Probation Circular

THE PROBATION SERVICE VALUE FOR MONEY (VFM) PROGRAMME: VFM IN BOARDS – RELEASING RESOURCES FOR FRONT LINE SERVICES
PURPOSE
• • To inform Areas of recent developments in the VFM programme. To set opportunities for Boards, and the actions required of them, under the Programme. REFERENCE NO: 93/2005 ISSUE DATE: 23 December 2005 IMPLEMENTATION DATE: Immediate EXPIRY DATE: March 2007 TO: Chairs of Probation Boards Chief Officers of Probation Board Secretaries CC: Board Treasurers Regional Managers AUTHORISED BY: David Griffiths, Head of Business Development Unit ATTACHED: Annex A – Membership of Project Board and Reference Group Annex B – Instructions for completing the reporting template (both part of Word file) Annex C – Reporting template

ACTION
Chief Officers, Chairs and Senior Managers to: • Arrange for planning and monitoring of VFM savings achieved by Boards and for these to be reported to the Home Office using the attached template • Begin local consultation on how VFM can be increased (using the lessons learnt from the pilot project) to release more funds to front line services and reduce overheads in preparation for commissioning and contestability.

SUMMARY
The object of the NPS Value for Money Programme is to identify savings nationally and locally, without compromising quality, and to re-invest those savings in service delivery. The savings made contribute to the NOMS VFM target, and in turn to the Home Office and Government wide targets. A project has been set up in a pilot area (Staffordshire) to identify savings and reinvestment opportunities at Area level and to develop a Regional approach through working with a lead region (Yorkshire and Humberside). All Government departments have to demonstrate the VFM savings they have made to the Office of Government Commerce, which in turn reports to the Prime Minister. This circular sets out the method by which Boards must plan, monitor and report their savings. NB: A Chief Officer is needed as a member of the Reference Team for the VFM Project.

RELEVANT PREVIOUS PROBATION CIRCULARS
PC64/2005

CONTACT FOR ENQUIRIES:
Tim Hall (NOMS VFM) Muriel Lawrence (NPS VFM Project Manager) Tim.Hall@homeoffice.gsi.gov.uk Muriel.Lawrence@staffordshire.probation.gsi.gov.uk

National Probation Directorate
Horseferry House, Dean Ryle Street, London, SW1P 2AW

1. UNDERSTANDING THE CONTEXT
Why is there a VFM Programme? 1.1 In July 2004 Sir Peter Gershon published the results of his independent review of public sector efficiency – Releasing Resources to the Front Line. In the consultation document issued by the review team, their objectives were set out as: • • To release major resources into frontline services that meet the public’s highest priorities, out of activities which can be undertaken more efficiently To reduce the bureaucracy faced by frontline professionals and free them up to better meet the need of their customers

It is worth setting out these objectives since they sum up what value for money (VFM) should be about (the Home Office prefers the term VFM rather than efficiency- efficiency is one element of VFM). It should be about delivering as much as possible with the resources we have. It is not about cutting costs – only cutting out unnecessary cost and unnecessary work. 1.2 The Gershon review was specifically intended to feed into the 2004 spending review (SR04) setting challenging (VFM) targets for all government departments. The Home Office SR04 VFM target is £1,970m cumulative savings by 2007-08 (compared with a 2003-04 baseline) of which £1,240m will be cashable. The way in which cumulative savings are calculated, and definitions of cashable savings, are covered later in this circular. 1.3 The main contributors to the Home Office SR04 VFM target are the Police Service (£1,060m), Immigration and Nationality (£550m), and NOMS. The NOMS share of the target is £450m, of which £230m will be cashable. But this is only the minimum – and it is certainly not a “ceiling” after which we can stop. We, and the rest of the Home Office, will be expected to significantly exceed our targets, and all the signs are that NOMS will. How does VFM in Probation fit in with the Home Office as a whole? 1.4 Each of the main Home Office business areas (including NOMS) has its own VFM plans and governance arrangements. Within NOMS, the Prison Service and the National Probation Service (and the Youth Justice Board) are responsible for their own programmes, co-ordinated by the Planning & Finance Unit (which is also responsible for the NOMS HQ programme). The overall Home Office VFM programme is co-ordinated by the VFM Team in the Resources and Planning Unit and is overseen by the VFM Programme Board, chaired by the Permanent Secretary. But decision-making is devolved as much as possible. The VFM Programme Board develops strategy, co-ordinates effort across business areas, and reports to the centre of Government. 1.5 In other words, all VFM activity in the Home Office is part of a whole. Each Probation Board contributes to the Probation Service Programme, which in turn contributes (along with Prison Service and NOMS HQ) to the overall NOMS Programme, which in turn contributes to the overall Home Office Programme. That said, the over-arching objective is to free up resources for reinvestment in front line service delivery. All VFM activity, at all levels, as long as the savings are clearly identified and measured, will contribute to better delivery. 1.6 Ultimately, the Home Office has to report, along with all the other Government Departments, to the Office of Government Commerce (OGC). It is the OGC that oversees and challenges each Department’s VFM savings. Once a year, the OGC has to present what has been achieved across Government to Number 10. In 2004-05 the Home Office reported VFM savings of £717m, of which £486m were cashable (these are the figures as set out in the Annual report though the actual savings achieved have since been revised upwards). Currently, the Home Office accounts for one fifth of all VFM gains reported across the whole public sector. That is quite an achievement, but the expectations are that Departments will have to deliver even greater levels of VFM in the future up to and beyond
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2007-08. That, and the challenges ahead as NOMS moves towards commissioning and contestability, is the context of this circular.

2. HOW IS THE NPS VFM PROGRAMME MANAGED?
2.1 The NPS Business Development Unit (BDU) oversees the VFM Programme. This puts VFM at the centre of the modernisation of the business as we approach commissioning and contestability. 2.2 There are two main elements to the current programme, though these will merge as the programme develops. The two elements are not exclusive, and the savings generated will all contribute to the Probation Service VFM Programme. 2.3 The first element, which is fairly well established, is based on existing national NPS targets. This is essentially a centrally driven set of initiatives against which all Boards are expected to deliver. These relate to national priorities such as reducing sickness absence levels, improving utilisation of the Estate and improving court reporting. The savings scored under this element are therefore calculated on the basis of the main outputs of the Service. There will also be central initiatives such as the national stationery contract or Government Procurement Card which may apply to some Boards more than others or to others not at all. 2.4 The second element is based on a VFM project to harness the experience and knowledge of local probation staff and Boards to cut out unnecessary costs and activity, and ensure that the resulting savings are re-invested, and seen to be re-invested. Staffordshire Probation Area was designated as the Pilot Area. The project objective is to identify both cashable and non cashable savings (these terms are defined below) and to link the savings directly with local reinvestment opportunities. The aim is to improve service provision and performance, so Boards will be best placed to deliver services commissioned by the Regional Offender Managers (ROMs) and ultimately meet the challenge of contestability. 2.5 The VFM project in Staffordshire has demonstrated how savings can be made and reinvested so that they are owned by the organisation and become part of the culture. A VFM Development team has been established financed by a small percentage of achieved savings. 2.6 The Staffordshire Project is directed by a small Project Board and supported by a Reference Group comprising representatives at Area, Regional and National level. This is to ensure that learning is shared throughout the organisation and the VFM project is incorporated into the national business agenda through the Business Development Unit. Details of the membership of the Project Board and reference Group are at Annex A 2.7 In addition to the work undertaken in Staffordshire, a Lead Region (Yorkshire and Humberside) has been identified. The aim is to use the learning from the Pilot Area within the region to identify the contribution that working together as a region can make to improving VFM.

3. WHAT IS VALUE FOR MONEY?
3.1 • • 3.2 • There are two main elements of successful VFM in Gershon terms: Clearly identified and costed savings from a specified baseline Transparent reinvestment of those savings to improve the services that an organisation delivers The savings may be achieved in three main ways: producing the same level of outputs for reduced inputs (i.e. doing the same for less, without having a detrimental impact on quality. This covers procurement of goods, services and assets and deployment of staff);

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producing an increased level of outputs for the same level of inputs (i.e. doing more for the same). An example would be improvements in a report format where more reports could be completed even though the staff time utilised remained constant; and achieving greater impact on outcomes, where an example could be to bring greater reductions in reoffending.

3.3 Savings can only be scored if they do not depend upon a reduction in service quality. In particular, we will need to work hard to make sure that ostensible cashable gains do not come from cutting or deferring necessary expenditure, which simply stores up larger liabilities for the future. All VFM programmes are required to identify quality indicators which will be used to make sure that service delivery is not undermined.

4. HOW DO WE QUANTIFY VFM SAVINGS?
4.1 There is a lot of uncertainty and misunderstanding around the terminology and the rules by which VFM savings are counted. This section sets out the approach adopted across the Home Office – though this is not to say that there is a definitive answer on all these issues. Baseline 4.2 The common baseline for the Home Office VFM Programme is 2003-04 - so that should be our baseline unless that is simply not possible – an obvious example is a piece of work that starts in 200405 and VFM savings emerge from 2005-06 in comparison with 04-05 Value 4.3 The value of a VFM saving is the amount of extra resource (in pounds) which would have had to be spent to provide the same output or outcome without the effects of the VFM improvement. Annual and Cumulative Savings 4.4 This is one of the areas that generate the most confusion. What is set out below is the approach required by the central Home Office VFM Team. IT IS IMPORTANT THAT ALL VFM PROGRAMMES FOLLOW THIS APPROACH TO ENSURE A LEVEL PLAYING FIELD. 4.5 The easiest way to explain it is to start with the baseline in 2003-04. An imaginary output costs £25m in 2003-04. That is the baseline. This is represented by the first column in the charts below. 4.6 Looking first at CHART A, in 2004-05 (the first year of this imaginary VFM programme) that output is achieved at a cost of £22.5m (represented by the red section of the second column. The saving is £2.5m (represented by the green section of the second column). As it is the first year, this £2.5m is both the annual and the cumulative saving. 4.7 What happens in subsequent years is that the annual saving is the reduction in cost compared with the preceding year (effectively a “rolling baseline”). The annual saving each year is represented by the yellow arrows on the diagram. The cumulative saving is the reduction in cost compared with the original baseline year. The cumulative saving each year is represented by the blue arrows on the diagram. 4.8 So if, as in CHART A, this imaginary output were delivered at a cost of £20m in 2005-06, the annual saving would be £2.5m, because the output cost £2.5m less than in 2004-05. The cumulative saving in 2005-06 would be £5m, because the output cost £5m less than in 2003-04. Similarly if in 200607 the output were delivered at a cost of £17.5m, the annual saving would again be £2.5m but the cumulative saving would be £7.5m. CHART A shows how the savings would look, in a simplistic profile, if the output were delivered for £2.5m less each year.
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CHART A

25m

20m

15m

10m 04-05 03-04 (BASELINE) CHART B 25m 05-06 06-07 07-08

20m

15m

10m 03-04 (BASELINE) 04-05 05-06 06-07 07-08

COST OF OUTPUT

REDUCTION IN COST OF OUTPUT

ANNUAL SAVING

CUMULATIVE SAVING

4.9 The same principles apply whatever the profile of the savings. CHART B illustrates how the annual and cumulative savings would look like if, to take another example, the cost of the output reduced in 2004-05 and 2005-06, stayed the same in 2006-07, then reduced again in 2007-08. In 2004-05 there is an annual saving of £2.5m compared with 2003-04. In 2005-06 there is an annual saving of 2.5m compared with 04-05 making a cumulative saving of £5m. But 2006-07 there is no annual saving, because the cost is the same as the previous year, so the cumulative saving remains £5m. But in 2007PC93/2005 – The Probation Service Value for Money (VFM) Programme: VFM in Boards – Releasing Resources for Front Line Services 5

08, the cost is 2.5m less than 2006-07 so there is an annual saving of £2.5m and a cumulative saving of £7.5m. 4.10 The final gain is always performance in 2007-08 measured compared with 2003-04 - £10m in the example in Chart A, £7.5m in the example in Chart B
Cashable and Non-Cashable Savings

4.11 This is another area that causes confusion, and one where there are no all-embracing definitive answers. The definition to which the Home Office Programme works is: • Cashable savings are those in which budgets could be reduced, to extract the value of the saving, whilst the level of service would be sustained (such improvements are cashable even if budgets are left unaltered and the ‘savings’ are retained to support increased provision of service). Non-cashable savings are those in which savings could not be extracted (n.b. this is not the same as those savings the Department simply chooses not to extract). A fictitious example would be where, through reducing bureaucracy and improved tasking, the amount of time which Probation Officers could spend with offenders was increased by 2% but where, because this change was not sufficiently large to allow POs to be extracted, whilst continuing to supervise offenders safely, the VFM gain cannot be translated into reduced inputs.

Examples of cashable and non cashable savings are available from the Staffordshire pilot What is the target 4.12 Generally the budget provided to NPS assumes that Boards are making 3% savings each year. Broadly speaking, this means real savings are required just in order for the boards to achieve their required output, and meet activity and quality targets, whilst staying within budget. But, as set out earlier, this 3% is not a ceiling. EVERY BOARD WILL OF NECESSITY HAVE TO MAKE MORE SAVINGS THAN THE 3% ASSUMED IN THE BOARD BUDGETS. There are three reasons for this: • • • The Permanent Secretary has already asked all of the Home Office to exceed the SR04 target and be ready for more demanding targets beyond 2007-08 It is in every Board’s interest to maximise their VFM so they can re-invest the savings made in improved local service delivery and to be better prepared for commissioning and contestability Boards who receive “damping” funding receive less funding than the average increase and so have a bigger gap to bridge

What is the point of the reporting process: 4.13 The government is making VFM a priority – hence the annual OGC report direct to Number 10. To satisfy the OGC and the Treasury, the Home Office has to be able to show that it has the mechanisms in place to plan, achieve and monitor savings in all its VFM programmes. 4.14 That is important for us in terms of our credibility, but there is also the integrity of the 3% VFM already built into the Boards’ budgets. The way to look at this is that these resources have already been committed to service delivery, the assumption being that the Boards will have to find the savings to deliver their targets within budget. The purpose of the reporting process is to demonstrate that this has happened. Otherwise there is no way of demonstrating that has not been done by cutting service delivery or reducing quality.

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4.15 But perhaps most important of all, Boards also need to be able to demonstrate to their own staff, as well as the Home Office and the OGC, that the VFM savings are real, that they have not been made at the expense of service quality, and above all that that they have been re-invested in service delivery. 5. HOW DO WE REPORT VFM SAVINGS? The Reporting Template 5.1 In order to produce co-ordinated plans and reports for the NPS VFM Programme, we need to have a consistent format for recording and reporting actual and planned savings. If the reporting format is not consistent it will be all but impossible to produce meaningful figures for the service as a whole and to compare the performance of different Boards. But we also need Boards to take ownership of reporting their savings. This circular includes a reporting template that Boards must use. Full instructions on completing the template are at ANNEX B. The template itself is at ANNEX C. 5.2 In essence the template covers the two elements of the National Probation Service VFM programme outlined in section 2 above: • • The established centrally driven programme based on NPS national targets (the “national programme”) Local Board driven VFM over and above the national programme, drawing on the Staffordshire pilot (the “local programme”).

Feedback on the template 5.3 As stated above, all Boards must use the template at ANNEX C for reporting VFM savings. The spreadsheets are not as onerous to complete as they appear at first sight. Once the initial input of data is done, the majority of cells on the spreadsheets are self-calculating. However, there is a fair amount of work to be done, particularly with the first return. It is almost certain that we have not got the format entirely right at the first attempt, and feedback from Boards during the completion of the first set of returns will be very welcome. Please e-mail comments and suggestions based on your initial experience of completing the spreadsheets to Tim.Hall@homeoffice.gsi.gov.uk. Criminal Justice IT (CJIT) 5.4 CJIT encompasses a range of IT projects designed to increase efficiency and effectiveness across the criminal justice system. These are E-OASys, NOMIS (the National Offender Management Information System), and VISOR (the Violent Offender and Sex Offender Register). In addition, the Offender Management Model is both enabled by, and in turn supports, E-OASys, NOMIS and VISOR. CJIT infrastructure improvement projects are: Steps/OMNI (the infrastructure upgrade for NPS), E-QUIP (the infrastructure upgrade for HMPS), and Shared Access, (the intranet connection between contractedout prisons and other agencies). There are also several CJIT projects that are led by other Criminal Justice Organisations but which provide benefits for NOMS. These are Secure E-Mail, CJS Exchange XHIBIT Portal and CJS Exchange 5.5 The projects are at different stages of implementation and some are more advanced than others. But each is planned to deliver benefits which will be closely scrutinised by the Treasury. 5.6 Currently, the only CJIT related VFM saving included in the NPS VFM reporting template is the streamlining of production of reports. Other CJIT benefits are currently scored on a single line in the NOMS VFM Programme. However, other CJIT related benefits will need to be included in local business and VFM planning as the programmes roll out. Guidance on this will be issued shortly, the aim being that there will be no duplication of reporting. Precisely how these benefits are projected, monitored and reported for NOMS VFM programme purposes has yet to be finalised.
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ANNEX A

MEMBERSHIP OF PROJECT BOARD David Griffiths Tim Hall Muriel Lawrence Marianne Hiley NPD Head of Business Development Unit Senior Responsible Officer

NOMS VFM & Departmental Reform Co-ordinator Senior User ACO Staffordshire Probation Area Seconded to the Business Planning Unit Whitmuir Development Project Manager Senior Supplier

MEMBERSHIP OF REFERENCE GROUP (TO BE FINALISED) Colin Pinfold Barbara Jones Jayne King A Chief Officer Representative from Home Office Procurement Regional Manager West Midlands ACO Staffordshire Treasurer North & West Yorkshire To be identified David Hankin

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ANNEX B

Instructions for completing the reporting template
B1. Introduction B1.1 The template is an Excel spreadsheet with 7 tabs. Section 1 consists of the first five tabs and covers planning and reporting the centrally driven programme, (the “national” programme). Section 2 consists of the sixth and seventh tabs and covers planning and reporting on the “local programme” B1.2 The distinction made between the “national” and “local” programmes is to some extent a false one. Inevitably, the emerging work from the Staffordshire Pilot includes VFM initiatives locally that contribute to the savings recorded under the “national programme”. This was bound to happen as the savings recorded under the “national programme” can only occur as a result of action on the ground locally. The only difference (but of course it could be a significant one) is the method of quantifying the savings involved. B1.3 For the present we need to maintain the distinction between the two – to avoid the risk of double counting. This does not imply a value judgement between the different methods. The more we learn about local initiatives, the more we will understand how the national savings are delivered and we may then be in a position to finesse our recording methods, so that the two “programmes” merge. But for now, only savings not already covered by the national programme in section 1 should be recorded in section 2. Section 1 – the “National Programme” B1.4 This consists of 10 initiatives grouped under three headings:

• Improved Productivity • Better Use of Human Resources • Better Asset Management The five tabs in Section 1 are, in order of completion: TAB 1 (PRODUCTIVITY BASELINES) This sheet is for entering baseline data which then transfers automatically to the calculation sheets. TAB 2 (CALCULATION SHEET IMPROVED PRODUCTIVITY) TAB 3 (CALCULATION SHEET BETTER USE OF HUMAN RESOURCES TAB 4 (CALCULATION SHEET BETTER ASSET MANAGEMENT) Once the baseline data has been entered, these sheets are used to enter the volume/cost data that will calculate the VFM savings. TAB 5 (SUMMARY SHEET 1) This sheet takes data automatically from the previous sheets to summarise the Board’s savings achieved under the “national programme”.

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Section 2 – the “Local Programme” The two tabs in Section 2 are: TAB 6 (SUMMARY SHEET 2) This sheet summarises the Board’s savings under the “local programme”. This is for Boards to enter savings that are not covered on summary sheet 1. For consistency these are grouped where possible under the same headings, but there is also a section for savings not covered by those headings. TAB 7 (RE-INVESTMENT) This sheet is for Boards to record where they propose to re-invest the savings they have made in improved service delivery. This is not required for reporting purposes, but will help focus on what should be at the heart of the VFM process, namely releasing resources to the front line B2. Detailed Instructions General B2.1 The reporting template is designed to be completed and returned electronically. If this causes any difficulties please inform Tim Hall at Tim.Hall@homeoffice.gsi.gov.uk. The template is used to report: • • Last year’s actual savings (2004-05) Forecast savings for 2005-06 to 2007-08.

The template will be updated on a six monthly basis to replace the previous six months’ forecast with actuals and update forecasts for future years. B2.2 Cells coloured yellow or green are data cells for completion by the board with its own actual/forecast figures. Cells coloured blue are formula cells and should not normally be altered in order to maintain the consistency and audit trail of boards’ figures. B2.3 The structure of the sheets must not be altered so that Boards’ figures can be collated consistently and simply at the centre. Introduction to Section 1 (Tabs 1 - 5) B2.4 This section is looking at increase in quantity of outputs. Performance in the base year (2003/04) in terms of volume of activity/workload is compared with subsequent years. Increases in volume are valued at the unit costs in the base year. This enables the improvement value to be related only to the volume increase and to not double count any reduction in unit cost caused by expenditure reduction which might be scored elsewhere. B2.5 The value of the improvement is adjusted to allow for any increase in funds provided to meet increase in volume. B2.6 Where appropriate and evidenced, the value of the improvement may be adjusted by any change in quality. B2.7 The new Community Order which was introduced in 2005 will possibly have an impact on the workload volume figures. In 2005/06 there will be both old and new sentences being given. In 2006/7 there will be old sentences still running. For the time being the old and new sentence should be counted alongside their replacements (e.g. DTTOs and DRRs counted as if they were the same; UPW requirement counted as a CPO). It may be necessary to establish a “transfer adjustment” to take into account any change in average cost between an old and new sentence.
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B2.8 The baseline year is 2003/04, unless any activity is commenced after that year. Unit cost information was collected in 2003/04, but it was the first year and the figures are considered to be less reliable than those collected in 2004/05. So the baseline for 2003/04 is arrived at by taking the unit cost information for 2004/05 and extrapolating back to 2003/04. This is calculated in the sheet ‘Baseline Data’. B2.9 The extrapolation uses the 2004/05 expenditure, adjusted for changes in actual or target workload figures and apportioned back to 2003/04 final expenditure. Actual workload figures for 2003/04 are used to get 2003/04 unit costs. 3. Completing the Section 1 spreadsheets (Tabs 1 - 5) Tab 1: Baseline Data B3.1 This is a technical sheet but it must be completed to enter the baseline data against which savings will be scored a) b) c) d) e) f) Enter the Board’s name in cell H1– it will then transfer automatically to the other tabs Enter the Board’s data from the 2004/05 unit costing exercise as appropriate in columns (d, e, f,) Enter actual workload figures for 2003/04 (from the Board’s annual statistics) in column (j). Enter the Board’s total 2003/04 expenditure in cell I28. Enter the Board’s 2003/04 target figures in cells E36:E45. Enter the Board’s 2004/05 target figures in cells F36:F45. (Where there was no target, then use actual figures.)

The “expected” increase in expenditure in 2004/05, given the 2004/05 unit costs, is calculated in cells G9:G24. The “expected” expenditure in 2004/05 is calculated in column (h) and this is prorated to the actual total expenditure in column (i). The derived unit cost for 2003/04 is shown in column (k). These unit costs are used to value any future improvements in workload volumes. Tab 2: Productivity Return General B3.2 The productivity return requires volume of outputs to be entered for last year (2004-05) the current year (2005-06) and two forward years (2006-07 and 2007-08). 2004-05 data should be taken from the annual report/annual statistics. Future years’ data should be estimated using target figures and historical trends. The forecast data will be translated into actuals or refined each six months. Displacement of PSRs Description B3.3 A shift from the traditional Pre Sentence Report (PSR), to the more modern Specific Sentence Report (SSR) or Short Format Report (SFR). An anticipated shift of 10% in the number of reports to the SSR/SFR report and a saving of one hour per report (a conservative estimate) applied to the average staff cost per hour (derived from unit cost data). Detailed guidance B3.4 a) b) c) Enter the number of full PSRS in 2003/04 in the cell D21. Enter the number of SSR’s in cell D22 Enter the cumulative shift from PSRs to SSRs/SFRs in row 23.

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(The actual shift can be derived from the increase in SSRs/SFRs above 2003/04, provided that is no more than the fall in number of full PSRs.) d) Enter the average staff cost per productive hour (allowing for annual leave and sickness) in cell E25. Average staff cost costs are available from the activity costing data if required

Streamlining production of reports. Description B3.5 The use of an electronic template, derived from the OASys assessment, to form the basis of the full Pre Sentence Report has been calculated to save 30mins. per report. The time saved applied to the number of reports and the average cost per hour gives the annual saving. Detailed guidance B3.6 a) b) The baseline details are derived from the “Productivity Base” sheet and 3.2 above. Enter in cell F37 the number of months that the template is being fully used. Adjust cost per hour in cell F40 if necessary – currently the formula equals cell E25

(The saving in 06/07 and 07/08 assumes a 1% pa. increase in reports). Drug Orders (DTTOS/DRRs) Description B3.7 The number of DTTO’s/DRR’s in each year is applied to the unit cost in the base year to give the value of work done each year at base year costs. The increase in the value of work done compared to the base year, after allowing for any extra funds received, gives the VFM improvement. B3.8 Workload data is taken from the annual performance report (also recorded by Home Office RDS stats.). Detailed guidance B3.9 a) b) c) Baseline data is derived from the “Productivity Base” sheet. Enter the number of orders/DRR’s commenced in row 46. Enter any additional funding provided to the board in row 50 - this reduces the amount of VFM gain.

(This applied to 2004/05 when £5m was allocated to boards. The board’s share can be derived from the share of its overall main grant funding. Where any unspecific funding increase has been provided, above inflation, it will be necessary for the board to allocate this equitably to the various activity categories) d) The cost of any additional quality improvement can be entered in row 51; this is likely to be rarely used. Boards must be able to justify any figures entered in rows 50 and 51.

Accredited Offender Behaviour Programmes Description B3.10 As for Drug orders; the workload definition is number of programme completions as measured by the annual performance report.
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Detailed guidance B3.11 a) b) c) d) Baseline data is derived from the “Productivity Base” sheet. Enter the number of completions in row 57. Enter any additional funding provided to the board in row 61. The cost of any additional quality improvement can be entered in row 62. As before, this is likely to be rarely used. Boards must be able to justify any figures entered in rows 61 and 62. This applies to all comparable entries below.

CPOs /Unpaid work Description B3.12 The workload definition is number of orders (or UPW requirements for new Community sentence) as measured by the RDS annual statistics report, but counting all sentences, not just offenders. Detailed guidance B3.13 a) b) c) d) CROs Description B3.14 The workload definition is number of orders (or Community Sentences excluding UPW and DRR requirements for new Community Sentence) as measured by the RDS annual statistics report, but counting all sentences, not just offenders. Detailed guidance B3.15 a) b) c) d) Basic Skills Description B3.16 The workload definition is number of commencements as measured by the annual performance report. Detailed guidance B3.17 a) b) c) d) Baseline data is derived from the “Productivity Base” sheet. Enter the number of commencements in row 90 Enter any additional funding provided to the board in row 94. The cost of any additional quality improvement can be entered in row 95 Baseline data is derived from the “Productivity Base” sheet. Enter the number in row 79. Enter any additional funding provided to the board in row 83. The cost of any additional quality improvement can be entered in row 84 Baseline data is derived from the “Productivity Base” sheet. Enter the number in row 68. Enter any additional funding provided to the board in row 72. The cost of any additional quality improvement can be entered in row 73

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Victims Description B3.18 The workload definition is number of victims contacted within eight weeks as measured by the annual performance report. Detailed guidance B3.19 a) b) c) d) Baseline data is derived from the “Productivity Base” sheet. Enter the number of contacts in row 101 Enter any additional funding provided to the board in row 105. The cost of any additional quality improvement can be entered in row 106

Tab 3: Human Resources Return Reduction in sick leave Description B3.20 Reduction in absence due to sick leave will create more staff resources at no financial cost. The national target is to reduce sickness absence to an average of 9 days per person. Detailed guidance B3.21 a) b) c) d) Enter the actual and planned average number of days lost through sickness absence (as calculated for performance monitoring) in row 12. Enter the average number of staff in row 14. Enter the average pay cost per FTE in row 16. Enter the average working days per annum (excluding A./L & BH) in row17.

Tab 4: Better Asset Management Improved occupancy Description B3.22 The National Estates strategy includes improving the occupancy of buildings by reducing the average gross internal area (GIA) from 21 square metres per head in 03/04 to 15 sm ph. In 2007/08. Detailed guidance B3.23 a) b) c) Enter the actual and planned GIA in row 12. Enter the actual and forecast staffing numbers (FTE) in row 13 Enter the cost per GIA (per central recharge) in row15

Tab 5: Summary Sheet 1 B3.24 This is, as the name suggests, a summary of the previous sheets and will self calculate.

PC93/2005 – The Probation Service Value for Money (VFM) Programme: VFM in Boards – Releasing Resources for Front Line Services

14

Introduction to Section 2 (Tabs 6 – 7) B3.25 Although it only occupies two tabs (at present) this is a crucial section. The purpose is to allow Boards to project and report on VFM savings they achieve beyond those recorded under the “National Programme” in section 1 and to show how these savings are re-invested in service delivery. This section will develop with the learning gained from the Staffordshire Pilot. B3.26 One of the issues that makes the section 2 return so important is that it is here that the cashable savings are anticipated, as opposed to Section 1 which is non-cashable. This is where the benefits of VFM activity can be best demonstrated. Completing the Section 2 spreadsheets (Tabs 6 and 7) Tab 6: Summary Sheet 2 Description B3.27 This sheet is to plan and report on savings made by Boards through local initiatives, other than those covered by tabs 1-5. To achieve some consistency, Boards are asked to record these savings under a number of descriptive headings (including those from Section 1 but only in a descriptive sense – the savings of course are those other than the section 1 savings in those headings). There is also a heading for savings that do not fit into any of the other descriptions. Detailed guidance B3.28 a) b) c) Enter a brief description of each initiative in column D under the most appropriate heading Enter the actual/projected non cashable savings for each year in columns E – H and the cashable savings for each year in columns I - L The sub totals will self-calculate. Add more lines as necessary under each heading, but if you do need to add lines, make sure the sub-total cell formula is still valid

B3.29 There are a number of national initiatives in Procurement which may not be taken up by all boards. For this reason is thought that these should be included in this sheet. Examples of these which boards should consider including are:: • • • The GPC card (number of order/invoice transactions saved @ average cost per transaction) Telephony savings (see Bob Boxer’s letter to CO’s dated 28 October 2004 emailed on 24 November 2004). Using the HO stationery contract. Savings will depend on the previous contract arrangements and the differences in prices.

Tab 7: Reinvestment Description B3.30 This final sheet is for Boards to demonstrate how actual/planned savings have been/are planned to be re-invested in front line services. Detailed guidance B.3.31 a) The total cashable savings from Summary Sheet 2 will automatically calculate in lines 8 – 13 of columns B – E

PC93/2005 – The Probation Service Value for Money (VFM) Programme: VFM in Boards – Releasing Resources for Front Line Services

15

b) c)

Enter a description of the planned re-investment in column A. The cells are wrap text so the description can be as long as required Enter the actual/planned amounts of re-investment each year in line 16 onwards of columns B – E.

RETURNING THE TEMPLATE Where? B3.32 Once the template is completed please e-mail it to Tim.Hall@homeoffice.gsi.gov.uk By when? B3.33 Please return the completed template with actual savings for 2004-05 and (as far as st possible) 2005-06 and plans/projections for 2006-07 and 2007-08 by 31 MAY 2006 B3.34 The second return is currently planned for 30 November 2006, finalising the actuals for 2005-06 and refining projections for 2006-07 and 2007-08. Thank you in anticipation for your contribution to the VFM programme.

PC93/2005 – The Probation Service Value for Money (VFM) Programme: VFM in Boards – Releasing Resources for Front Line Services

16

SECTION 1 TAB 1 PRODUCTIVITY BASELINES
Workload figures 2004/05 (d) CROs Resettle / Licences Reports ECP/CPOs DTTOs Basic Skills Employment & training Accredited Programmes Victims Approved Premises Court services Public Protection YOTS Special projects (refer Case mgt Pre-qualification training Total Actual Expenditure 2003/04 (from 2004/05 unit costs exercise) Comparison of targets 2003/04 and 2004/05 Target 2003/04 (e) CROs orders Resettle / Licences starts Reports reports orders ECP/CPOs orders DTTOs starts Basic Skills referrals Employment & training completions Accredited Programmes contacts Victims occ places Approved Premises 1000 Court services 1000 Public Protection 1000 YOTS 1000 Special projects (refer gn Sub-Total 1000 1000 Pre-qualification training FTE TPOs. Case mgt 0

BOARD:
"Expected expenditure" 2003/04 £ (h) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0 0 0 0 0 #DIV/0! #DIV/0! 0 0 0 0 0 Derived Expenditure 2003/04 £'000 (i) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Actual workload 2003/04 (j) Derived Unit Cost 2003/04 £'000 (k) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Unit Costs Expenditure "Expected figures increase" 2004/05 2004/05 2004/05 £ £ £ (e) (f) (g) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Operational

(from annual statistics for board)

Target 2004/05 (f)

2004-05/ 2003-04 (g) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 1.000 1.000 1.000 1.000 1.000 1.000

1000 1000 1000 1000 1000 1000

SECTION 1 TAB 2: CALCULATION SHEET IMPROVED PRODUCTIVITY
Year 2003/04 £'000 2004/05 £'000 0 0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

BOARD: 2005/06 £'000 0 0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 2006/07 £'000

0 2007/08 £'000 0 0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0 0

1 2 3 4 5 6 7 8

Summary Displacement of PSRs by SSRs SFRs SDRs etc. Streamlining production of reports Drug orders Offender Behaviour Programmes Unpaid work/CPO/ECP Rehabilitation Orders Basic Skills Victims

TOTAL 1 Displacement of PSRs by SSRs SFRs SDRs etc.

#DIV/0!

#DIV/0!

#DIV/0!

#DIV/0!

Baseline full PSR reports Baseline SSRs. Cumulative shift to SSRs/SFRs Saving of one hour per report (hours) Staff Cost per hour (£) Value of saving Inflation allowance Value of saving plus inflation

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

2 Streamlining production of reports Due to OASys modernisation Baseline cost Baseline reports PSRs Baseline reports SFRs Number of months effective in year Saving (in hours) of one half-hour per report Cost per hour £ Value of saving Inflation allowance Value of saving plus inflation 3 Drug orders Number of orders commenced Total Cost (03/04) / Notional value 04/05 on Unit Cost Value of additional activity (year on year) Less additional funds provided Plus value of additional quality measures Plus inflation allowance Net value attributable to extra outputs Cumulative value over base year 4 Accredited Offender Behaviour Programmes Number of completions Total Cost (03/04) / Notional value 04/05 on Unit Cost Value of additional activity (year on year) Less additional funds provided Plus value of additional quality measures Plus inflation allowance Net value attributable to extra outputs Cumulative value over base year

#DIV/0! 0 0 0 0 12 0 0.00 0 0 0 0 0 0 0 0 12 0 0 0 0

0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

5 Unpaid work/CPO/ECP Number Total Cost (03/04) / Notional value 04/05 on Unit Cost Value of additional activity (year on year) Less additional funds provided Plus value of additional quality measures Plus inflation allowance Net value attributable to extra outputs Cumulative value over base year 6 Community Rehabilitation Orders Number Total Cost (03/04) / Notional value 04/05 on Unit Cost Value of additional activity (year on year) Less additional funds provided Plus value of additional quality measures Plus inflation allowance Net value attributable to extra outputs Cumulative value over base year 7 Basic Skills Number of starts Total Cost (03/04) / Notional value 04/05 on Unit Cost Value of additional activity (year on year) Less additional funds provided Plus value of additional quality measures Plus inflation allowance Net value attributable to extra outputs Cumulative value over base year 8 Victims Number Total Cost (03/04) / Notional value 04/05 on Unit Cost Value of additional activity (year on year) Less additional funds provided Plus value of additional quality measures Plus inflation allowance Net value attributable to extra outputs Cumulative value over base year

0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0 #DIV/0! #DIV/0! #DIV/0!

0

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0!

Inflation discount factors Inflation percentage year on year.

0.025 0.025

0.050 0.025

0.075 0.025

0.100 0.025

TAB 3: CALCULATION SHEET BETTER USE OF HUMAN RESOURCES
HUMAN RESOURCES Base Year 2003/04 £'000

BOARD:
2004/05 £'000 #DIV/0!

0
2005/06 £'000 #DIV/0! 2006/07 £'000 #DIV/0! 2007/08 £'000 #DIV/0!

Summary 1 Lower sickness absence

1 Average number of days lost through sickness absence. Improvement Average number of staff Total days improvement Average pay cost Working days per annum Value of improvement

0 0 £'000 £'000

0 0 0 0 0.000 0 #DIV/0!

0 0 0 0 0.000 0 #DIV/0!

0 0 0 0 0.000 0 #DIV/0!

0 0 0 0 0.000 0 #DIV/0!

TAB 4: CALCULATION SHEET BETTER ASSET MANAGEMENT
Base Year 2003/04 2004/05 £'000 £'000 #DIV/0!

BOARD:
2005/06 £'000

0
2006/07 £'000 2007/08 £'000 #DIV/0!

Summary 1 Increasing occupancy levels Reducing property running costs.

#DIV/0! #DIV/0! NPD Only

1 Increasing occupancy levels Total Gross Internal Area Staff numbers Average GIA per capita Cost per GIA (£'000s) Value of occupancy at 03/04 levels Value of occupancy at new levels Value of improvement

0 0 #DIV/0! 0.000

0 0 #DIV/0! 0.000 #DIV/0! #DIV/0! #DIV/0!

0 0 #DIV/0! 0.000 #DIV/0! #DIV/0! #DIV/0!

0 0 #DIV/0! 0.000 #DIV/0! #DIV/0! #DIV/0!

0 0 #DIV/0! 0.000 #DIV/0! #DIV/0! #DIV/0!

SUMMARY SHEET 1
2004/05 £'000

NON CASHABLE 2005/06 £'000 2006/07 £'000 2007/08 £'000

NPS NATIONAL TARGETS BASED SAVINGS
A IMPROVED PRODUCTIVITY Displacement of PSRs by SSRs SFRs SDRs etc. Streamlining production of reports Drug orders Offender Behaviour Programmes Unpaid work/CPO/ECP Rehabilitation Orders Basic Skills Victims SUB TOTAL BETTER USE OF HUMAN RESOURCES 1 Lower sickness absence C BETTER ASSET MANAGEMENT 1 Increasing occupancy levels 1 2 3 4 5 6 7 8

0 0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

0 0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

0 0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

0 0

B

#DIV/0!

#DIV/0!

#DIV/0!

#DIV/0!

#DIV/0!

#DIV/0!

#DIV/0!

#DIV/0!

SECTION 2 TAB 6: SUMMARY SHEET 2
SUMMARY SHEET 2 LOCAL BOARD SAVINGS
D IMPROVED PRODUCTIVITY (OTHER THAN A 1-8) 1 2 3 4 5 E SUB TOTAL BETTER USE OF HUMAN RESOURCES (OTHER THAN B 1) 1 2 3 4 5 SUB TOTAL BETTER ASSET MANAGEMENT (OTHER THAN C 1) 1 2 3 4 5 SUB TOTAL BETTER PROCUREMENT 1 2 3 4 5 SUB TOTAL OTHER LOCAL INITIATIVES (NOT COVERED BY A - G) 1 2 3 4 5 6 7 8 9 10 SUB TOTAL 0 2004/05 £'000

BOARD:

0

NON CASHABLE 2005/06 £'000 2006/07 £'000 2007/08 £'000 2004/05 £'000

CASHABLE 2005/06 £'000 2006/07 £'000 2007/08 £'000

NOTES

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

F

0

0

0

0

0

0

0

0

G

0

0

0

0

0

0

0

0

H

0

0

0

0

0

0

0

0

TAB 7: REINVESTMENT
RE-INVESTMENT
2004/05 £'000 0 0 0 0 0 0

BOARD:

0

TOTAL CASHABLE SAVINGS 2005/06 £'000 0 0 0 0 0 0 2006/07 £'000 0 0 0 0 0 0 2007/08 £'000 0 0 0 0 0 0

NOTES

IMPROVED PRODUCTIVITY BETTER USE OF HUMAN RESOURCES BETTER ASSET MANAGEMENT BETTER PROCUREMENT OTHER LOCAL INITIATIVES TOTAL PLANS FOR RE-INVESTMENT

2004/05 £'000

AMOUNT TO BE REINVESTED BY YEAR 2005/06 2006/07 £'000 £'000

2007/08 £'000