The challenges for councils in sharing ICT services are set out in the latest Society of IT Management briefing which describes the recent experiences of the Aylesbury Vale and Dacorum partnership, and that of the councils involved in East Kent Services.
The briefing: Shared ICT services: more than meets the eye? points out that sharing services ranks high on the agenda of possible responses by councils to austerity, and that many have been established.
However, a large number end before delivering the anticipated benefits, and for others the path to implementation can be far from smooth. These points are illustrated in the two case studies described in the briefing.
Aylesbury Vale DC and Dacorum BC announced their partnership in May 2012 with the aim being to generate savings through improved efficiency and to create improved and more resilient systems. The new arrangement would also support transformational change to help both councils cope with reduced government funding and the increasing demand for local services.
The merged ICT service was to be established by the end of the year and run by Aylesbury Vale’s Head of IT. Both authorities expected to benefit through the ability to access the same systems without needing to create potentially complex new infrastructure.
Dacorum had initially expressed an interest in Aylesbury Vale providing ICT services to Dacorum under a service level agreement, perhaps reflecting the difficulty for relatively small councils in coping with the demands upon the ICT service.
In April 2013 the councils announced an end to the arrangement on grounds that it did not provide sufficient financial benefits, although they will continue to work together on selected projects.
Socitm’s analysis of statements made about the ending of the arrangement suggests that the problem was due to the uneven nature of the relationship – with one council effectively becoming a supplier to the other.
East Kent Services was formed from the ICT, customer services, and revenues and benefits functions from Canterbury City, Dover DC and Thanet DC coming together to fast-track large scale efficiencies and ensure resilient services in East Kent.
Implementation began in February 2011 and the partnership retains offices in all three councils with 365 staff.
Elected members are delighted with the cost savings, but further rationalisations are proving elusive, most ICT services remain as they were, and getting to a unified strategic approach is challenging.
EK Services intended from inception to gain additional business and win economies of scale, but new work from outside the partnership has been marginal, although new opportunities may present in the next round of cuts, when smaller councils realise that they no longer have the capacity they need.
Socitm believes that the two cases provide some key pointers for future sharing proposals. Firstly, parties should be clear and open about what they want to get out of a partnership, from the immediate issues to medium term scenario. Partners should also have common interests, or share similar problems that are more easily solved together than apart.
Where the solution involves one partner helping another, then there needs to be some reciprocal exchange, as asymmetry does not work.
The business model needs to be appropriate for the immediate and medium term aims of the partners.
Outsourcing the existing functions to a new public sector company within the terms of the Local Authorities (Goods and Services Act) 1970, provides the benefits of no VAT or corporation tax, public sector pensions and retention of public sector ethos. However it increases the difficulty of making strategic decisions that will lead to rationalisation, increased effectiveness and promoting service innovation. All these are critical issues.
The briefing includes information about 37 ICT shared service arrangements know to have been implemented across the UK.
The briefing is available from Socitm