Case Study – Reducing Mileage Budgets

Since introducing an online, self-service expenses management system to its 14,000-strong workforce in June 2008, Rhondda Cynon Taf County Borough Council has started realising significant savings.

Significant Cashable Savings

Rhondda Cynon Taf’s decision to replace its inefficient, paper-based system with a specialist online expenses management solution has started realising significant savings.

The results from the initial pilot outperformed original expectations, with actual reductions in mileage claims of 7% and the assumption that this could be even more when rolled out across the organisation as a whole,

It also reduced levels of unnecessary overpayment, cut the time it takes to process claims, boosted transparency and ensured policy compliance.

This is part of the organisation’s medium-term financial planning strategy to make efficiency improvements.  These fall in line with recommendations laid out in the Gershon Report for England and the Welsh Assembly Government’s equivalent “Making the Connections” Report, encouraging the public sector to achieve year on year efficiency savings.

As part of this strategy, the local authority introduced a wide range of initiatives, including an e-efficiency scheme to maximise technology and realise financial savings by delivering services, and managing internal processes, online.

Efficiency Study

The organisation already used software from Selima to process paper claims entered onto a central system.  It therefore commissioned them to estimate the cost and time efficiencies that could be made by moving the whole expenses claims process online and using new technology to calculate the shortest route between departure and destination.   

Taking a range of claims and making conservative estimates that each had probably been rounded up to the nearest mile, they calculated that the local authority could make savings of £50,000 per year.  They concluded that this could be achieved by simply providing employees with the tools to work out the distances they travelled more accurately.

These findings, coupled with additional non-cashable efficiencies somewhere in the region of £25,000, which could be achieved if payroll staff no longer had to spend time inputting and checking claims data, was compelling enough for Rhondda Cynon Taf to begin piloting the solution.

Outperforming Expectations

Rhondda Cynon Taf is now beginning to quantify the actual savings it is making since the introduction of the new system, by comparing payments made for the same period in 2007.  Budget savings are expected to be several times higher than originally estimated.

“We know that this has had a far bigger impact than we first thought it would, with much greater savings than we anticipated."
Nick Jones, Service Director (Operational Finance), Rhondda Cynon Taf.

“Now we can see every single journey we’re making at a glance and that’s giving our managers the tools to understand the way their departments are working more clearly.”


Upholding Mileage Policy

Rhondda Cynon Taf’s mileage policy is to reimburse employees for the shortest distance necessary to complete a journey.  But without the tools in place to enable employees to enter their journeys accurately, the organisation suspected that its policy was not being fully complied with.  Instead, it believed the common practice was for employees to claim the distance actually travelled whether it was in accordance with policy or not.  It also believed employees were rounding calculations up to the nearest mile, in most cases purely for convenience.

“We had a policy that we couldn’t effectively enforce because the technology wasn’t there to enable employees or managers to satisfy the rules!”

The need for employees to record their mileage using a milometer has been removed. Now they simply enter their departure and destination points and the technology calculates the shortest route between the two. The solution provides routemapping technology to allow claimants to view the journey on which reimbursement is based, in order to increase transparency and awareness.

By eliminating the practice of rounding mileage claims, the organisation can now enforce its policy of reimbursing claimants for the shortest distance necessary to make a journey.  

A ‘via’ option also enables employees to plot multiple stops on their journey, making the whole process far quicker than it previously was when it involved completing paper forms, to represent multiple and connected journeys.

Transparency & Consistency

Transparency is crucial in making the new system a success in the eyes of users.  Giving your employees the facility to input and track their own expenses claims through the approval and payment processes helps to reassure them that their claims are being handled efficiently.  It is also reducing the number of enquiries from employees chasing payment.

A package of customised rules, built into the technology, ensures all claims comply with policy requirements and are accurate. This means managers don’t have to spend time checking each claim and can concentrate on larger or more complicated claims.

According to Nick Jones, a major benefit of the new technology is the ability to ensure equity and consistency in the organisation’s expenses procedures. Now everyone travelling between the same locations is recompensed with the same amount.

What Next?

“The next stage is particularly exciting in terms of the management information we can extract and use to make sure we’re operating as efficiently as possible.  We want to develop the system so that we can proactively manage all the journeys we make, to ensure they are organised and carried out in the most cost efficient and effective way, and to make sure we’re not duplicating effort.

“Thanks to the new application, we have made our expense handling processes more trans-parent and enforceable, as well as cutting down the time it takes to administer claims, allowing us to monitor our travel activities more closely.”