This paper is one of a series that highlight findings from research by PricewaterhouseCoopers LLP into key local government services markets, on behalf of the Department for Communities and Local Government. The report highlights key challenges and opportunities in relation to shared services within local government, the implications of recent policy proposals, and potential ways forward in developing shared service in the wider context of local government markets.Although shared services promise substantial efficiency gains only 29% of local authorities are involved in shared ‘back office’ arrangements with other authorities, but 35% claim to be ‘considering’ doing so.
There are many ways in which services are being shared. At one extreme there are strategic alliances between local authorities and NHS bodies to commission integrated health and social care. At the other end, options include aggregated delivery arrangements such as consortia arrangements for the delivery of support services, where staff from several authorities are transferred into a single organisational structure, with a single management team.
The potential for cost reduction and efficiency gains come from reduced management overheads, commonly procured ICT and other support systems, standardised work processes, the avoidance of duplication of activities, and opportunities for accommodation rationalization.
Implementing shared service solutions in HR and finance functions, in a manner consistent with ‘best in class’ private sector arrangements could yield 40 bn pounds in savings over a ten year period.
The paper is available at: http://www.communities.gov.uk/pub/583/Workingpaperonlocalauthoritysharedservice_id1510583.pdf
SHARED SERVICES AT FOREFRONT OF EFFICIENCY SAVINGS PLANS
Features: April 28th, 2009
Shared services are expected to deliver efficiency savings across government of some £4 billion pounds according to HM Treasury’s Operation Efficiency Programme: