Productivity Plan

On 16 April 2024, the then Minister for Local Government, Simon Hoare MP wrote to all local authority chief executives. He reminded them that the government was undertaking a review of productivity across the whole of the public sector. The recent Local Government Finance Settlement announced that councils would be asked to produce productivity plans.

This began the formal process for the productivity plans. The Minister asked for the plans to be overseen and endorsed by an elected member ahead of being submitted, by 19 July 2024, to the Department for Levelling Up, Housing and Communities (DLUHC). The plans should be published on the Council's website for residents.

Here is the published plan that has been agreed and submitted.

1. Introduction to RBKC

1.1  Kensington and Chelsea (RBKC) is a unique and diverse central London borough, which is rich in culture and heritage. With a population of almost 146,000 residents, the borough is home to residents of over 50 different nationalities who speak over 80 languages.

1.2  The Council employs 2,670 staff (2,549 FTE), including those working for shared services.

1.3  The Council operates several shared services with Westminster City Council (WCC) in respect of Adult Social Care, Public Health, Children’s Services. Tri-Borough arrangements with WCC and the London Borough of Hammersmith and Fulham are still in place for some services: hospital discharge, audit, risk, fraud and insurance, fostering and adoption, pensions and Treasury.

1.4  In June 2017 the Borough experienced the Grenfell tragedy, where 72 people lost their lives.

1.5  As a result of this tragedy we have been and are still on a journey to become the best we can for our residents, with a commitment to create a borough that is greener, safer and fairer.

1.6  RBKC like all London boroughs has had to become more productive and more efficient following a period of significant reductions to funding. Since 2010/11 it is estimated that London boroughs’ Core Spending Power has reduced by £2.2bn (20%) in real terms from £11.1bn to £8.8bn in 2024/25. During this time Kensington and Chelsea’s core spending power has reduced in real terms from £281.1m to £201.4m - a 21% reduction - while the population has only reduced by 9%.

1.7  Kensington and Chelsea, like all other councils has taken on additional duties in recent years including:

• the localisation of council tax support in 2013
• the transfer of public health duties in 2013
• duties resulting from the Homeless Reduction Act 2017
• duties resulting from the 2014 Children & Families Act
• changes to Youth Justice and Health policy that impact children’s social care, adding additional responsibilities and unfunded burdens.

1.8  Employee numbers have had to significantly reduce as a result of these funding reductions and we now employ 30% less staff than in 2010.

2. Introduction to productivity plan

2.1  This productivity plan has been developed following the request by DLUHC and the then Minister for Local Government Simon Hoare MP as part of the 2024/25 Local Government Finance Settlement.

2.2  Kensington and Chelsea will always be inextricably linked with the Grenfell tragedy, which has forever marked the borough, our communities, and the Council. Our commitment is to ensure it is never forgotten and to play our part in ensuring nothing like it happens again.

We will continue to work with our partners to provide dedicated support to bereaved and survivors and those most affected in the local community, mindful of the important milestones to come, including the conclusion of the Grenfell Tower Inquiry, decisions about the site, the memorial and the ongoing fight for justice.

2.3  Bereaved families, survivors, and residents have challenged the Council to use the learning from the tragedy to change for the better, becoming the best council for all our residents, whether they were directly affected by Grenfell or not.

In accepting this challenge, the Council is clear that there is a long way to go, and we will work with our communities to define what this means and check on our progress.

3. The plan

Guidance for productivity plans was to consider four key themes and so this plan has been set out in the same format:

3.1  How we have Transformed the way we deliver services to make better use of resources.

3.1.1  RBKC has transformed the way it delivers services and has a number of shared services with Westminster City Council (WCC) and the London Borough of Hammersmith and Fulham (LBFH). The key shared services with WCC are adults and children's services where boroughs share staffing and management structures. With LBHF we also share pensions and Treasury services along with audit, insurance and risk functions.

3.1.2  In March 2023 the Council launched a new Council Plan which set out an ambitious agenda to becoming the best Council for a borough that is greener, safer and fairer. To do this we need to deliver services in a more efficient way to those who need them the most. Development of the plan was undertaken with over a thousand of the borough’s residents and bereaved families and survivors of the of the Grenfell tragedy.

The commitments in the plan reflect what we heard and in particular how people want the Council to transform in to one that listens, understands the issues residents face, communicates clearly with them whilst treating all residents with respect and dignity regardless of their background.

3.1.3  Alongside the Council Plan is a Council Plan Action Plan which gives an overview on what we will do to deliver the Council Plan over two years, highlighting the key things that we will be delivered in that time. The action plan is part of our continued effort to share our progress on implanting change and delivering on what matters to our residents, whilst giving residents and other stakeholders information and a way of monitoring progress and impact.

3.1.4  The Customer Access Programme has been put in place to deliver the Customer Access Strategy and is the fundamental programme for changing how we work with residents across the Council. It underpins our work to deliver the Council Plan’s ambition to be a ‘caring’ Council.

Highlights and progress to date include delivering a co-produced set of resident facing service standards accompanied by training, guidance, and support for staff across the Council to adopt them.

During 2022 and 2023 we worked with a group of local residents to co-design a set of service standards that will ensure residents receive the best possible service from the council, and how we will measure if the service standards are succeeding. The service standards are segmented in to three parts:

• how residents want to feel when they contact the Council
• what the Council needs to do to achieve that
• what staff and services need to do.

3.1.5  There is significant investment and improvement work underway across the Housing and Social Investment Directorate, particularly in Housing Management. Resident experience during this transformation is improving but remains mixed.

A significant capital investment into the housing stock and full-scale change of culture in how residents are treated is underway, with recognised improvements in safety a key highlight.

3.1.6  Improving the public realm, ensuring residents can enjoy clean streets, well-functioning high streets, and safer neighbourhoods are very important to our residents. Here transformation has included the CREST review which has brought together all of the Council’s enforcement services into one place, delivering more efficient and effective services.

This has also now evolved into the Council’s new Street Enforcement Team which works across the borough to tackle environmental crimes and anti-social behaviour and also works with community partners to support the Councils activity in this area.

3.1.7  The implementation of Oracle is underway, which will upgrade and improve the system and processes the Council needs to deliver its core business.

This new system will help ensure the Council can deliver HR, Finance, and business analysis processes more effectively and efficiently, creating the framework for high-quality front-line service delivery.

3.1.8  Effective partnership working with public, voluntary and community groups to maximise the impact and reach of services delivered by the Council and our partner organisations, including extensive partnership working with the NHS, GLA, and local Voluntary and Community Sector organisations continues.

3.1.9  In July 2023, the Council published its Medium Term Financial Strategy which set out an update on the three year financial position and the framework for spending plans in line with the new Council Plan that was approved by Full Council in March 2023. At that time, we forecast a budget shortfall of between £3.7m and £4.4m depending on certain assumptions in 2024/25 and then an overall shortfall of between £32m and £42m for the period 2024/25 to 2027/28.

In February 2024 the Council set and approved a balanced budget for 2024/25 with a budget gap over the medium term (2025/26 to 2027/28) of between £18m and £32m. To close this gap we have embarked on a Transformation journey that will help support the Council’s aspiration to become the best in the light of Grenfell and address the medium term financial challenges.

A report on our Savings and Transformation Programme was presented to Overview and Scrutiny Committee in March 2024. 

3.1.10  This report details the four areas of transformation being considered:

Staffing
High level analysis has shown we have a higher staff to resident ratio than other London local authorities based on a simple analysis of data and not accounting for differing levels of need. Many systems and processes across the Council have not been modernised or analysed for some time to consider whether they are working as efficiently as possible.

Consideration is therefore needed on exploring and implementing service reviews and business stream efficiencies to maximise the effectiveness of services.

Operational Estate
The Council’s operational footprint has not been reviewed since working practices have changed after Covid-19. Consideration is needed if all buildings are being utilised as effectively and fully as possible.

Use of capital and other funding sources
Slippage in the Capital programme suggests we are still budgeting to borrow more money than the Council can spend, with unnecessary interest charged to revenue, and that the Capital programme needs to undergo a further review.

Increasing reserves of other funding sources (eg CIL, S106, Parking and Public Health) suggest there could be an opportunity to use these funding sources in a different way to reduce pressure on the general fund revenue budget. Any new expenditure released from the Public Health Grant would need to be spent in line with the Grant's conditions.

Improved commercialisation

Market analysis suggests that the Council may not be raising as much income as other comparable London boroughs from external sources. The Council’s largest contracts have not been reviewed for some time to consider whether penalty clauses are being invoked as regularly as they could be. Many systems and processes across the Council have not been modernised or analysed for some time to consider whether they are working as efficiently as possible.

Learning from other London boroughs suggests there are untapped opportunities in terms of considering different delivery models for non-care related functions the Council delivers.

3.2  How we plan to take advantage of advances in technology and make better use of data to inform decision making and service design

3.2.1  We are a member of the London Office of Technology & Innovation (LOTI). LOTI is helping boroughs save time and money, LOTI has substantially improved digital collaboration across London since 2019. Examples include a recruitment project which saved member boroughs at least £300k compared to market rates and a project to deliver data sharing agreements which has the potential to deliver £1.4 million in savings compared to individual agreements between all parties.

Our goal is to leverage these advancements to make informed decisions, design better services, and ensure a more connected and efficient council. This will benefit everyone in our borough as follows: 

3.2.2  Data modelling

Data modelling involves creating a visual representation of our data to understand and analyse it better. By adopting advanced data modelling techniques, we can identify trends and patterns that were previously hidden. For example, by analysing data on our housing, we will pinpoint areas with the highest need for housing repairs and allocate resources more effectively. This means better-targeted services, reducing waste and ensuring that support reaches those who need it most.

3.2.4  Artificial Intelligence (AI)

By integrating AI into our operations, we can automate routine tasks and provide faster services. For instance, AI-powered chatbots on our website can assist residents 24/7 with common queries, freeing up staff to handle more complex issues. Integrating AI technologies into our call centre transformation will assist in translation services and efficient call management. Moreover, AI can help predict future service demands, allowing us to plan and respond proactively.

In specific areas, using AI to engage with residents, from reporting graffiti, to using AI to collate Freedom of Information requests prior to response, we can see a significant benefit in consistent and efficient engagement.

3.2.5  Information governance

Information governance ensures that our data is managed securely and used responsibly. With robust governance policies, we can guarantee that residents’ personal information is protected and used ethically. By adhering to strict data protection regulations, we can build trust with our residents, assuring them that their data is safe and only used to improve council services.

3.2.6  Improved access to Council systems

Advances in technology enable us to provide better access to council systems, making it easier for residents to interact with us. By continuing to develop a user-friendly online portal through our Resident Connect programme, residents can access services such as paying council tax, applying for permits, or reporting issues remotely. This convenience reduces the need for in-person visits and streamlines processes, saving time for both residents and council staff.

3.2.7  Monitoring

As a council we are monitoring development in the following initiatives to better understand how they can be adopted and implemented.

Smart City initiatives

Using sensors and data analytics, we can monitor damp quality in council properties, traffic patterns, and energy usage. This data helps us make informed decisions to enhance environmental sustainability and improve urban living conditions.

Predictive maintenance

By combining AI and data modelling, we can predict when public infrastructure, like roads and streetlights, needs maintenance. This proactive approach prevents issues before they arise, ensuring safer and more reliable public services.

Health and Social Care integration

Advanced data analysis allows us to better understand the needs of our vulnerable populations. We can design tailored support services that improve health outcomes and quality of life for residents.

Enhanced public engagement

Digital platforms can facilitate better communication between the council and residents. Through online surveys and social media, we can gather feedback and involve the community in decision-making processes.

3.3 Plans to reduce wasteful spend within the organisation and systems

3.3.1  In 2019, the council undertook a series of service reviews looking at the structure of the organisation and ensuring the correct decision making and accountability (DMA) structure was in place. The primary intention of this piece of work was to align the organisation into 6 levels of decision-making authority from top to bottom. As well as doing so, the organisation was also able to identify service areas where a rigid 6 tier approach didn’t deliver the best experience for colleagues or residents. Teams with large operational delivery models, ranging from Noise & Nuisance down to those in libraries, required the addition of a 'supervisory' layer below the Team Manager level to ensure management resilience and capacity.

3.3.2  The Council has also undertaken a review of enabling services to review all activities carried out across the organisation with a view to implement a Target Operating Model that provides the flexibility to continually adapt and improve based on business need. Information taken from this workstream continues to feed into workforce planning through exercises such as the departmental recruitment challenge boards.

3.3.3  The implementation of Oracle, a new HR and Finance system in April 2025 will ensure that we have a modern fit for purpose system that will allow managers and staff to access and review essential HR and finance information in a timely and self-serve manner.

3.3.4  We are collaborating with London Councils on their grants programme, which is funded by London’s 33 local authorities. Between 2022 and 2026, this is investing over £6m each year to tackle two of the most serious issues facing the capital -homelessness and domestic sexual violence. The programme commissions services where it is economical and efficient to deliver services on a London-wide basis.

3.3.5  In 2018/19 and 2019/20 London boroughs and the GLA piloted 100% and 75% business rates retention in 2018/19 and 2019/20, respectively, which delivered an estimated £600m in additional retained funding, roughly half of which was spent on strategic projects that have delivered a range of economic and wider benefits.

3.4  Barriers preventing progress that government can help to reduce or remove.

3.4.1  Funding

The current Local Government Funding regime is considered to be one of the greatest barriers to becoming more productive and prevents boroughs being able to confidently plan for the longer term. With current funding settlements being on an annual basis this is a significant barrier and longer-term funding settlements i.e. 3 or 4 years would be incredibly helpful and a significant enabler to strategic planning, alongside the removal of some of the current restrictions associated with grant funding.

Currently there are too many ring-fenced grants and the associated bidding for monies and reporting of performance and spend is considered to be too onerous resulting in less time to actually get on and deliver vitally important services. Removing some of the funding restrictions and reporting burdens would significantly reduce the amount of time officers spend completing lengthy documents and forms.

3.4.2  Housing

Housing continues to be a significant cost pressure for council’s and in particular in London where demand for accommodation significantly outstrips supply and as a result costs are rapidly rising. Council’s need more money to build or buy accommodation and relaxing the use of Right to Buy Receipts would be welcomed.

The 2023 Autumn Statement increased Local Housing Allowance (LHA) rates on a short-term basis. Permanently increasing this would be beneficial along with the removal of the cap on LHA payable for temporary accommodation in the Housing Benefit Subsidy.

3.4.3  Adult Social Care

Proposed reform of adult social care has been delayed.

Additional funding via specific grants in recent years has been welcome. For example, RBKC’s £3.3m allocation from the Market Sustainability and Improvement fund supported the Council to increase fee rates paid to local adult social care providers and to increase workforce capacity and retention.

However, short-term funding makes it challenging to create long-term plans for managing increasing complexity of demand, supporting the care market and building workforce capacity.

The Council would welcome a longer-term approach to funding. This would also support our partnership work with our Health partners, and ultimately help improve our residents’ health and wellbeing outcomes.

3.4.4  Children’s services

Like adult services, children’s services are also facing demand and cost growth and children’s social care urgently needs reform to reduce ‘profiteering’ which is pushing up costs and increasing pressure on already much stretched services.

Education services need reform, and the current Dedicated Schools Grant needs to provide the right level of funding relative to need. Like many councils Kensington and Chelsea currently has a DSG deficit and whilst we have a deficit management plan this is difficult to manage as more and more children and young people have Education, Health and Care Plan’s and more investment for high needs pupils in mainstream schools could actually reduce costs whilst also provide better life chances for young people.