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Local authorities look to sharing services as budget cuts start to bite

7 February 2011
Nine out of ten local authorities in England are looking to share front line and back office functions within the next two years following the government’s decision to reduce local government spend, according to a survey of senior local authority managers by Browne Jacobson published today.

Almost two-thirds (65%) will target back office functions and 68% front line services in the next year.

Some 85% of local authorities might also consider outsourcing on a service by service basis whilst 78% would also consider setting up a joint venture with the private sector.

Environmental and social care services are the two most popular areas where senior managers would consider sharing.

Not surprisingly costs savings appear to be the key driver for those considering a move to more shared services, with 63% expecting to save up to 10% of their total budget savings by sharing services in the financial year ending April 2012.

But political and public opposition is seen by 28% of senior managers interviewed as the biggest barrier to delivering shared services in the local government sector. That said 84% of local authorities agreed that the long term rewards of shared services justified the short term pain.

The Ipsos MORI survey for Browne Jacobson interviewed 150 senior local authority managers in England including chief executives, deputy chief executives, chief finance officers and service heads.

It’s a far cry from nearly three years ago when a Browne Jacobson commissioned survey of 178 public sector managers revealed that less than half saw the potential to merge front line services and only 5% saw opportunities of working with the private sector.

Commenting on the results Browne Jacobson’s head of shared services, Dominic Swift, said: “The government’s austerity bombshell is clearly forcing authorities to look at innovative and radical ways in which to deliver their services.

“We can also see a noticeable sea change in attitudes towards merging front line services.

“Councils are starting to think outside the box and previous no-go areas such as the private sector and large scale outsourcing are also back on the agenda.

“With local authorities up and down the country already feeling the financial pinch the next step is to turn the shared services rhetoric into action.”

Download the full report here.

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