As spending cuts loom, Europe’s largest local authority has already made huge efficiency savings, as Stephen Hughes explains

The very mention of the words ‘business transformation’ is enough to trigger wild debate, speculation and discussion among elected members, council employees and the media in Birmingham.

In many ways, this is similar to what is being experienced at a national level as the coalition government makes its seemingly-daily announcements on how it plans to tackle the national deficit.

For those of us in Birmingham, this intense scrutiny is nothing new.

While the Government is coming up with ways to tackle the situation it has inherited, we launched our forward-looking Business Transformation programme in 2006, because we recognised many years ago the services we provided for citizens needed to be dragged into the 21st century and made more cost effective.

Since 2006, we have achieved £151m of savings. That is £151m which used to be spent within our £3bn-plus annual budget in less effective ways. The money has been redirected into new and improved services, and in other essential areas where there are budgetary pressures.

Over the 10 years to 2016, we are firmly on track to realise almost £1bn of savings. Taking our savings banked to date, and mapping them across the decade, we are almost half-way there.

And in terms of a net contribution to the council’s budget, Business Transformation is now tackling the critics head-on. In 2009/10, the programme broke even – supplying £14m to our general fund.

Put simply, the upfront investments we made are paying off. I feel this is something we should be proud of, and the Government and other local authorities can learn from. To achieve this, massive change was – and still is – needed. A culture of doing things the way we always have must be broken to create transformational change.

The Government is looking to make big savings and changes in a short space of time. This is, of course, meeting resistance in many quarters, and that is entirely natural – people instinctively do not like change.

However, there is a wider picture that everyone has to accept. We are absolutely clear that there will be a reduced headcount when we reach the end of Business Transformation.

As we introduce slicker ways of working to provide world-class services, this is obvious.

Modern ways of working will take people out of their comfort zones, but we are ultimately here to serve citizens to the best of our abilities. It may be controversial to say this, but we are not here to simply employ people.

I often look at the photographs of bygone Birmingham in the Council House committee rooms and it always makes me think. Do we really want things to stay the same? If the resistance to change that we have had recently had been prevalent 100 years ago when those pictures were taken, we would still be lighting the city with hand-lit gas lamps.

We are a city which has always been at the forefront of change. Our motto is ‘Forward’. And this is exactly where we need to be going in 2010. To enable this to happen, we are committed to ensuring staff are given the tools and training they need to succeed, and that the headcount reduction is carried out in a managed way.

When departmental structures are reshaped, we seek to delete vacant posts. Other methods such as voluntary retirement, early retirement, job sharing and reduced working hours are other ways to do this. Compulsory redundancies are always a last resort.

Business Transformation – whether the naysayers like it or not – has put Birmingham ahead of the game.

Without this programme, the savings we are likely to need, something in the region of at least £230m in the next four years, would be larger and harder to make.

Thanks to Business Transformation, we now have a financial system that enables us to consistently pay more than 90% of all invoices that we receive on time. We have a website and associated infrastructure that means citizens no longer have to traipse to Neighbourhood Offices to resolve simple queries.

We have revolutionised information management and storage, cutting out process and red tape. The government target for Decent Homes has been met. We are moving from a ‘one-size-fits-all’ model for adult social care towards one which empowers the service-user. Through our Brighter Futures programme for children’s services, we are trying out schemes that have proved to work elsewhere as we seek to prevent problems young people face rather than throwing money at curing issues which arise.

Our People Solutions system gives managers online interactive HR advice, support and training, and we have an electronic performance-management system which links individuals’ performance and behaviour to their pay.

This is just scratching the surface. Business Transformation is vital. There simply is no other game in town. It has made a positive difference and places us in the best position possible to weather any public finance storms that we may face.

We need our staff to be a part of that journey, and must make every effort to ensure they feel a part of it. This has been a real challenge but the current national situation means the tide is beginning to turn.

I feel the Government and councils can learn much from what we have done at Birmingham City Council during this unprecedented agenda of change.

Stephen Hughes is chief executive of Birmingham City Council