The business case for sharing services is indisputable. As every
public servant knows, Sir Peter Gershon’s much vaunted review of
public services recommended, in 2004, annual efficiency savings of
2.5% for 2005-8, rising to 3% for 2008-11. The Gershon review,
along with the Lyons report on local government finance, focussed
on the opportunity to realise improvements by joining up back
office functions. Sir David Varney, Senior Advisor on Service
Transformation, recommended in 2006 that efforts should be made to
save government, citizen and business time and money by integrating
frontline public service delivery.
So four years on how successful has shared services been?
According to the latest statistics the Government states that up to
£23bn in savings after 2004 had already been achieved, surpassing a
target of £21.5 billion. However a major report by Browne Jacobson
Solicitors reveals that public sector bodies are still having to
overcome a series of critical barriers in seeking to reap the full
benefits of shared service initiatives. These include a lack of
available resources, workforce opposition and risk-averse
organisational cultures.
The Shared Services Survey 08 is the result of research carried
out among 178 senior public sector managers in the health, local
authority, social care, education and fire service sectors.
According to the report the primary barrier to implementing shared
services is a lack of adequate resources with two thirds of public
sector managers (65%) concerned about a lack of financial
resources, while 59% identified insufficient manpower.
When asked to define shared services, the vast majority talked
about ‘sharing, collaboration and the pooling of resources’.
Surprisingly only one in four public sector managers (26%) referred
to cost savings and end benefits. When quizzed on who they believe
is the driving force behind shared services, public sector managers
principally identified senior management (77%) and central
government (52%).
The shared services agenda has two overarching aims: to drive
cost efficiencies and improve public service delivery. In May this
year The Treasury launched a further 12-month efficiency drive with
the aim of saving up to £5 billion of public money in addition to
the £30 billion already planned for the current spending review.
This raises an interesting anomaly identified by the research in
that managers appeared far less optimistic about the level of
savings possible compared to government estimates. This is
especially true when financial input of the upfront investment in
IT and resources to implement the changes are considered.
The research also suggests that front line staff and the public
themselves represent only a marginal influence on its development.
Front line workers are seen as a driver of shared services by just
13% of managers, the public by just 10%. This may shed light on the
back office emphasis when it comes to shared services, which the
research reveals.
The risks and barriers highlighted by Browne Jacobson’s research
perhaps go some way to explaining why these targets aren’t being
achieved despite the overall positive views towards the agenda.
However the barriers are not insurmountable. Issues such as mutual
trust and low appetite for perceived risk present challenges which
well planned and widely understood and supported projects.
With such ambitious government efficiency targets in place for
the coming years shared services will remain high on the strategic
agenda for public sector leaders. It also means the pressure on
those tasked with delivering cost efficiencies at a national and
local level has never been greater.
To maintain the momentum, an approach must be developed for the
consolidation of front line services and to develop initiatives
which cross geographical or public sector boundaries. Embracing
partnerships with the private and voluntary sector could also offer
further opportunities and expertise, as well as helping to gain
funding which is so vital to set up.
The shared services agenda would appear to have had a relatively
successful infancy but Browne Jacobson’s research suggests that
many untapped opportunities exist. A bolder approach, and greater
focus on the front line and the demands of citizens, may be
required as we move into the next phase of the public sector
efficiency drive.
To access a full copy of the report go to : www.brownejacobson.com/sharedservices
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