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Shared services reborn?
19 October 2010
With the looming prospect of the biggest ever cuts to public
sector budgets you don’t need us to tell you that your services
will need to become more transparent, more effective and more
efficiently delivered. The shared services agenda is not new but it
is worth considering its role in helping you meet the financial
challenges ahead, whether the financial climate will reinvigorate
the shared services agenda and provide new impetus for innovative
and collaborative approaches to the delivery of our public
services. The need to make public sector spending cuts already
appears to be driving a new wave of radically different shared
services schemes; we are seeing new projects announced on a weekly
basis. For example, earlier this month members at Babergh DC and
Mid Suffolk DC approved ground-breaking plans to merge their local
authorities into a single district by 2013.
In April 2008 we published the findings of our shared services
survey, reporting on the views of over 150 senior managers drawn
from right across the public sector. Whilst our survey identified
that an overwhelming majority of organisations (97% of respondents)
were taking part in some form of shared services, it did suggest
that there were many untapped opportunities. The majority of
activity appeared to relate to 'back-office' rather than
'front-line' services.
It is interesting to re-consider the barriers to implementation
that were identified. Our survey found that shared services were
often dismissed as time consuming, expensive and difficult to
implement.
Intuitively, shared services make a great deal of good sense but
history tells us that there is significant scepticism across the
public sector about the ability to implement an effective shared
services project.
We consider below two examples of local authorities coming
together to deliver better front-line services more efficiently
than the predecessor service. Importantly, these authorities were
able to overcome the barriers to implementation and demonstrate
that it is possible to deliver service improvement and efficiencies
at the same time during a recession.
Waste Collection Partnership
Tamworth BC and Lichfield DC have come together using an
administrative arrangement under Section 101 Local Government Act
1972 to deliver a joint waste collection service. Andrew
Barratt of Tamworth Borough Council commented:
“Having clear priority and commitment at the highest
Political and Management level from both Authorities was a critical
part of delivering the joint service project and this support
enabled all elements identified in the proof of concept study be
delivered, both within a very tight timescale and achieving the
anticipated efficiencies.
Furthermore, being absolutely clear on the end result from
the start was vital in driving the project, especially as the route
to achieving some elements was not always apparent, having this
clear view ensured that both Authorities were able to remain
focussed on the end result”
Enhancing Partnership Philosophy
Derbyshire CC agreed to provide facility management and property
services to two other local authorities. Again, the arrangement was
delivered quickly utilising an administrative arrangement under
Section 101 Local Government Act 1972.
Clive Rhodes, Head of Property at Staffordshire Moorlands and
High Peak Borough Councils comments on the success of the
arrangement:
“Derbyshire provide a property management service which has
enabled us to secure on-going efficiency savings. I have been
delighted with the service we have received and the commitment
shown in the delivery of a diverse range of services”.
Steve Gerrard, Deputy Director of Property at Derbyshire County
Council, puts this success down to the culture of the partners and
explains:
“… a successful partnership alliance depends on shared
commitment from Officers at the highest level with the same desire
and objective to deliver the highest quality value for money
service. Getting past the barrier of “turkey’s voting for
Christmas” and building trust was a challenge. Transparency from
both parties has resulted in significant benefits for both
Authorities and we look forward to building on the success of this
alliance by continuing to add value during the lifetime of the
contract.”
The key features common to these examples include:
- the discharge of various functions delegated under Section 101
– in the case of Tamworth and Lichfield the functions are delegated
to a joint committee
- employees TUPE transfer to 'host' authority
- the authorities provide services to each other under the Local
Authorities Goods and Services Act 1970
- day to day operations managed by designated officers
- no separate legal entity created – the authorities remained
responsible for the discharge of their functions to their
residents
- future flexibility in terms of range of services to be provided
by enlarged teams
Both of these projects were delivered without significant legal
and other consultancy costs and resulted in the efficient delivery
of front-line services and real savings to the authorities.
Keith Gordon, Assistant Director Efficiency & Delivery at
Improvement & Efficiency West Midlands, commented on the
challenges facing authorities:
“As the financial pressures will inevitably increase
following the outcome of the Government’s spending review, the
challenge will be for Councils to face the shared service and
collaboration opportunities enthusiastically and positively at far
more pace and radical transformation than seen to date. The days
where control lay within one Council and the risks with the private
sector have long since gone. If Councils wish to flourish and
continue to respond to customers needs in this new challenging
financial environment, they will need to develop partnerships and
new operating models both with other public sector organisations
and equally importantly with the private sector that put customers
at the forefront of the agenda. This can only be achieved through
new ways of service design, the reduction of unnecessary waste and
duplication, managing risk more effectively and commissioning
expert legal advice to ensure any new shared service can be
delivered legally and effectively which meets the needs and
aspirations of all key stakeholders.”
talk to us
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Dominic Swift
0161 242 1303
Partner and Head of Public sector and Property
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