How the City of Edinburgh Council spent less but achieved more

The Council saved £85m with another £100m in the pipeline after putting in place an innovative commercial model with EY

By Tamsin.Rutter

16 Aug 2018

Like many local authorities, City of Edinburgh Council faces growing demand for its services at a time when financial pressures across the public sector are increasing. The Council faced a £150m funding gap over five years, which it was determined to close while continuing to meet the needs of its residents.

Working across all services, we identified a broad range of opportunities. These drove financial and wider benefits through a range of commercial activities including contract review, sourcing, income generation and innovative delivery models.

One team working together

From the start of the partnership between EY and the Council, there was a commitment to team working. As well as the delivery of commercial projects, activities to improve commercial practice and build capability across the Council were essential in maximising and sustaining the benefits.

We drew upon the strength of EY to address the challenges faced by the Council team. This included insight, innovation and project delivery teams with expertise in areas such as contract and supplier management, data analytics, economic development, alternative delivery models and integration of health and social care. We also brought together the Council and other clients to share learning and accelerate the delivery of savings

Creating value for all

By developing and embedding a commercial culture across the Council, the partnership made significant progress in demonstrating value from tight budgets. This went beyond just savings and considered the operational and community benefits that could be driven through thinking commercially in all areas of service delivery. “While the savings were our primary target, we are proud of the social impact this partnership has made. This has included increased apprenticeships and work placements, greater opportunities for the third sector and improving sustainability across all categories of spend,” says Neil MacLean, Partner, EY.

Key to the success of the programme has been active sponsorship from Elected Members and the Council’s Leadership Team. We have worked closely with service teams across the Council to identify and deliver in excess of 800 projects. These have been delivered through a structured, five-stage process to provide visibility and clear accountability throughout.

To sustain value and to support the ongoing delivery of projects, we have improved commercial practice through the implementation of appropriate controls and a comprehensive capability development programme. “It was not enough for us to deliver some headline projects. We are committed to building sustainable commercial capabilities across the Council to maximise the impact of our partnership” says Neil MacLean, Partner, EY.

Getting the right results

City of Edinburgh Council’s determination to close its long-term funding gap is paying off. So far £85m has been saved with another £100m in the pipeline. This has been achieved through a collaborative approach; drawing upon the shared insight and capabilities of the Council and EY.

The impact of the Commercial Excellence Partnership has been recognised by others. The Council has made significant progress in the externally-assessed Procurement Capability Assessment where they have been classed as ‘superior performance’, one of only three Councils in Scotland to have that rating. They have also received a number of Scottish and UK-wide awards to reflect the progress they have made.

We continue to work with City of Edinburgh Council, helping them to build a better working world by meeting financial challenges and sustaining essential services.

Cllr Alasdair Rankin, Convener of the Council’s Finance and Resources Committee, said: “We have increasing service demand and continuing real-terms funding reductions which means we need to do more with less. The innovative commercial model which we have put in place with EY has been very effective as they are only rewarded on the value delivered for the Council.

“Working together has helped to embed a robust commercial approach across the Council. Both organisations have brought different but complementary skills to the programme, which will ensure the sustainability of savings and wider benefits over the coming, challenging years.”

Find out more here.

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