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Granting the Future from EY.

Tim Smith

Hello and welcome to Granting the Future, a new podcast series from EY for grant and public fund managers around the world.

I'm your host, Tim Smith, and each episode we’ll be sharing expert insight about transforming the grants process to overcome challenges and meet citizens’ needs.

Now this time, our focus is on how to achieve the best possible outcomes throughout the lifecycle of a grant. And joining me from Defra to discuss that — the UK government’s Department for Environment, Food and Rural Affairs — is Senior Civil Servant and Head of Defra’s Group Grants Hub , Michael Cooper. Michael, welcome to the podcast, very nice to have you here. Thank you for joining us.

Michael Cooper

Hello, thank you for having me.

Smith

And from EY, Matt Wilson, EMEIA Grants and Relief Funds Management Leader. Matt, hello, welcome to you as well.

Matt Wilson

Hi Tim, great to be here, thank you for having me.

Smith

Now, Defra are responsible for improving as protecting the UK’s environment. Amongst their aims are to grow a green economy, sustain rural communities and support the UK’s food, farming and fishing industries. They have over 120 grant schemes worth around £3 billion a year. So Michael, to start with, how has Defra’s portfolio of grant spend changed since the UK left the European Union?

Cooper

The UK leaving the EU has led to a big transformation in our grants portfolio. So, we had a fairly stable portfolio of grants dictated by mainly the EU’s common agricultural policy. We are transitioning to a new world, with domestically funded grants delivering more complex policy objectives. So that’s creating a lot of challenges for the department in terms of managing that process.

Smith

Is the difference between the EU grants formula compared to the UK set of schemes now, is it bigger than you expected? Has it been a more difficult transition?

Cooper

It hasn’t been unexpected, but it certainly has led to change across the board in terms of the nature of the schemes, in terms of the complexity of the schemes. So, we’ve had to adapt to that new landscape.

Smith

Matt, let me bring you on this subject then. What challenges do you think have these changes presented?

Wilson

I think Michael has probably hit the nail on the head in that the complexity of the new schemes — and these schemes are inherently more complex than their predecessors, they’re more ambitious — is the driver of some key areas of challenge. So for instance, with a greater need for evidence-based eligibility and monitoring regimes, that increases the risk profile of the scheme and increases Defra’s exposure to fraud and error risk. So it’s really important that Defra is able to create a clear set of guidance, a user-friendly journey, and really take customers with them.

I think the portfolio of schemes that Defra are embarking on at present are hugely ambitious. I think the way that Michael and the team are grasping this opportunity to drive a step change in the operating model and really make the best use of emerging technology, transform the entire operating model to a position that is not only fit for purpose for this future portfolio but is really maximizing the outcomes of these ambitious policy areas and minimizing risk, is a really great opportunity for the department, and when looking at the progress they’ve made so far, no doubt that the challenges we’re talking about will be overcome.

Smith

Michael, the Grants Hub that you head up is part of Defra’s transformation journey. How are Defra developing a new delivery framework and transforming the operating model to meet new challenges?

Cooper

Well, I think in the past we’ve had individual schemes with close working between policy and delivering teams but little joining up at a Defra group level. As you say, our first step has been to create a central Grants Hub as a center of excellence to provide advice and assurance and management information, and to be able to join up thinking around individual schemes. So, that’s both at policy and delivery level.

So, what we are now working on is the future operating model for grants management, looking ahead to the next three and five years, and how that might change and how we might deliver benefits around all of those things we’ve just been talking about: so, the customer experience, the efficiency of administration, the regularity of the expenditure, and of course ultimately, the delivery of the policy objectives.

Smith

Now Defra’s grants fund many different types of recipients against a backdrop of ever-changing grants landscapes. How are you evolving the end-user journey so that beneficiaries have a satisfactory outcome?

Cooper

Certainly, customers are customers and, as you say, there’s a wide variety of them. They want to be paid promptly. They want to be paid accurately. They want a good user journey. They want joining-up between different delivery bodies. So, those are all of the kind of issues that we are looking to deliver through our new operating model. For example, joined-up customer data. Joined-up customer portals. User research in terms of how customers interact with our services. Ideally, it should be something they can use themselves rather than have to get an agent to advise on.

Obviously, our schemes are quite complex in many cases, but there are techniques in which we can automate the process for customers to make their experience better.

Smith

And Matt, coming back to you, you’re clearly optimistic for the future, but more broadly, what do you think will be the key benefits from the transformation of Defra’s operating model?

Wilson

Well firstly, maximizing outcomes, and this is clearly critical for any grant-making department, and I see two key routes through which Defra will achieve this. Firstly, at a macro level, Defra has the opportunity to define the right KPIs, the right key performance indicators, on each grant scheme across that portfolio. Bring all of that data together, and then look across the full portfolio to really make insight-led decisions on how to maximize the policy impact of these funds.

At a micro level, Defra has the opportunity to get the monitoring regime right, and perhaps use more innovative technology, remote monitoring technology for instance, to make sure that, for each individual grant project, we’re maximizing the outcome of each pound spent and we're ensuring that that grant project delivers the outcomes expected.

The second piece for me would be minimizing risk and managing risk effectively. So through defining a rigorous control framework that’s proportionate and rightsized to the grant schemes within the portfolio, and again using automated technology to automate controls where possible, increasing the coverage of those controls, shortening the feedback loop, reducing the propensity for human error, we can move to a position where we’re really effectively managing risk.

Third for me would be the customer journey. We touched on this somewhat to date, but making it as easy and straightforward for customers to engage with the system, understand what they’re eligible for and apply for funding in a really streamlined, user-friendly manner. And finally increasing efficiency. So through streamlining our processes, through realizing economies of scale, and through again using technology, making the best use of intelligent automation, this means we can really spend time on the value-add activities providing the value-add advice to customers and really improving that user journey.

Smith

And Matt, you mentioned technology there — the application of technology in the grants process clearly a recurring theme in this series, not surprisingly. Just go into slightly more detail if you can with regard to how the use of data and innovative tech can help Defra in the agricultural grants space?

Wilson

Sure, absolutely. Well, I think I touched on a few of the fundamental functionalities and benefits of technology that are absolutely applicable to Defra. And actually, applicable to pretty much all grant-making bodies working in a number of different policy areas.

So firstly, using intelligent automation to reduce the manual burden, to increase the pace of delivery and also to improve the coverage of controls. Creating single source of the truth databases that run across the whole departmental portfolio that enable us to make really insightful data-led decisions and also improve our risk-screening approach. And from an applicant perspective, there are huge benefits of technology. We’re looking at creating a single front door for applicants that’s enabled with chatbots, mobile accessibility, and a really user-friendly approach that removes the manual burden for our applicants.

But you’re absolutely right, there are a number of really exciting areas of innovation in the agricultural world that are especially relevant for Defra and will really enable us to improve our tech-enabled agricultural grants management approach. We’re looking at the use of satellite imagery and geospatial data to really enable a remote monitoring approach. We are also looking at drone footage, Internet of Things using remote sensor monitoring to move to a position whereby Defra has a complete coverage of controls across land parcels within the country, but from a user perspective, it means we’re moving away from burdensome physical field inspections and moving towards a position where it’s more of a remote light-touch continual feedback loop throughout the year.

So some really exciting things happening in this space, and actually Michael’s a bit of a guru in some of the AgriTech, so possibly a good one to bring him on.

Smith

Well, I was going to say Michael, clearly technology ever-changing, ever-advancing and ever-more important. I guess you’d agree with much of what Matt said there?

Cooper

Yes absolutely. I think it’s one of the biggest changes that I’ve seen in my career over the last 30 years, which is the way in which technology has changed. So, as Matt says, for our land-based schemes, we use satellite imagery, but it’s not just imagery, it's the algorithms that sit behind that which tell you what’s happening on the ground in terms of the landscape features, the management activities on the land — even things like soil condition can be derived through machine learning applied to satellite imagery.

And of course, as Matt says, there are other technologies, so Internet of Things — geotagged photos is another good example where the customer can have an app on their mobile, they can take photographs to provide evidence of the actions they’ve undertaken and automatically upload that. And the app will tell them exactly which spot to take the photo in and which direction they need to be pointing at. So, all of these technologies make it easier for the customer but also provides Defra with the information it needs and the assurance it needs.

Smith

Finally, a question to you both: How do you best harness a full operating model approach throughout the grants process to achieve successful outcomes? Michael, let me ask you that first.

Cooper

It could be organizational, it could be in terms of technology. Certainly, I think data and common processes are key for any operating model. So, we are in the early stages of our transformation program at the moment. I suspect it will be an iterative process over a number of years, and there’s a number of different lenses: We can look at it through customer types, through particular parts of the grants lifecycle, through different elements of the operating model. So, it’s a bit like 3D chess really, trying to determine which is the best permutation, but we’re having a very good engagement with policy and delivery colleagues across the Defra group, so I think it’s very exciting in terms of what we could potentially achieve.

Smith

And Matt, how do you best harness a full operating model approach throughout this process to achieve successful outcomes for everybody?

Wilson

So firstly, having a really clear vision for the future. Secondly, getting the right stakeholder buy-in and the right consensus around that clear single vision for where we want to be in five years’ time. Being really clear on our requirements, so having a really clear view across the different customer segments; what are the requirements for the different grant schemes that we are managing and how can we build a future operating model to best deliver against those requirements?

But I think Tim, actually, without being too smart here, the answer actually is somewhat in the question. The approach that Defra are taking to treat this as a full operating model transformation that covers organization, governance, people, process, control, data, technology, and looks at all elements of the operating model in turn and transforms that operating model as a whole to reach that future vision, is by far the best way to achieve a successful outcome and by far a preferable route for a department undergoing this level of change versus taking a series of more tactical interventions, perhaps looking at technology in isolation or data in isolation.

So I think absolutely the full operating model transformation that Defra, and a number of other departments undergoing similar changes in their grant-making landscape, are seeking to undertake is the right way to get to the end result that we are seeking here.

Smith

Okay, very interesting stuff. Thank you very much indeed to both of you for taking part. It’s been a valuable and a fascinating podcast. I think we could have spoken for much longer, but we have to leave it there. Michael, thank you very much indeed to you for joining us. I hope you enjoyed that.

Cooper

Thank you very much indeed, Tim. It was a pleasure.

Smith

And Matt, thank you for joining us as well.

Wilson

Thank you very much, Tim. I appreciate it.

Smith

Alright — do join us again soon when we’ll continue to look at transforming the grants process. And please subscribe to this series so you won’t miss an episode.

For now, though, from me, Tim Smith, thanks for listening and goodbye.

Jingle

Granting the Future — back soon.

 

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