LONDON BOROUGH OF NEWHAM OVERVIEW AND SCRUTINY ...

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1. INTRODUCTION
LONDON BOROUGH OF NEWHAM
OVERVIEW AND SCRUTINY COMMITTEE
25th September, 2007
COST OF IMPLEMENTING PERICLES
GRAHAM HISHMURGH – INTERIM HEAD OF COUNCIL
TAX & BENEFITS
1.1. This report is in response to a request that the Head of Benefits and Customer Services advise all
Member of the Overview and Scrutiny Committee of the total cost of changing over from the HBIS
system to the new ICT system, Pericles.
2. RECOMMENDATIONS
(A) Members are asked to note the report.
3. REPORT
3.1 At the meeting of the Overview & Scrutiny Committee held on 22 nd May Members asked the
Head of Benefits & Customer Services to provide the total cost of changing over from HBIS to
the new ICT system Pericles.
3.2 The decision to migrate to Pericles was taken because the existing system was no longer fit
for purpose and was facing imminent de-commissioning by the software provider. Pericles
controls the collection of £106 million (gross) per annum Council Tax and £260 million in
benefit payments.
3.3 Council Tax & Benefits believe that the new system will enable them to deliver a better service,
with increased opportunities to work remotely during home visits etc. and provide information
to customers over the website.
3.4 Despite a very difficult implementation period, CT&B are now beginning to realise the benefits
- these not only include opportunities to improve performance, but also reduced annual
maintenance and licensing costs. It is estimated that the move to Pericles will save in the
region of £250K per year in running costs.
3.5 Since the completion of the migration in March 2007, the Service is already seeing an
improvement in CT collection and a reduction in HB processing times. This is in part due to the
improved functionality of the new system.
3.6 The total cost of implementation comprises the actual cost of acquiring and running the system
plus the cost of moving the Housing & Council Tax Benefit caseload from HBIS to Pericles.
3.7 Members are already aware of the rationale behind the decision to manually transfer the
caseload and this paper will therefore not revisit the issues.
Cost of acquiring the system

3.8 The Pericles system was acquired as a system that would not only be used to assess and pay
claims for Housing & Council Tax benefit, but that would also be used to manage the Council
Tax accounts for the 94413 dwellings within the Borough.
3.9 As such, the hardware and software that was purchased was specified as being capable of
coping with both aspects. Therefore the cost attributable to Housing Benefits is deemed as
50% of the total cost.
3.10 The following costs relate to the system implementation:
Area Cost
Hardware 267,783.55
Software 156,033.23
External Support 119,500.00
ICT Development - Staff Costs 229,099.31
Other Costs 13,844.92
Refunds from Anite -206,000.00
Total 580,261.01
3.11 Therefore the amount attributable to the Benefits Service is £290K
Housing Benefits
3.12 The cost for the Benefit Service relating to Training, Rekeying, Data Cleansing etc., is
estimated to be £989K.
3.13 The total cost for the Benefit Service is therefore £1.2 million as at 31 st March 2007.
Costs in 2007/08
3.14 The Benefit Service entered 2007/08 with a document backlog of over 12000. Agency staff
were retained for 4 months to help clear this backlog. It could be argued that the backlog was
linked to the implementation of Pericles, in which case a further £233K should be added to the
£1.2 million quoted above.
Originator of Report: Marion Long – Finance Manager
Date: 7/9/07
Tel. No. 02084305909
E-Mail Address: Marion.long@newham.gov.uk
Local Government (Access to Information) Act, 1985
Background papers used in preparing this report:
Manager's Name Graham Hishmurgh
Manager's Title Interim Head of Council Tax & Benefits