1. Portfolio/Number/Name:FPSR-C/C3 Internal efficiency savings in
the Scottish Public Pensions Agency
(SPPA) |
2. Programme/Activity: Please
include a short description Theschemes administered and regulated by SPPA
are the pensions, premature retirement
compensation and injury benefit schemes
covering employees of the National Health
Service in Scotland, the pension scheme
covering Teachers in Scotland, the scheme
covering staff of the Legal Aid Board for
Scotland, the pension scheme covering staff of
the Scottish Agricultural Colleges, the pension
scheme covering the Members of the Scottish
Parliament and the now discontinued "Crombie"
compensation scheme covering former employees
of colleges of education. SPPA also exercises regulatory and
appellate functions in respect of schemes
administered by local authorities - the
local government pension and discretionary
payments and injury benefit schemes, the
teacher's compensation for premature
retirement scheme, and the pension schemes
covering the police and fire services. |
3. Planned Savings | | 2005-06 | 2006-07 | 2007-08 |
Cash (m) | 0.175 | 0.635 | 0.635 |
Time Releasing (m) | 0 | 0 | 0 |
4. Accountable Officer for
delivery | Andrew Goudie |
5. Project Manager | David Weir, Finance Manager |
6. EGDG account manager | Carolyn Girvan |
7. Quality Impact | Describe any impact on the quality
of service delivery. Be specific and
explain if the expectation is positive,
negative or neutral. The Agency planned to reduce staffing
from 210 to 200 (10 members of staff) in
2005-2006 and to 192 (a further 8) by
2006-2007. It was anticipated that the
impact of this reduction would be offset by
increasing staff expertise in pension
administration processes and by the
development of more streamlined business
processes. However, following Ministerial
decisions in 2004 which have impacted on
the way in which we carry out certain
tasks, we now plan to reduce to 203 in
2005-2006 and 196 in 2006-2007 for core
activities. Reducing the staffing to the levels
initially suggested would substantially
decrease the quality of service that we
could provide to customers. The key areas
affected would be: the timeliness and
accuracy of service; the range of service
functions provided; and our ability to
comply with statutory obligations relating
to governance and finance. It is also
likely to have a negative impact on our
ability to introduce effective
administration arrangements for the new
pension schemes being introduced in 2006. A
further consequence is that the Agency
could not guarantee that it would complete
its task of reducing its backlog of
inaccurate records by March 2006. The
consequences of this would include an
inability to produce updated scheme
valuations and a marked decrease in our
ability to issue annual benefit statements
to scheme members. Core activities are defined as work we
presently carry out in relation to current
pension schemes. This does not include
costs associated with the development of
new administrative arrangements for the new
pension schemes being introduced across the
public sector in 2006. |
8. Dependencies | Explain if your savings are
dependant on legislation or other
structural changes being achieved. Due to the Government's decision to
introduce new public sector pension schemes
in 2006 we are creating a project team to
oversee this process. The team will employ
4.5 members of staff for each of the next 3
years. We have excluded these costs from
Efficient Government calculations on the
basis that they clearly relate to a one-off
task. |
9. Description of efficiency and
actions to be taken | 9.1 How will the saving be made? Be
specific about number/size of contracts, staff,
posts dates etc. We aim to meet our Efficient Government
targets in three ways: i. by reducing average staff numbers
for core activities from 210 to 203 in
2005-2006 and from 203 to 196 in
2006-2007. ii. by saving approximately 300,000
p.a. by bringing the NHS payroll function
in House. We currently pay 500,000 to an
external provider to carry out this work
but we will replace these costs from
2006-2007 with the cost of employing 7
members of staff (150,000) and a small
amount for non staffing costs
(50,000). iii. by exploring the options for
acquiring new pensions administration work
from other parts of the public sector |
9.2 What action is critically needed to
secure delivery of this saving? Be specific,
and name the key action managers if they are
outwith your immediate management chain (e.g.
in an NDPB.) Staffing-We will reduce our staffing
complement by finishing temporary staff's
contracts and reducing staff numbers
through natural turnover. NHS Payroll-Arrangements are in place
to bring payroll in house by 1 January
2006. We will employ 7 members of staff to
carry out this work at a total cost of
200,000 for staffing and Non Staffing costs
but this is offset by the fact that we will
not need to pay a 500,000 fee to the
current service provider |
10. Impact on Staffing to achieve the efficiency
gain | If there are to be any changes in
staff numbers (at activity level) to
achieve the efficiency gain, please
indicate how many full time equivalents and
how far you expect savings to be achieved
by natural wastage (show additions as + and
reductions as -). |
| 2005- 06 | 2006- 07 | 2007- 08 |
+ | 0 | 0 | 0 |
- | 7 | 14 | 14 |
Net | -7 | -14 | -14 |
Explanation | Staffing - We will reduce our staffing
complement by finishing temporary staff's
contracts and reducing staff numbers
through natural turnover. |
11. Benefits | In general, the benefits of the
Scottish Executive Efficiency Plan are the
enhanced outputs from the resources
Ministers have been able to allocate in
SR04. But if there is a direct connection
between this efficiency saving and the
enhancement of a particular service please
describe it here. N/A |
12. Gross/Net Cash Savings | 12.1 Please set out the gross recurring
saving and any offsetting recurring
expenditure? Gross recurring savings 0.175m in
2005-06, 0.635m in 2006-07 and 2007-08 Offsetting recurring expenditure is
0.2m in 2006-07 and 2007-08 |
12.2 Against what budget does this
expenditure and saving fall? SPPA Administration Budget |
12.3 Has this saving been built into your
budget? Yes |
12.4 If so, what is the maximum allowable
expenditure against the budget data, in each
year, for that saving to be
delivered? 2005-2006 -8.6m, 2006-2007 -8.4m,
2007-2008 -8.2m |
12.5 If not, how do you propose to invest
the additional cash back into public
services? N/A |
12.6 What plans do you have to exceed the
required saving? Explain by how much in each
year. Savings are to be met within budget.
The Agency have no further plans to exceed
the savings they propose to make. |
13. Time - release savings | 13.1 Please explain any time-releasing
savings indicated at question 3. N/A |
13.2 Please describe the method you
plan to use to calculate the cash
equivalent of those time release
savings. N/A |
14. Measurement and
Monitoring | 14.1 How are you proposing to measure the
expected efficiency benefits (e.g. in terms of
costs, level of output or quality of
service)? Calculations of the staff savings will
be made by comparing the average staff in
post for the years in question and
calculating the reduction in staff with the
average salary costs for the grade. In
respect of the savings for bringing NHS
payroll in house we currently pay the
current provider 500,000 per annum to pay
the beneficiaries. From 2006-2007 we will
no longer be paying for this work although
we will have to pay 7 members of staff to
undertake this work. These costs can be
easily identified. |
14.2 What monitoring & reporting
procedures will be put in place to measure the
efficiency savings (How often will progress
towards the target be monitored? Who will have
lead responsibility for reporting progress and
what procedures will be in place?) The Agency Management and Executive
Boards will continue to monitor progress
throughout the year through monthly and
quarterly reports, and at the year-end the
Management Board will be able to report if
the savings have been made. |
14.3
Monitoring Data: Sources, validation and
risks - What data will be used to measure
progress? Is all the required information
quantifiable and readily available? If not
what action will be taken to rectify
this?
See 14.1 and 14.2. Costings will
have to be done at the end of each period
to show the differences in Staff in Post
figures and the rate for Average Staff
Salaries at the relevant time.
- What measures will be in place to
validate the accuracy of the data? Who will
take responsibility for this?
See 14.1 and 2. Costings will be
documented and checked by Audit
Scotland.
- Are there any issues or risks relating
to how you plan to use the data? (e.g.
accuracy, difficulties in collection)
No
|