| | By Joe Bradley
In terms of
approaching a shared
service agreement, there
are different options
being explored by
councils. At a simple
level, authorities can
outsource to a third
party IT supplier, who
can provide the
expertise, technology
and hardware that an
authority lacks in-house
and is unable to source
cost-effectively. An IT
partner can bring
economies of scale,
because its expertise
and resources are shared
across a number of
clients. Outsourcing
back-office processes
such as payroll and IT
help desks creates
back-office savings that
can be translated into
front-line efficiencies
and improvements in
service delivery.
Such economies of
scale can be exploited
further if authorities
work together to jointly
procure technology. Such
partnerships are already
delivering results for
pioneers such as
Lichfield and | |
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| | Staffordshire Moorlands,
who came together to
make dramatic savings in
excess of £700,000 by
undertaking what is
believed to be the first
ICT outsourcing
commissioned jointly by
two councils. The
project has won awards
for its innovative
approach including being
highly commended in the
SOCITM/Solace/Intellect
awards and winning the
accolade of best IT
outsourcing deal 2004’
from the National
Outsourcing Association.
Rita Wilson,
corporate director for
organisational
development at Lichfield
District Council
comments: “The
partnership with
Staffordshire Moorlands
has enabled both
councils to work with a
specialist within IT and
make savings on the
procurement process. IT
is not our core
business, but it is for
our provider Serco
Solutions, so we were
able to get a much more
professional service.
Small district councils | |
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| | have less money to
invest in such projects
and can achieve more if
they work together than
on their own.”
Lichfield and
Staffordshire Moorlands
have also benefited from
additional funding from
the Office of the Deputy
Prime Minister (ODPM),
which is recognising and
rewarding such projects.
The ODPM is also keen to
see more cross-selling
of services between
councils. The Local
Government Act of 2003
gives authorities the
power to charge other
authorities for services
(at cost) and to trade
services in a commercial
basis where an authority
could make a profit.
By granting the power
to trade services, the
Government aims to
encourage local
authorities to extend
and improve the range of
services they offer.
Successful local
authorities will be
those that develop their
own areas of best
practice, whilst
‘importing’ delivery
from their peers in | |
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| | other areas.
Collaborative working
will only be successful
if each party feels they
are winning. All
stakeholders need to be
clear on goals,
processes, demands and
outcomes. Effective
communication is crucial
to achieving the
co-operation and support
needed to make it work –
from third parties to
employees.
But as with any
partnership, process and
contractual agreements
will achieve little
without trust and
understanding in a
relationship. Trust,
openness and
communication are
absolutely vital to the
success of a shared
services project –
whether it’s a joint
procurement project or
an exchange or trade of
services from one
council to another.
Those authorities
embarking on shared
service initiatives can
learn from/build upon
the successes of others.
There has been a step
change in the number of | |
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| | authorities undertaking
such projects, and the
achievements of councils
such as Lichfield and
Staffordshire Moorlands
are being replicated
across the country. As
Rita Wilson comments:
“When I joined local
government, the
suggestion that we could
work together with some
of our neighbours would
have been met with
horror. Now not only is
it accepted, it is
expected.”
But the key challenge
remains the overarching
need to wring out the
cost savings demanded by
the Spending Review.
Many authorities have
made the necessary
changes required achieve
a 2.5% reduction in
spending in the first
year. But in the
aftermath of the initial
savings, it will become
harder and harder to
find 2.5% year on year,
and that pressure will
maintain the impetus for
new and inventive way of
collaborative working
for us all.
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