Business Transformation – financial clarification

By on 22/04/2010 in News

An article in today’s Birmingham Post looked at the finances related to Birmingham City Council’s Business Transformation programme.

The following statement is a clarification of the current position:

A Birmingham City Council spokesperson said:

“We always report overall Business Transformation finances over the next ten years because this is what elected members have requested, so that they can see the effect of the initiative on the council's Long Term Financial Strategy.

“Each individual programme has its own business case approved by members, and each has its own financial profile.

“The programmes did not all start at exactly the same time which means the benefits will not be gained at the same time either.

“This therefore also means that savings were made in 2008/09 and 2009/10 and do not start in 2010/11, as had been suggested in recent media articles.

“The previous years' savings are: 2006/07 – £9.6m; 2007/08 – £26.3m; and 2008/09 – £47.5m. This gives a total of £83.4m (all cumulative figures which take into account that fact that savings earned in previous years are therefore achieved for all future years).

“In 2009/10 a total of £68.4m savings will be delivered, taking the overall total up to £151.8m. In-year, this means that two-thirds of the target savings will be achieved, and not just a third as has been reported in the media.

“Business Transformation is a programme that is monitored and tracked very vigorously. Due to the complexities of changing the way an organisation like the council goes about its business, there will be benefit slippage at times - but due to the close tracking, those benefits will never be lost.

“Another key point of note is that Business Transformation has now “broken even” and will be making a net contribution to the council's budget from 2010/11 onwards. In 2010/11 alone the net benefit will be £14m.

“On a ten-year basis, approximately £1bn of BT savings are expected to be delivered over the decade to 2016.

“Over the decade to 2020 - the decade reported in the media (consistent with the Long Term Financial Strategy reporting method) - this figure is forecast to be £1.7bn.”

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