An LGA commercial expert was commissioned to carry out a review of potential opportunities for either introducing or increasing charges for discretionary service provision in Surrey County Council's Highways, Transport and Environment (HTE) directorate. This case study forms part of our productivity experts resource.
The challenge
SCC faces a significant funding deficit and is undertaking a series of projects to either make savings or generate additional income in order to balance its budget. One of these projects is a review of fees and charges.
The most current Highways & Transport fees & charges budget was £4.1m. This includes the street works permit scheme, search fees, licences (e.g. skips), traffic orders, crossovers, planning applications and other services for which the council issues a charge.
Based on CIPFA data, the total spend per head of population on Surrey’s highways is about average. However, Surrey is in the lowest quartile when this spend is considered relatively to our very high traffic volumes. This creates pressure on the service budget.
Benchmarking indicated that while in many cases our fees and charges were at an appropriate level, it was also helpful in highlighting areas where we were charging less than other authorities - for example our charges for street works permits were lower than other authorities operating similar schemes.
The council wanted to ensure that it was charging the appropriate amount for the provision of discretionary services from the C.T.E. Directorate, and in order to determine this commissioned Dave Fergus – an expert from the LGA Productivity Experts pool – to carry out a review. There were two objectives:
- To determine whether the council’s existing charges were proportionate when benchmarked against other local authorities
- To identify opportunities for the introduction of new fees and charges, or, where a charge was not feasible, to cease the provision of a discretionary service.
The solution
Dave carried out an in-depth review, firstly analysing existing data on current charging levels at SCC and then conducting research to compare these charges to those issued by neighbouring local authorities. Where he identified opportunities to increase charges, he arranged one-to-one sessions with the relevant service managers were arranged to explore the implications and viability of doing so. The findings were detailed in a bespoke report for decision by senior managers and members.
The impact
The work identified over £2m of potential savings/income in additional fees and charges. This was in-line with the amount requested by senior management and members and will help the council to establish a financially sustainable budget.
The breakdown of the savings and income include approximately £1m coming from increases to street works permit fees, a further £0.5m from increases to other existing fees and charges (such as search fees), with the remainder from advertising and other ‘new’ opportunities that are to be investigated further.
We have identified increases to fees and charges which will equate to £340,000. New charges will come into force from April 2019. A current review of search fees, laboratory trading activity and advertising is more complicated and will take us longer to realise, however we still hope to see some benefits in the next financial year.
The SCC review enabled the creation of a council-wide policy for fees and charges which shifted our approach to generating income and charging for services. Although Highways and Transport was initially the main area of focus, all other services in the council are now being challenged to use the policy to identify areas where we are undercharging and to bring these in-line with benchmarking in order to maximise income generation for the council.
For the highways service, the new approach to fees and charges has enabled us to generate additional income which can help to protect funding for locally important initiatives.
How is the new approach being sustained?
The completed review has been handed over to the CTE service for implementation. The benefits have been incorporated into the CTE transformation project and will be tracked through there.
The approach from the review has been used to conduct reviews of fees and charges in other directorates across the council, so we are hopeful that his work can indirectly result in further savings beyond the initial £2m identified.
Lessons learned
Although a project can have support at the senior level, officers/operational management may not be so well sighted and the case for change may need to be made to them.
Contact
Tom Pooley ([email protected])
Grace Abel ([email protected])