Local Govt becoming a LO LO22000

Roy Greenhalgh (rgreenh@ibm.net)
Sat, 26 Jun 1999 08:26:24 +0100

Replying to LO21890 --


In LO21890 I offered a short report from a session at the British Deming
Association's Annual Conference relating to how a Finnance Department in a
UK based Local Government authority had adopted ideas taught in Change
programmes along with Shewhart's/Deming's PDSA approach.

Below is the report. It is approx 2.5 pages UK A4 if you wish to skip it.

Tameside Metropolitan Borough Council is a large local government
authority situated to the east of the City of Manchester in the UK. It
has a population of over 225,000 and the internal staff numbers about
7,000. Tameside MBC is made up of a number of old, relatively poor
industrial towns and faces all the problems of considerable urban

Metropolitan councils are empowered to administer virtually every aspect
of governmental authority. They handle social services, education (the
full range of pre- and school activities up to about 18 years of age:
they do not administer college and university). They deal with road and
transportation issues and the full range of planning requests from a
house wanting to add a garage to the creation of a new industrial park.
They administer council-owned housing, the building of new council-owned
homes, and the repair and renovation of existing properties. They
collect all local taxes .. Council Tax based on value of owners/rent
payer's home, and Business rates .. based on fixed scales determined by
Central government. They administer the provision and payment of
benefits to disadvantaged people in the form of Housing Benefit and
Council Tax Benefit. The latter is realised as discounts on the Council
Tax levied. Housing Benefit is assistance given in paying rent and
mortgage. Metropolitans also create and administer leisure facilities
.. swimming pools, sports centres, parks and playing fields. Other
departments administer public utilities, Fire, Police, ambulances and

Customers of Local Government services have no choice where they source
their services: they have to take them from the authority in which they
live. Thus criticism is usually stronger when it is levelled "at the
council". There are greater pressures to provide best service possible.

Mike Greenwood, the Chief Exec was appointed in 1994, coming from a
large rural county in Wales. In the early 1990's, Mike was attracted to
W Edwards Deming's teachings and resolved to implement the teaching's
spirit as well as the practice in Tameside MBC. No other local
authority in the UK has invested so much time and money in learning
about Deming and Shewhart, and their philosophies of Continuous
Improvement and Process Improvement. Mike lead his Chief and Assistant
Chief Officers through a 3 day course where they were able to see for
themselves how really effective and long lasting change could be if it
was brought about as a long term affair. The training and consultancy
company that created and ran the course had two principals who embraced
Deming's teachings wholeheartedly, and are members of the UK's British
Deming Association's Alliance of Consultants. That same course, now
franchised, is the basis of the continuing internal education run by a
highly skilled internal team within Tameside MBC.

Erika Wenzel is an Assistant Finance Director at Tameside MBC, with 4
managers and 120 staff reporting to her. In 1995, she was one of the
first senior officers to attend the course, and has repeatedly, and
simply, stated that it was the best course she has ever attended. Her
staff say the same when they return from the in-house versions.

Her first task was to let six of her staff form a group, attend the
course, and then come back fired up to tackle a real chestnut in local
government Revenues Finance .. making dependent changes to the Council
Tax and the Council Tax Benefit systems BEFORE the demand notice for
this year's Council Tax is sent out!

To get a baseline, the small team measured the "current" situation. The
mean time to get errors corrected was 9.92 working days, with 78% of
attempts incorrect. The team followed Deming's (and Myron Tribus')
exhortation to management: "map your processes". There they saw the
problem in visual form, and set about making small changes to the

After the first PDSA cycle, improvements were made to the communications
systems between the team handling Council Tax and the team handling
Benefits, problematic changes were prioritised, and they instituted a
way of suppressing the new bill that always caused the customer problem.
The results were a reduction of outstanding days to a mean of 7, and a
reduction of "incorrect first time" to 50%.

A second PDSA cycle was performed, resulting in a realisation that staff
who work on such closely related issues affecting a single customer
ought to sit together and discuss what the appropriate action was for
any specific customer. They would then carefully synchronise their
separate actions on their separate computer systems. The results of
these changes were a reduction to a mean of 1.2 days, and a complete
reduction to 0% "incorrect first time".

The team constantly monitors process times and error rates, plotting
daily values on Shewhart Control Charts.

This first "test" of the theory was important, and its success caught
the imagination of other staff in her team. Many staff have taken the
3-day course, sometimes with projects in mind. Erika explained that she
now has every member of the 120 staff involved in small-scale CI
projects. Staff are not only encouraged to invest time in CI projects,
but the culture has changed to such an extent that there is an air of
expectation to take on CI work. The CEO bases his Chief Officer's
annual appraisal on their CI projects. And now every member of Erika's
staff is expected as a matter of course to be involved in CI projects
throughout the year. It is part of the Annual Appraisal process.

Erika gave further examples of improvement. In the Debtors section,
debt reduction was achieved through equally small scale but potent work
based on process mapping, using the 7 analytical tools, and with a
deepening understanding that this work had to be continuous.

Erika herself lead this project as there was an outstanding debt of over
(UK pound) 5,000,000 which was growing each year. Pet Theory and Best
Efforts had been tried and failed. By automating the Recovery Process,
they reduced the average number of days from 42 to 5. Instead of the
Management Information system reporting the size, and the growth of the
debt 5 days late, it was reduced to half a day. Flowcharting the debt
handling processes in each department of the authority brought to light,
for the first time, where the delays were occurring.. and why. For
example, there was an unofficial policy "to be easy on schools". Why?
Some debt handling cycles were in excess of 200 days! Queries on an
invoice could cause a one-time delay of over 2 years.

By involving the staff who had attributed to these delays, clearing the
blockages in the process, and monitoring each department's handling of
its debts, the overall debt had fallen from its original figure of (UK
pound) 5,000,000 in mid 1994 to (UK pound) 2,000,000 in January 1999.

There were no fancy expensive management gizmos. No expensive IT
initiatives. Just a simple adoption and practice of process mapping,
PDSA and well-understood ways of tackling the analysis/study stage.

The other strong trait that emerged was how Erika's own style of
management changed. Previously she admitted to being a classical
interventionist manager. She now sees herself as being a leader amongst
leaders, showing considerable trust in her staff, giving them their head
and letting them experiment in the sure and certain knowledge that most
of the time, the results would exceed all expectations. She also
commented that she grew up within local government believing in and
practising the "target" approach to management. That has changed, and
she now looks to CI projects for human as well as business benefits.

Her staff have formed stronger teams and personal liaisons as a result
of the course and the CI work they have done. They are very much aware
of each other and other departments now. Before, other departments were
an imposition. Cross training in all the skills needed in the
department is seen as something to aspire to rather than as a threat.
Work sharing and job sharing are now all possibilities. Erika also
commented that she now unerstands the real difference between extrinsic
and intrinsic motivation. She sees her staff as more and more
intrinsically motivated.

There have been staff reductions as Local Government has set out to
reduce costs. Erika seems to have managed this through natural wastage
and the transfer of staff to other posts in other departments.

Tameside MBC have won a number of awards in the last 3 years, all of
them extremely prestigious in the UK Local Government sector. In 1998
they won the Local Government Chronicle's "Finance Department of the
Year Award" for their approach to debt reduction and improvement of
administration of Council Tax and Benefits. In 1999 they were in the
top 3 authorities in the UK of the Institute of Revenues and Rating
Valuations, the professional body for Council Tax and Benefits
administrators. This year they were 2nd in the National Local
Government "Top Team" awards for their use of CI.


-- Roy Greenhalgh


Roy Greenhalgh <rgreenh@ibm.net>

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