Welwyn Hatfield Community Housing Trust
Welwyn Garden City, Hertfordshire
Implementation of Open Book Accounting processes and procedures to promote efficiency and effectiveness
Welwyn Hatfield Community Housing Trust (Welwyn) is in the fifth year of delivering a £168m, fifteen year, housing repairs and maintenance contract with the contractor Mears. Welwyn believes that the relationship has not been as efficient and effective as it could be due to:
- Inefficiencies in the project management control systems for the programme leading to an ineffective use of resources
- Difficulties in the interpretation of the contract
- Costs not being controlled and managed effectively with little or no means to identify waste
- Problems arising that were not being resolved quickly
Welwyn appointed Stradia to help get the relationship back on track by implementing effective open book accounting and collaborative working processes. Stradia’s brief was to:
- Provide initial training to the project delivery team to inspire change
- Develop and implement incentivised target cost arrangements supported by open book accounting systems
- Facilitate and coach Welwyn’s team to achieve improved efficiency and effectiveness
- Minimise risks and ensure that any problems that did arise were dealt with quickly and efficiently
- Implement processes and procedures to assist in achieving a savings target of 10% per annum on the remaining programme spend of £110m.
Initially Stradia carried out a full review of the relationship between Welwyn and Mears to understand the current issues affecting the relationship as well as their joint aspirations and objectives for the remainder of the programme.
Stradia quickly established that there was a requirement to implement thorough collaborative working processes and procedures to promote efficiency and effectiveness. This involved:
- A change management programme to ensure that all teams understood the significance of collaborative working and to eliminate barriers to implementation
- Implementing open book accounting techniques which provided a basis for achieving improved value for money
- Writing protocols so that there is clarity of working for both partners
- Amending the contract between Welwyn and Mears to include rigorous targets
Although the project is ongoing, Welwyn has seen the following benefits so far:
- Welwyn and Mears now work more closely together identifying clear, mutual benefits and aligned values resulting in improved services for tenants
- Sharing knowledge and information has enabled both partners to become more innovative with their working practices
- Clear cost management, forecasting and reporting allows in-depth scrutiny and analysis of all costs has enabled both partners to identify opportunities for cost efficiencies and improved value for money
- Increased effectiveness – better informed project management decision making through transparency of cost information, highlighting supply chain costs, labour requirements, materials and equipment costs.
- Increased trust in the supply chain has strengthened the relationship allowing any duplication of effort between the partners to be minimised
- Use of a jointly held risk register, sound risk management and the use of early warning systems means that risks are more clearly allocated and managed more effectively
- Problem avoidance as a result of more open and transparent cost information
As a result of these benefits, Welwyn has already seen a saving of 5% so far this year.
Stradia see the project as a catalyst for change for other Local Authorities and organisations.
What the client says
"In a relatively short space of time the move to Open Book Accounting has completely changed the day to day running of the Repairs & Maintenance business.
Our focus is much more on where costs are being incurred and whether we can do anything about reducing them. We have better control of the budgets and can more accurately forecast how we are doing against this year’s Business Plan. It has also allowed us to identify increases in cost as soon as they happen and investigate the reasons why.
Having agreed the principles and with the monitoring of Actual Costs underway, the relationship between the Partners has noticeably improved and we are beginning to see further opportunities for efficiencies and improvement."
Craig Lowes, Asset Manager
Welwyn Hatfield Community Housing Trust