Croydon Council’s case study describes how the council developed a benefits realisation model with a delivery partner that gave both partners assurance that outcomes were improving and financial efficiencies were on track. Through confidence factors, risk sharing and strong governance, Croydon has achieved £3.9m indicative savings, with a target savings value of £15m.
Transformation programmes are a key approach to building sustainable adult social care systems. When service delivery partners are involved, introducing governance mechanisms helps ensure accountability for financial and outcomes-based improvements. These mechanisms should be evidence based, risk aware and partnership driven.
The challenge
In September 2023, Croydon Council embarked on a significant programme of work in the adult social care and health directorate to deliver transformation and savings required to enable the ambitions of the council. These include fulfilling its statutory adult social care duties within a sustainable financial model and to support the priorities in the Mayor’s business plan 2022 to 2026. To support the programme, the council approved a two-phase procurement of a strategic delivery partner, eventually contracting Newton.
- Phase 1 (Feb 2024–Mar 2024): an operating model diagnostic.
- Phase 2 (Jul 2024–Dec 2026): design and implement new structures and processes, enabling a sustainable budget and delivery of statutory duties.
Access the procurement documents:
Phase 2 of the programme was planned and resourced to deliver the target savings value (or greater) of £15m identified in phase 1 through an opportunity matrix.
The challenge we faced was establishing an agreed benefits realisation method – one that would allow both the council and Newton to give the strategic assurances that the programme was achieving better outcomes for our residents, and in turn the financial opportunities identified in the opportunity matrix.
To ensure we achieved best value from Newton, there was also a link between the benefits realisation and Newton’s fee (see last section for more detail on this).
The action
Croydon Council and Newton established a fortnightly finance and benefits realisation group. The core task is to provide guidance and recommendations to the programme board on both the measurement and delivery of operational and financial benefits. Attendees include the Croydon and Newton programme managers, finance leads and business analysts.
Confidence factor
For each line of the opportunity matrix, a calculation table was developed, and a confidence factor was a key element of this. This enabled the budget holder and key decision maker for each saving to set a confidence factor of 0–100% based on their professional position on the likelihood of the outcome of the work. For example, a £1m saving opportunity with a 50% confidence factor would mean £500k.
This allowed for variables such as levels of wider partner/provider market engagement, fluctuations in provider market capacity (ie availability of domiciliary care workforce) or the availability of extra care provision to be taken into account.
Assumptions
Aligned to the assumptions already described, additional factors included the differences between planned domiciliary care hours and actual hours delivered. Further consideration was given to the annual cost of care increases (inflation) in the domiciliary care and residential care markets. There are different variables within these, as domiciliary care is more impacted by national living wage increases. Residential care is similarly impacted with inflationary considerations to the building costs.
The outcome
As of May 2025, the programme has delivered indicative savings of £3.9m against the £15m target. These will not be fully assured until the entire programme has moved into the sustainability period and the benefits and realisation group has presented total benefit assurances to the programme board.
Key elements that are supporting the programme include the following:
- The benefits realisation group has formed a strong partnership, with critical challenge embraced and the pursuit of evidence a core value.
- One of the main early learning points was to understand and align on the different financial language used by both partners. Ultimately this has led to high levels of trust.
- CIPFA reviewed the savings methodology, noting there was a reasonable quantification and delivery plan in place.
- Due to the council’s financial situation, Croydon is working with a government-appointed improvement and assurance panel, which includes a director of adult social services. The panel has been presented with the savings method, with no significant concerns raised.
- Overall assurances continue to be presented to the executive mayor and to the corporate management team. The corporate director of adult social care and health, corporate director of resources and section 151 officer are key members of this team.
Reflection
The programme is not due to complete until spring 2026; however, the hard miles have already been covered. Due to the benefits realisation structure that has been developed, it will be known at the earliest possible points if the programme is struggling. If so, governance mechanisms will enable both risk and issue-based decisions to be implemented.
It was important to us that we were able to demonstrate value for money from our partnership with Newton. This was achieved through a ‘risk share’ agreement as follows:
- 100% fee at risk: in phase 2, the partner guaranteed to deliver at least the value of the one-off fee in recurrent, annual financial benefit. If the final benefits totalled less than the value of the one-off fee, the delivery partner would rebate its fees until a 1:1 ratio is achieved. In the worst-case scenario, if nothing was delivered, Croydon would pay nothing (any fees already paid would be rebated in full).
- Capped fee: providing assurance of total financial expenditure from the outset. If circumstances require the delivery partner to put more resources into delivering the target financial benefit than originally planned, this will be done at the delivery partner’s own risk and at no additional expense to Croydon.
Our learnings so far
The confidence factor is critical and an essential element in considering the sensitivity of the benefits and assumptions. It means a person is directly involved and can pass professional judgement on the final output of the methodology.
The benefits method should be tested through the design phase of the programme, only moving to the implementation phase once there is evidence-based sign-off through programme governance, new ways of working are proven and workable, and training, processes and policies are set up to enable sustainability.
Validation of the total benefits should be demonstrated as achieved and sustainable. We validated this over a minimum 12-week sustainability period and required final approval through programme governance.
7 July 2025
Contact information
Mirella Peters
Head of Finance, Adult Social Care and Health
Mirella.peters@croydon.gov.uk
