DMFD169 Transformation Directorate Restructure

1.1 Report LFC-0709y to the London Fire Commissioner (LFC) explains that, in January 2020, London Fire Brigade (LFB) published its Transformation Delivery Plan (TDP) in response to the reports received from Phase 1 of the Grenfell Tower Inquiry (GTI) and the first inspection by Her Majesty’s Inspectorate of Constabulary and Fire & Rescue Services (HIMCFRS). The TDP set out LFB’s strategic vision and purpose, and put in place the first steps towards transforming the organisation.

1.2 The Director for Transformation, after joining LFB in June 2020, instigated a programme of work to build the foundations needed, in terms of both professional capabilities and process, to create an environment that will support sustainable transformation. Whilst much of the work is in progress, the Directorate is also focused on resourcing to sustain the development and deployment of those capabilities and processes; develop LFB’s long-term strategy; and support the rest of the organisation through what will be a significant period of change across all aspects of LFB delivery.

1.3 The mission, aims and objectives for the Transformation Directorate have been established and approved by the LFC. The new directorate structure is designed to help achieve this mission.

1.4 The organisational capabilities and capacity, both within the Directorate and more widely across LFB, were reviewed extensively from November 2020 to July 2021 to establish the extent to which transformation can be supported and executed effectively. This review demonstrated that, whilst the Transformation Directorate has talented and skilled team members across most disciplines, neither it nor the wider organisation are sufficiently equipped with the capability or capacity to deliver the aims and objectives of the organisation to support the required outcomes over the coming years.

1.5 During summer 2021, a new structure was developed that addresses the gaps within the Directorate, such that it can deliver its functional requirements whilst coordinating and building the capacity and capability that is needed more widely within LFB.

1.6 To date, a significant amount of work has been done to design and develop capabilities to support and enable transformative change across the organisation. This work has been resourced by existing staff, supported by a small number of consultancy and agency staff. Whilst this approach has enabled the design and development of capabilities – and in some cases, the final outputs (for example, risk registers, the portfolio strategy and approach, and LFB’s high-level target operating model (TOM)) – there is a need to inject sufficient resources with the correct skills and knowledge to deploy, embed and sustain these capabilities across the organisation.

1.7 The new directorate structure will support LFB to deliver against the recommendations and actions from HMICFRS inspections, and the first phase of the GTI, in a sustainable way. It is essential that these recommendations are fully addressed as soon as reasonably practicable.

2.1 The proposed new structure is included as Appendix 1 to report LFC-0709x. This structure consists of six disciplines:

• Business Services
• Portfolio
• Strategic Planning
• Performance Improvement
• GTI Interface and Support
• Service Delivery Assurance

2.2 Expenditure is recommended for approval for expenditure on new posts in the proposed Business Services, Portfolio, Strategic Planning and Performance Improvement teams. The GTI Interface and Support, and Service Delivery Assurance functions do not require any further expenditure to be approved in this decision.

Business Services

2.3 The proposed Business Services team will comprise the following capabilities, operating under the leadership of a professional Head of Business Services:

• risk and assurance
• business continuity
• inspection and compliance.

2.3 A solid risk-management strategy and enterprise assurance framework are essential to moving LFB from a position of reacting to risks once they have happened, to one where risks are proactively identified and managed before they manifest, subsequently damaging the reputation and effectiveness of LFB as a whole. Failure to manage risks often results in higher costs, and in the very worst scenarios: loss of life or serious injury to staff and/or the public.

2.4 The benefits of an active risk and assurance function, and an associated assurance framework, mean that the organisation will have enhanced capabilities to improve in the following areas:

• compliance with statutory duties
• compliance with regulatory requirements
• compliance with Fire Standards
• reduction in reputational risk
• reduction in financial risk
• reduction in risks of not meeting strategic objectives and priorities.

2.5 The risk and assurance team will continue to embed the recently established departmental, directorate and corporate risk registers. This will enable a broader and deeper understanding of the risks to LFB’s strategic objectives and priorities, and how well they are being managed. It is not feasible to expect all staff to become experts in risk management; therefore, an adequately resourced and skilled risk team will provide specialist support. This will enable the risk registers to be effectively managed to support prioritisation and decision-making; and to deliver against the new risk-management approach and enterprise assurance framework approved by the LFC, and on which the Deputy Mayor was consulted (LFC-0688)).

2.6 A dedicated function to manage the relationship between LFB and key external partners such as HMICFRS and the National Fire Chiefs Council (NFCC) will enable the organisation to drive change at a national level and ensure compliance at a local level.

2.7 The COVID pandemic has had a significant impact across the organisation, requiring business continuity arrangements to be enacted for the past two years. These arrangements have been centrally coordinated by the Business Continuity team throughout, supporting departments to adapt and overcome to the challenges presented by the pandemic. The learning from the events of the past two years requires a refresh of all departmental and corporate business continuity plans, together with the introduction of a more robust testing and exercising regime. Both outcomes will have an impact across all departments, which will be minimised by central coordination and support.

2.8 As a result of the pandemic, LFB has greater understanding of the value the Business Continuity team adds at a more strategic level. There is recognition that this team’s workload will continue to increase; at present, the team is not sufficiently permanently resourced to support the organisation. This support includes: being available to continue coordinating LFB’s response to future business disruptions; and reviewing all departmental business continuity plans, which will yield benefits in respect of consistency and effectiveness from the specialist support provided by the central team.

2.9 An adequately resourced team will also ensure the development and ongoing deployment of a robust testing and exercising regime that includes internal stakeholders and multi-agency partners. The proposed directorate structure anticipates the establishment of a team of three staff; this mirrors the current interim capability, which has been enabled using temporary agency staff.

Strategic Planning

2.10 The creation of LFB’s TDP has generated an awareness of the benefits of defining the organisation’s longer-term goals. The executive team agreed on the organisation’s purpose and vision for the future, which set the context for the improvements and changes required in response to the GTI and HMICFRS recommendations.

2.11 Previous plans, including London Safety Plans, had identified new service opportunities and areas for improvement. However, without a clear, shared sense of the organisation’s longer-term goals, it had been difficult to identify what actions mattered most and how to prioritise those improvement opportunities. As a result, efforts were sometimes spread too thinly; the potential benefits were not always properly understood or fully realised; and, without a goal, it was difficult to measure progress and demonstrate LFB’s achievements.

2.12 This led to criticism from HMICFRS following their first full inspection of LFB in 2019. They recommended: “The Brigade should make sure it reviews how it allocates its resources to activities, based on the risks set out in the London Safety Plan.” They added:

“There is no longer a clear link between the Brigade’s strategic direction and the London Safety Plan. Important projects are either stalled or behind schedule. We were told that the desire and capacity for change had slowed.”

2.13 The role of the strategic planning function is to enable LFB to express its strategic ambition; and to create coherent, prioritised, sequenced plans to achieve it, rather than being merely responsive to changing circumstances. It will help the organisation to define its purpose; and to establish realistic goals, objectives and plans, consistent with its vision and purpose, that can be clearly communicated to the public. This will provide a base from which progress can be measured and assessed.

2.14 This will, in turn, create a focus for cultural change by enabling colleagues to identify with the organisation’s goals; improving morale; and giving people a clear sense of purpose.

2.15 The organisation has recently chosen to invest in the creation of a TOM, which is where this strategic ambition is expressed in full and the plans to achieve it have been developed. This provides a clear route to achievement, which – together with clarity around ownership and accountability – will provide the framework against which decisions can be made and progress assessed.

2.16 This TOM enables LFB to distinguish between a good idea and a great idea, informing investment decisions and focusing limited financial and people resources on the activities that will make the most difference. It provides the evidence base to develop value cases that will inform funding bids and resource discussions with the Mayor and government.

2.17 A key function of the strategic planning team will be to maintain and adapt the TOM as necessary, providing the tools for managers and working with Communications to embed it across the organisation, holding the organisation true to those plans and working with the portfolio function to facilitate delivery of the transformation portfolio that it leads to.

2.18 The team will also lead the organisation in the development and regular renewal of its Community Risk Management Plan (CRMP), which is a statutory requirement of every fire service in England. The CRMP will set out the strategic ambition expressed in the TOM and its supporting plans. The team will also produce the Assessment of Risk in London and help the organisation develop its plans to respond to those risks, ensuring these plans are integral to the CRMP. The team will oversee community and staff input to the development of the CRMP, and produce or coordinate the delivery of all relevant supporting documentation.

2.19 The strategic planning team will provide advice and support to the executive team, developing the strategic muscle of the organisation and keeping abreast of good practice in community risk management and strategy development, both nationally and internationally across the fire sector, as well as in the wider public sector and commercial spheres.

Portfolio

2.20 The proposed new Directorate structure establishes a Portfolio team delivering portfolio management, an enhanced Programme Management Office (PMO) and Business Change capabilities that will support the implementation and embedding of LFB’s new approach to deliver its transformational change. This includes the current 2022-23 delivery plan, and LFB’s strategic aims and priorities set out in the CRMP.

2.21 Taking a Portfolio approach will enable LFB to effectively prioritise its change and improvement activities, taking into account its business as usual activities. It will also help to focus on an outcome and benefits-based approach, through the adherence to programme and change-management principles. Ultimately, this should result in efficiencies in delivery by maintaining a focus on the highest-priority activities and enabling more effective use of resources. In order to do this, LFB must also become better at defining, managing and delivering the benefits required from LFB’s chosen projects and programmes.

2.22 A portfolio approach will enable to LFB to provide higher-level, more focused and better-quality reporting against LFB’s improvement and transformation activities. This will help to improve confidence and transparency, both internally and externally, in the improvements we are delivering.

2.23 The following illustration provides a summary of the drivers, outcomes and benefits arising from the establishment of the Portfolio and Business Change capabilities.

2.24 The proposal includes an adequately resourced and high-calibre performance improvement team to enable the organisation to move from a focus on external reporting to development of a sophisticated performance management and continuous improvement culture. This will include development of internal performance measures that directly link to the aims of the CRMP and designing dynamic dashboards and reports to enable managers to assess: whether they are making the improvements they expect to make; and whether those improvements are having the impact they expect on the overall outcome. LFB will be strengthening the governance of performance through its board structures and supporting LFB in development of a “golden thread” of information from the front line to the LFC. Performance will move to a monthly monitoring cycle using statistical process control charts to identify and address areas of underperformance across the organisation, whilst identifying and sharing areas of good practice.

2.25 The establishment of a dedicated continuous improvement capability will enable the deployment of tools and techniques to empower anyone within the organisation to make change in their own areas. The role will be focused on developing a continuous improvement strategy that will outline how we deliver this at scale. This will include developing new training materials, running workshops, upskilling existing staff to become local improvement champions, and providing general support for embedding a continuous improvement culture.

Grenfell Tower Inquiry interface and support

2.26 For the past four years, LFB has undertaken a comprehensive internal safety and learning investigation into the Grenfell Tower fire. This seeks to identify organisational learning to inform improvements that deliver increased public and firefighter safety. This work, led by an Assistant Commissioner, is now coming to a conclusion; the Grenfell Tower Investigation and Review Team (GTIRT) was wound down at the end of 2021.

2.27 The previous Assistant Commissioner leading the GTIRT has been re-employed into a part-time non-operational Top Management Group post for up to three years.

2.28 The creation of this post and re-employment will enable LFB to retain and use the comprehensive knowledge accrued since June 2017 to support subsequent stages of the GTI, the criminal investigation and any resulting prosecution; and to maintain a consistent approach to the monitoring and assurance of improvement actions to enhance public and firefighter safety.

Service Delivery Assurance

2.29 The Service Delivery Assurance function will provide assurance within the second line of defence, and will be undertaken by staff separate from those responsible for the delivery of the service.

2.30 Currently in scope is all activity that delivers a service to (and interacts with) the community – now and in the future. This includes activities defined in the ‘service catalogue’ and will change in line with the CRMP.

2.31 The function works within LFB’s wider enterprise assurance framework. Its focus is service delivery, and its principal aim is to assure controls and outcomes, and support service delivery, to deliver the best possible service to the community. It will provide the same benefits as detailed within section two regarding the enterprise assurance framework.

2.32 The function will follow the same assurance principles as agreed within the enterprise assurance framework; and both functions will work closely together to promote and improve assurance practices across LFB. It will also take account of the work delivered/planned by the Independent Operational Assurance Officer.

Costs of new structure

2.33 The cost breakdown of this restructure is outlined in the table below:

*Please note all reserve-funded posts are for two years only. Core posts will require ongoing funding.TMG = Top Management Group staff. This is the most senior level of posts in LFB.FRS = Fire and Rescue Service staff. This refers to staff not deployed in operational roles or in LFB Control.

2.34 The 2022-23 Budget Submission (LFC-0679) included core ongoing growth for transformation of £1,488,000 in 2022-23 and future years funded from the existing transformation budget, with temporary growth of £971,541 for two years (totalling £1,943,082) to be funded from the Transformation Reserve. The temporary element of this growth is required for two years, but is likely to be spent across three financial years and will be funded from the Transformation Reserve. There remains a risk regarding the precise timing of costs whilst the recruitment path for these posts is profiled.

2.35 The additional £11k for subscriptions is required, as the Transformation Directorate pays for both the Chief Fire Officers Association subscription, and the corporate Association of Project Managers subscription. Currently the subscription budget is £56k; therefore an increase is required to cover these subscriptions.

2.36 This report therefore recommends that the total ongoing cost of £1,395,023 is agreed, for which funding was included in LFB’s final budget report for 2022-23. This report also recommends that temporary expenditure is agreed for a two-year period of £971,541 annually, at a total cost of £1,943,082, to be funded from the Transformation Reserve.

2.37 In the current climate, transformation for LFB is not a choice but a necessity. Achieving transformation will require building capacity and capability within the directorate. Whilst the cost associated with this is significant, research shows that transformation does come at a cost. This business case also illustrates the benefits that can be delivered as a result of this transformation which, without the additional funding, will not be realised.

3.1 The LFC and the Deputy Mayor for Fire and Resilience are required to have due regard to the Public Sector Equality Duty (section 149 of the Equality Act 2010) when taking decisions. This in broad terms involves understanding the potential impact of policy and decisions on different people, taking this into account and then evidencing how decisions were reached.

3.2 It is important to note that consideration of the Public Sector Equality Duty is not a one-off task. The duty must be fulfilled before taking a decision, at the time of taking a decision, and after the decision has been taken.

3.3 The protected characteristics are: age, disability, gender reassignment, pregnancy and maternity, marriage and civil partnership (but only in respect of the requirements to have due regard to the need to eliminate discrimination), race (ethnic or national origins, colour or nationality), religion or belief (including lack of belief), sex, and sexual orientation.

3.4 The Public Sector Equality Duty requires decision-takers in the exercise of all their functions, to have due regard to the need to:

• eliminate discrimination, harassment and victimisation and other prohibited conduct

• advance equality of opportunity between people who share a relevant protected characteristic and persons who do not share it

• foster good relations between people who share a relevant protected characteristic and persons who do not share it.

Having due regard to the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to:

• remove or minimise disadvantages suffered by persons who share a relevant protected characteristic where those disadvantages are connected to that characteristic

• take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of persons who do not share it

• encourage persons who share a relevant protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.

3.5 The steps involved in meeting the needs of disabled persons that are different from the needs of persons who are not disabled include, in particular, steps to take account of disabled persons’ disabilities.

3.6 Having due regard to the need to foster good relations between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to:

• tackle prejudice

• promote understanding.

3.7 A full Equality Impact Assessment was undertaken and is included as Appendix 3 to the appended report LFC-0709. The assessment found there was a positive impact on all groups with protected characteristics as defined by the Equality Act.

Conflicts of interest

4.1 There are no conflicts of interest to declare from those involved in the drafting or clearance of this decision.

5.1 This report recommends that the new structure for the Transformation Directorate is agreed at an ongoing cost of £1,395,023 from the 2022-23 financial year. The report also recommends that additional annual funding £971,541 for two years (totalling £1,943,082), to be spent over three financial years, is agreed to be funded from LFC’s Transformation Reserve. The Transformation Reserve had a balance of £3,281,000 as at the end of the 2021-22 financial year, which the recommended draw of £1,943,082 over two years would reduce to £1,337,918.

5.2 The funding for this, and the draw on the transformation reserve, were included in the LFC’s Budget Submission to the Mayor in November 2021 and then subsequently agreed as part of LFB’s final budget report for 2022-23 (LFC-0679). These reports set out the costs and staffing requirements, and what this additional funding will deliver, with £1,488,000 agreed in ongoing funding and a draw on reserves of up to £2,000,000 over two years. The proposed spend in this report represent slight reductions to this: of £93,068 for the ongoing cost, and of £56,928 in the planned draw from reserve. These cost estimates are dependent on the outcome of job evaluations; actual costs may differ, but will be contained within the overall cost envelope proposed.

5.3 The staff cost estimates included in this report were based on 2021-22 staff cost estimates and, as a result, were before the agreement of the 1.5 per cent pay award for FRS staff. The cost of the 2021-22 pay award will be contained within the total funds available set out above, with subsequent pay awards budgeted as part of LFB’s financial estimates for future years. Staff budgets are also be updated annually for pay progression and actual staff costs incurred, and reflected in LFB’s budget estimates for future years.

5.4 The report also sets out an increase in the budget for subscriptions of £11,000 which is included in the estimates above.

5.5 There are no direct financial implications for the GLA.

6.1 Under section 9 of the Policing and Crime Act 2017, the LFC is established as a corporation sole with the Mayor appointing the occupant of that office. Under section 327D of the GLA Act 1999, as amended by the Policing and Crime Act 2017, the Mayor may issue to the LFC specific or general directions as to the manner in which the holder of that office is to exercise his or her functions.

6.2 By direction dated 1 April 2018, the Mayor set out those matters, for which the LFC would require the prior approval of either the Mayor or the Deputy Mayor for Fire and Resilience (the Deputy Mayor). Paragraph (b) of Part 2 of that direction requires the LFC to seek the prior approval of the Deputy Mayor before “[a] commitment to expenditure (capital or revenue) of £150,000 or above as identified in accordance with normal accounting practices…”.

6.3 In accordance with section 5A of the Fire and Rescue Services Act 2004 (FRSA 2004), the LFC, being a “relevant authority”, may do “anything it considers appropriate for the purposes of the carrying- out of any of its functions”.

6.4 Section 1 of the FRSA 2004 states that the LFC is the fire and rescue authority for Greater London. The LFC is also a “best value” authority under the Local Government Act 1999; and must make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness.

6.5 This report builds on the mission, aims and objectives previously approved for the Transformation Directorate and sets out the proposed directorate structure.

6.6 The recommendations in this report relate to the required funding levels to achieve this ambition. The recommendations, if approved, will not prevent the Director from altering the directorate structure, the number of roles or the composition of those roles so long as any changes are undertaken in line with the LFC’s Scheme of Governance, and the LFC’s usual employment and management practices.

6.7 These comments have been adopted from those provided by the LFC’s General Counsel Department in report LFC-0709 to the LFC.

• Appendix 1 – Report LFC-0709y – Transformation Directorate Restructure