Taking the talk into action

Despite talking the talk of shared services for years, many councils now appear to have put best intentions into action but a new survey shows that more are embracing the concept in a bit to face a bleak fiscal era, a significant number of councils are still far from the agenda. The survey, conducted by Ipsos Mori on behalf of legal firm Browne Jacobson, found that the majority of local authorities – and more than half in England – are now sharing frontline and back office services, with many reporting back financial rewards and good performance. While councils have previously shown less appetite for sharing frontline services, the research show that an increasing number of areas are now up for grabs from sharing professional and expert staff, management and chief executives, contact centres, forensic services and specialist equiptment such as helicopters. Around 90% of the 150 senior managers contacted by the survey said they planned to target frontline services in the next two years – environmental (70%) and social care (34%) services the two areas most likely to be shared. A previous survey by Browne Jacobson in 2008 found that public managers tended to think only in terms of back office. "We've seen a noticeable sea change in attitudes towards merging frontline services," says Dominic Swift, head of shared services at Browne Jacobson. "The government's austerity bombshell is clearly forcing authorities to look at innovative and radical ways in which to deliver their 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." However, despite the apparent enthusiasm for sharing, there is still scepticism over implementation and one in nine councils still have no shared services arrangements in place. While the vast majority of the survey said they would consider collaborating with private sector organisations and were happy working with other public sector partners, over three quarters feared that though "attractive", arrangements between public organisations would still be "hard to deliver". For those who have been dragging their heels though, time is scarce – the average time it takes to develop develop the skills and knowledge in shared services is estimated at around three years. "Shared services is a seriously attractive option. However, it is not a panacea," says John Tizard, director of the Centre for Public Service Partnerships. Shared service arrangements are also "unlikely to produce major savings in the first year or so," he says, adding that "there will also be transition and possibly procurement costs. Simply aggregating inefficient services or activities will not necessarily reduce costs. To gain the most from shared service arrangements financially it is necessary to underpin them with service and process redesign." A case in point The more evidence, then, the better. And there are some good examples. Bromsgrove district council and Redditch borough council, who have shared a chief executive and management team for four years, have shared services from payroll and procurement to community safety, CCTV and ICT, with plans for more. "Sharing services was our creative and innovative approach to the challenges we saw arising in the near future for the public sector," says Roger Holingworth, Bromsgrove council leader. "Now, in light of the current economic climate, other councils nationally are being urged to follow our example which has already seen us save more than £1.5m across both authorities." Representatives and managers from both councils, including the chief executive, have visited other councils interested in sharing lessons. "This case study demonstrates how far we have come in this project and allows our customers, partners, stakeholders and other councils to follow our story too," Holingworth says. Westminster and Hammersmith & Fulham councils are also planning to save up to £3.1m over three years by merging education services this year. "We certainly don't have the leisure to sit back and reflect," says Rob Whiteman, managing director of Local Government Improvement and Development. "But the decisions are tough. Having already made greater efficiency savings than other parts of the public sector over the last six years, local government does not have any soft options. "Some smaller councils face particular problems that for many key areas of delivery, economies of scale can count." Outsourcing Although 80% of senior managers in the survey said they would consider outsourcing services on a case-by-case basis, this number fell to around a third when considering large scale outsourcing projects. "It's not a panacea or a short cut," says Whiteman. "We also need to recognise the additional social value that can be delivered by small, local voluntary sector providers and not write them out of larger-scale procurements." Tizard agrees that there are pros and cons for councils. Outsourcing could "take a further 20-30% of costs out of the system," he says. Despite the possibility of additional social costs, such as job losses, he says, some local authorities and others are considering this "off-shoring" option.