Share if you dare: how to make shared services work

When South Oxfordshire and Vale of White Horse district councils started sharing services, their shared staff amounted to one man. But the fact that he was the chief executive of both authorities may help explain why, just three years down the line, they have gone on to integrate most of their work. The only areas that still function separately are those that operate on different IT systems, such as development, and even here plans are afoot to bring them together. "There isn't any in-principle objection to bringing them together," says David Buckley, the joint chief executive whose appointment three years ago kick-started the process. "You can imagine sharing pretty much anything if there is a will – and the IT supports it." According to communities secretary Eric Pickles, shared services is one of the key ways councils should look to save money , while analysis published by the Local Government Association in March identified 200 shared services projects already on the go, estimating the savings at hundreds of millions of pounds over the next decade. Much of the early emphasis has been on sharing back-office functions, but with budgets coming under increasing strain, councils are starting to look at how far they can push the policy. At South Oxfordshire and Vale of White Horse the appetite for co-operation is now extending to services previously thought unsuitable for sharing. "Housing can be a sensitive subject and it was felt it was not an area we could share," says Buckley. "But we have shown that even where there is a different approach, that doesn't preclude the services being jointly run." He estimates that joint working has helped save about £4m a year on a combined budget between the two authorities of £30m, although he admits that some efficiencies would have been made anyway. But he warns that sharing carries its own risks: using it as a blunt tool to cut staff numbers can come to the detriment of good service provision, while a more fundamental danger is that the partner councils could fall out. Buckley and his management team went to great lengths to make it clear to elected members that, once they started sharing services, there was no going back. "We're never going to be able to unpick it all," he says. Sharing child services So far the process has gone smoothly, although it helps that historically both councils have outsourced much of their work. But in south-west London, two councils are looking at a partnership that is very much on the frontline. Richmond and Kingston councils are in talks to establish a joint children's service, setting up an arm's-length management company to run services including fostering, adoption, special educational needs provision and school improvement teams. A business case is expected to go before councillors at both authorities in November. Duncan Clark, director of learning and children's services at Kingston, says it would save each authority an estimated £500,000-£750,000 a year, as well as enabling them to employ more specialist staff and get better value in procurement. Clark says similar demographics across the two boroughs make their respective children's services a good fit, but acknowledges that their high-profile nature means there is an increased emphasis on making sure there is no doubt over who is responsible for what. "The accountability and governance and quality assurance have to be crystal clear," he says. Richmond is no stranger to sharing, already looking at pooling its legal service with Merton , and its HR and audit functions with Kingston, but assistant director for commissioning Mandy Skinner admits this new partnership is of a different order. "In terms of comparing it with back office functions, this is pretty heavy duty," she says. "We have to be mindful that what we do does not compromise quality at all." The result of all this sharing would be an "incredibly complicated tapestry" she says, that has the potential to change the face of local councils. "Local government is not going to look the same again," she adds. Reaching the limits? But there are limits to this openness to share: Richmond has ruled out sharing either its democratic services or its customer service departments, at least for now. "We want to make sure we have a grip on our conversation with customers," Skinner says. And sharing frontline services is a step too far for some. Salford city council is looking at a joint legal department with neighbouring Manchester, and is also considering sharing IT and HR functions with other Greater Manchester authorities. But council leader John Merry believes it is important for the council to retain clear control over safeguarding young people, for example. "I don't think the public are too worried about where the council gets its IT advice from or who does its payroll, but for an awful lot of frontline services we need to be clear what our policies are," he says. Nor is everybody an enthusiast for joint working. Stephen Hughes, chief executive of Birmingham city council , says sharing services with other councils is low down his priority list. In part, this is a reflection of the authority's size. With a turnover of £3.6bn Birmingham already benefits from economies of scale. And with a total back office spend of £120m a year dwarfed by his three-year savings target of £330m, he is sceptical of the benefits of sharing. "It sounds like a no-brainer and everyone says it is the answer to all our problems, but in practice I don't think it is," he says. Instead, Birmingham is looking at working more closely with both the private and other public sector bodies as a way of improving services and making efficiencies. "We are prepared to do it," Hughes says. "But for us, building better relationships with health bodies, police, the third sector, businesses and other organisations is a bigger priority." At South Oxfordshire and Vale of White Horse councils, Buckley recognises the danger of diseconomies of scale once the population gets above a certain size. But he believes that if sharing works with district councils in Oxfordshire, it can work anywhere. "If the principle applies to district councils, it must also apply to other tiers," he says. "What we're doing here is applicable to every council in the country." This content is brought to you by Guardian Professional. 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