Paul Jackson
To make like‐for‐like comparisons between services and authorities, a common approach to cost allocation was therefore required. This needed to be one that more accurately tracked service and process costs( which might cut across functional areas) than was available by simply allocating costs in a‘ top down’ manner via budget headings. This was particularly important in building a body of evidence on the efficiency of different channels, as well as supporting business cases for channel migration( particularly in partnership projects).
These findings were set out in the report,‘ Validated Service Delivery Costs’( IPF / NWeGG 1996). While the report supported the case for moving to online channels, it also noted that channel migration might also demand accompanying process redesign and technology integration, all of which would affect the business case for change. The key recommendation, though, was for a consistent approach to cost measurement, based on agreed principles and guidance( p. 3). It was also recommended that the project partners should liaise with the Electronic Services Delivery Toolkit community to evolve an approach to transaction analysis that was consistent with ESD‘ controlled service lists’.
Later to become‘ Effective’ Services Delivery, ESD Toolkit is a body funded jointly by the Local Government Association and member councils. Among other things, it supports a consistent approach to defining local authority services( through its service lists), as well as being a repository for tools, ideas and case studies on innovation and improvement. In due course, ESD Toolkit did indeed take over responsibility for the outputs from the Delivering Efficiency report( i. e., CLG 2008) and what became known as the Cost Architecture Framework.
4.1.2 Phase 2: The cost architecture approach to service costing
As the above indicates, the work that the 2006 report set out to produce two key deliverables:( 1) a common cost allocation framework and( 2) a standard definition of what constitutes a local government transaction. This was intended to address a gap in the sector in terms of the ability to produce consistent data on the costs of public services, thus increasing the ability of authorities to benchmark with one another.
The work was also seen to be an explicit complement to projects funded by the Department of Communities under the National Process Improvement Programme( NPIP) – a set of initiatives to improve skills and practices in local government around the design and management of business processes. In particular, though, it was focused on understanding the cost of serving customers, especially how these varied between different delivery channels.
The Cost Architecture Framework takes the view that the starting point for a common costing approach needs to be the‘ functions’ carried out by a local authority. These will either be‘ duties’, which an authority may have to perform( such as the provision of school meals), or‘ powers’( for example, promoting tourism), which confer councils with the right to take certain actions. In order to produce a standard vocabulary for such functions, the cost architecture approach draws on two key reference points: the‘ business process architecture’ work carried out by NWeGG in the North West of England, and the‘ controlled services lists’ maintained by ESD toolkit. Both are described below.
Local authority business process architecture: The business process architecture for a local authority is the set of things it has to do in order to execute its duties and powers as a local authority. These are essentially a generic set of business processes, which are themselves comprised of different activities. The process architecture( what work is performed) is therefore common across local authorities. That said, there are‘ design’ choices as to how these are carried out ‐ how the organisation is structured and which channels it uses, for instance.
The NWeGG work in this area originated in Blackburn with Darwen Council, continued at Chorley Borough Council and culminated in work with councils in Cumbria. Its aim was to derive the fundamental building blocks of what local authorities do. Such blocks – or generic processes ‐ provide a starting point( within and between organisations) from which to identify areas of commonality, challenging existing ways of doing things and identifying approaches to delivering services.
The work identified some 64 generic processes – or‘ units of work’ – that constituted the business architecture of a local authority( in Chorley’ s case, a district council). This included, for instance,‘ take a payment’ and
251