Email
Local authority mottos range from impressive if little understood homilies in Latin to sub David Brent verbiage. Perhaps, as moves to share services with other authorities gathers pace, only one motto is needed for all: "Let's get it on".
For, like a beleaguered band of brothers, local authorities are seeking solace in each other's arms in efforts to cut costs while maintaining services. For example, the royal borough of Kensington & Chelsea and Hammersmith and Fulham, and Westminster councils are seeking to merge many services. An spokesman at Kensington and Chelsea said those for families and children, adult social care, environmental and corporate services are "under consideration".
A major issue for such boroughs is how to manage the merging process, who to partner with and deliver savings.
"We have seen an acceleration in serious discussions between and amongst local authorities and other parts of the public sector, the third sector and some private providers about sharing services," said Siobhan Coughlan, programme manager, services transformation at Local Government Improvement and Development.
She adds that local authorities looking to share services need to be "very clear up front about what they are trying to achieve – they should set out their vision and their objectives. They should put solid governance in place so people know who's leading and where to."
Deal breakers
Gillian Hibberd, strategic director resources and business transformation at Buckinghamshire county council, and past president of the Public Sector People Managers' Association, said local authorities looking to merge services need to agree governance from the outset. "It's about who's going to run the project, who's making the decisions, issues around vetoes and dealing with differences. You have to be clear on boundaries – identifying no-go areas, deal breakers and so on."
Like other councils, Buckinghamshire is looking to cut costs while maintaining services. For example Hibberd said it plans to reduce dramatically its IT spend – "by millions" – over the next three years by basing its IT provision on cloud computing – in other words IT as a utility. "The shift to cloud has opened up opportunities," she said.
The plan, if undertaken, will see Bucks' IT staffing cut from about 150 now to 16 or so over the next three years.
The London boroughs of Newham and Havering have taken a different route: they are sharing IT services. Speaking at the recent SOCITM (Society of public sector IT managers) annual conference, Geoff Connell, divisional director ICT services at the two East London councils, said: "For shared services to work it must be based on trust. It is critical that both organisations share an IT strategy and sell a vision to chief executives, service heads, and all staff."
Councils' senior teams must also know where they are, in terms of performance and costs, before they set off down the shared/merged services road. Cheshire Shared Services (CSS) was formed in April 2009 to provide 30 or so services to Cheshire West and Chester, and Cheshire East councils, which were formed out of relevant arms of Cheshire county council and six former district councils. Initially it employed 420 staff, now reduced to about 220.
Andy Heys, interim head of ICT at CSS told the SOCITM annual conference that councils looking to merge services must measure baseline performance before services are shared or "you will never know how much has been saved".
This is echoed by Iain Hasdell, partner and UK head of local and regional government at KPMG, who stresses the importance of assessing costs before embarking on service mergers. "Another huge challenge is for councils to understand their unit costs, often for the first time. There is no real business case or rationale to pursue this agenda (merging services) unless it delivers better outcomes at lower cost - in a way that is not achievable through quicker equally sustainable routes. Unless councils know their starting point on unit costs across their business it is massively difficult to assess optimal ways forward."
Of course, local authorities may look for alternatives more radical than merging or sharing services. For example, Southwest One is a joint ICT venture between Somerset county council, Avon Police, Taunton Deane district council and IBM. Apart from providing ICT services to its partners, it sells them to other parties.
This has proved difficult and for the year ended December 31 2009 it made a pre-tax loss of £16.5m on revenues of £35m. Chairman Sir James Tidmarsh said the loss reflects the fact that "ventures like these require up front investment in the early stages as major new systems and working practices are introduced and implemented."
The venture illustrates the risks local authorities can run when they set out to cut costs by taking radical action. But it seems nothing can be ruled in or out when it comes to merging, sharing and outsourcing services to cope with the budget cuts that followed the autumn spending review.
Coughlan said "nothing is impossible" in that scenario and she expects back office services such as IT, HR, and finance to be likely early candidates for merging or sharing. In Hibberd's view there's "lots more scope for mergers and collaboration. We're at the tip of the iceberg."
Hasdell said councils should "think radically about who their potential partners for this could be across the public, private and third sectors - and not constrain themselves in their thinking. They should prioritise for sharing with others those services that will deliver the most return on the investment required to make it happen as the real cash costs of implementation are usually seriously underestimated."
These processes will lead to the merging of senior teams and issues about democratic accountabilities and responsibilities at the local level. They even point to the mergers of neighbouring authorities over time though that would require legislation.
That could give rise to some more motto making. Anyone for: "We're all in this together"?
From Bubb's Blog
From Flip Chart Fairy Tales
;
Comments