1. Portfolio/Number/Name:FPSR-C-C3 Internal efficiency savings in the Scottish Public Pensions Agency ( SPPA) |
2. Programme/Activity: The schemes 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. Efficiency | 3.1 Current target; £m | | 2005-06 | 2006-07 | 2007-08 |
Cash | 0.4 | 0.635 | 0.635 |
Time | - | - | - |
3.2 Efficiencies delivered; £m | | 2005-06 | 2006-07 | 2007-08 |
Cash | 0.41 | - | - |
Time | - | - | - |
4. Accountable Officer for delivery | Dr Andrew Goudie / Neville Mackay |
5. Project Manager | Stuart Dickson |
6. EGDD Portfolio Manager | Hilary Pearce |
7. Description of efficiency and actions to be taken | 7.1 What is the efficiency improvement? How will the efficiencies be made? 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 198 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 2007-2008 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 |
7.2 What are the main actions that are needed to secure the delivery of this efficiency improvement? 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. Our members and beneficiary numbers will also increase each year so in theory out member/beneficiary: staff ratio will increase. |
8. Associated costs | 8.1 Are there any development or redundancy costs associated with the delivery of this efficiency? The project was not pursued on the grounds of efficiency alone, hence the costs have not been netted off. |
9. Measurement | 9.1 What are the inputs that will be measured? Staffing levels and the cost of Scottish NHS pension payroll arrangements |
9.2 What are the outputs that will be measured? 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, the output will be the recurring savings generated from moving from an external provider for this service to in-house delivery. |
9.3 What is the baseline for inputs and outputs? The baseline for inputs will be the average staff in post in 2004/05 and the cost of the contract in 2004/05 The baseline for outputs will be the financial reports in comparison with the budgeted figures for 2004/05. |
10. Quality cross-check | 10.1 What quality indicators are being used to ensure that quality of service is maintained or improved? The Agency have sent out a customer survey to a proportion of our customers. The results will be evaluated and action will be taken to rectify any problems if identified. The Agency plan to carry out a customer survey every 18 months. |
11. Monitoring | 11.1 What are the arrangements for monitoring the delivery of efficiencies? The Agency Management and Executive Boards will continue to monitor progress throughout the year through monthly and quarterly reports looking at our staffing numbers and the progress being made with bringing NHS Payroll in house. |
12. Reporting | 12.1 What are the arrangements for reporting the delivery of efficiencies? 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 to the Efficient Government team and in their Annual report and Accounts. The Agency is also subject to an Efficient Government Review by Audit Scotland. |
13. Dependencies | 13.1 Explain if your efficiencies are dependent 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 6 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. |
14. Use of efficiencies | 14.1 How are the efficiencies released from improvement activity being used to improve front-line services? This efficiency saving was assumed as part of the allocation made by the Scottish Executive to the Scottish Public Pensions Agency. This freed up resources for Ministers to allocate to their priorities. |