How can local government get it right on shared services?
Experts from councils and industry partners discuss the key benefits and challenges to consider if local authorities are to reap the rewards of sharing services
For the officials and elected members of local government, the concept of shared services is not a new concept, nor an unfamiliar one.
“As far back as 2006, we saw the [government] white paper on Strong and Prosperous Communities highlight the importance of local councils working together with other service providers to meet local needs and to improve service standards,” she adds.
The 14 years since have, indeed, brought many examples of local government – and other parts of the public sector – joining together to share services. There is often a perception that the results have been mixed.
But the most recent data from the Local Government Association shows that the headline figures, at least, represent some impressive outcomes.
As of the end of the 2018/19 year, the LGA reports that councils across England are collectively participating in 626 shared-service arrangements. These have delivered cumulative savings of £1.34bn – some £200m of which was realised in FY19 alone.
Despite such demonstrable success, Auluck presented during the webinar – which was held in association with Dell Boomi – on the topic of ‘making the case’ for shared services.
“The idea of shared services has been around for quite some time,” she says “So, it is interesting to talk about how relevant the idea is at this point in time.”
Auluck adds: “As we recover from the Covid-19 crisis, I think this gives us a good opportunity to think about how we deliver services… and to see if we can make better use of technology – both in terms of how we run local government as an institution and, indeed, how we provide better quality and more effective services to our citizens.”
Year of publication of government's Strong and prosperous communities white paper, which recommended great local government use of shared services
Number of local government shared services partnerships across England in 2018/19, according to the LGA
Cumulative savings delivered by these partnerships - including £200m in FY19 alone
Coventry, Warwickshire, Herefordshire, Solihull, Worcestershire
Local authorities that share the Adoption Central England service
The Coventry councillor – who also serves as associate head of school for enterprise and innovation at the city’s university – says that, before considering a collaborative model, it is important to first understand the “principles that underpin shared services”.
These could include working across boundaries – both geographic or institutional – pooling resources and data to improve services, achieving economies of scale through aggregated procurement, and increasing capability by sharing skills and expertise between organisations.
Even if these core principles are clearly shared by all the parties in question, it is also crucial to reach agreement on various practical considerations before embarking on a partnership.
This includes a clear delineation of responsibilities for exactly how, where, and by whom services will be delivered, funded, and managed. Contingency and liability arrangements in the event of one party pulling out of the partnership must also be put in place upfront, Auluck says.
“A big challenge that often needs to be resolved before setting up a shared-service arrangement is around sovereignty and control: who decides how things are going to move forward?,” she adds. “And it is really important to engage key stakeholders in thinking about why the idea is worth pursuing, and how it is going to add value to the work of each of the partners in the arrangement. Another big factor is clarity of goals, and having a really clear line of sight of what is going to be achieved through the arrangement.”
Karen Kennedy-Milne, principal for local government and healthcare at Boomi, picks out two key issues that need to be addressed before commencing shared services delivery.
The first of these is setting out clear and measurable models for costs and performance – including a baseline against which progress can be measured.
The second is ensuring any “cultural issues” are dealt with, and that the move towards shared services is supported from both the top-down and the bottom-up.
“It has to come with strong leadership – councillors and senior management have to clearly signal that this is the direction [the organisation is going in],” she says. “It then has to be tightly managed, with a strong budget manger, and you have got to have consultations with staff and unions. If you communicate to staff and ensure they understand the benefits – that their work might be made easier, and they can spend more time doing their job, rather than dealing with technology not doing what it should – if they can see the immediate value and benefit, they will really drive it forward.”
Shared services arrangements can, broadly, be grouped into three overarching categories: back-office functions; shared management; and front-line services.
Mike Kiersey, EMEA principal technologist at Boomi, advises that local authorities should “start simple” and look at bringing together core back-office functions. This can then be used as a platform for further transformation.
“To me it is about focusing on the simpler use cases that might eliminate duplication, drive simplicity, and then deliver value and cost efficiencies as part of that,” he says. “As we start to consolidate and integrate and provide greater value, the integrity of that data that is coming from the back office into the shared services will enable councils to… have better governance of the data they own, and a more robust process of how they could integrate more front-end services with other councils: at speed, and with confidence to deliver end-user value – as much as cost reduction.”
"If you communicate to staff and ensure they understand the benefits – that their work might be made easier, and they can spend more time doing their job – if they can see the immediate value and benefit, they will really drive it forward.”
Karen Kennedy-Milne, Dell Boomi
Coventry City Council has accumulated a breadth of experience of all types of shared services.
In partnership with Solihull Metropolitan Borough Council and Warwickshire Country Council, the city runs collaborative commissioning and procurement services, as well as a joint resilience team and sharing waste disposal services.
The three authorities, along with those in Herefordshire and Worcestershire, also form the Adoption Central England service.
According to Auluck, Coventry has also recently branched into sharing a regional recycling facility
“Clearly, what we have seen is that there are many different types of configuration and many different models of shared services in practice,” she says. “Perhaps it really doesn’t matter what we call it – as long as it works and plays to the strengths of each partner in the arrangement.”
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