underway. The Local Government Association (LGA) is supporting with a corporate peer review and a review of organisational leadership capacity and structure. The council has also received grant funding of £105,000 from the LGA to support our transformation work, although we will need to use reserves to fully fund investment in the programme.*
"We will be looking to take full advantage of digital solutions, ensuring that support is accessible and that our workforce is flexible with the right skills to work effectively within a transformed council."
Councillor Sam Corcoran, leader of the council and chair of Cheshire East Council's corporate policy committee, said: "Inflation peaked at over 10 percent, but council tax only increased by 4.99 percent. In addition to the rising costs of services, the demands on social care for children and adults has increased. These factors affect councils across the country.
"Many councils are facing funding pressures. Due to its low level of reserves, Cheshire East Council needs to move at pace to address the funding-gap.
"The exceptional financial support, agreed in principle by government, does not provide any additional cash or funding. It enables the council to spread the cost of immediate pressures, up to £17.6m, freeing up reserves and reducing the imminent risk of a Section114 (S114) notice. However, this would come with additional costs in interest payments, so we would want to avoid using that facility if at all possible.
"Uncertainty about future government funding and the existing financial pressures continue to present a significant challenge. We must continue with our established in-year spending controls and ensure timely delivery of the changes set out in the MTFS. In addition, the council must transform to improve financial sustainability and to ensure we can continue to deliver our priorities, services and support for Cheshire East residents."
