Features: January 11th, 2008

By Bruce Cooper.

Sharing services between public bodies is a key feature of Transformational Government, the strategy for raising efficiency across the public sector. The benefits of sharing services are widely acknowledged and there are a number of successful programmes to support the rhetoric. But local government is a long way from embracing this approach. The author highlights the real barriers to sharing, which range from the existing technology base to a competitive spirit between councils.

The public sector has come under increasing pressure to drive efficiencies through the intelligent application of modern technologies through a series of Government-led initiatives. These initiatives, it is hoped, will ultimately lead to major cost savings across all Local Authorities and improve the way in which local government interacts with its citizens.

The first of these initiatives was the Gershon Report of 2004, which proposed that local governments should make £20bn in savings by 2007-08 through 2.5 per cent a year efficiency targets.

A further three initiatives built on the recommendations of the Gershon Report and outlined the end goal for public sector services. The first of these is the Transformational Government plan, an element of the efficiency drive that can be said to underpin all the others. This plan considers the best ways technology can be used to further involve the UK’s citizens in government and how to better tailor services to meet individual needs. Key to this is the aim to share more services across councils.

According to the ideas of Transformational Government, shared services provide public service organisations with the opportunity to reduce waste and inefficiency by re-using assets and technologies and sharing investments with others. This is at the heart of the e-efficiency agenda: the use of technology to streamline the processes of local government while improving services.

The Transformational Government plan was supported by two other initiatives, which are worth summarising here. The Lyons Enquiry into Local Government was published on 21st March 2007 and sought to encourage local government to form joint strategies. This highlighted the value a more collaborative approach to working would bring to local authorities and promoted the use of common infrastructure. Finally, prior to this, the Varney Report examined how technology could be employed to encourage more joint working stressing the importance of shared services and collaborative procurement.

These initiatives all highlighted the need for councils to work together and to use technology in the most efficient manner. It directed local government towards a shared services environment, where tax-payers’ money was protected from wasteful duplication of effort and inefficient practises.

Despite these initiatives, however, councils are still a long way from realising the dream of a shared services utopia envisioned by central Government. So why is this the case, when the benefits of shared services seem largely self evident to the politicians at Westminster?

Barriers to the take-up of shared services

E-efficiency has been implemented unevenly by local authorities due to the regional nature of funding. The way that public sector projects are funded leads, almost automatically, to a siloed approach to technology. Councils usually provide the majority of their funds in upfront fees, with lower ongoing costs. This can engender something of a ‘DIY’ approach and makes managed solutions less desirable as the necessary ongoing funds are not available.

Public sector networks are, therefore, largely segmented and different applications are managed separately. They lack the convergence of technologies, processes and standards necessary to make shared services a reality. There are further barriers to the successful take-up of shared services. Competition between councils is intense, arguably more so than that between rival companies in the private sector. Each council wants to position itself as the centre of excellence around which a managed service can be built. This leads to duplication of effort as councils build the same services – exactly the opposite effect from the Government’s aims.

Where shared services have been allowed to grow, and function properly, they have more than proved their worth, although examples in the public sector are sadly few. The Pathfinder projects are one such rare instance of councils working together to deliver an integrated IT project.

The Pathfinder projects involve a network deployment that will provide high capacity broadband links to schools, libraries and council offices throughout the Highlands and Islands for Pathfinder North, and Dumfries and Galloway and the Scottish Borders for Pathfinder South. The projects resulted in five WANs being able to interoperate with each other effectively in the case of Pathfinder North, while the Pathfinder South project connected two WANs. The working relationship that this has established with the relevant councils has developed a culture in which it is likely full shared services will develop.

It is, however, unlikely that this will be the case universally as The Pathfinder Projects were unique in that the set aim was to provision high-speed broadband to remote areas of Scotland, and a great deal of funding was provided to achieve this. We are still a long way from a situation where such joint projects are commonplace.

The network deployments in Scotland, as the ‘Pathfinder’ title suggests, points the way in which similar projects could successfully function. It is an ideal that will be much easier to achieve in the future when the UK has more next-generation networks deployed and interoperating with each other. The public sector will, however, need to overcome its traditional resistance to managed solutions for this is to become more widely realised.

Managed Solutions and the public sector

Private sector deployments of managed services, such as that provided by THUS to GCap Media, have clearly demonstrated their value. They allow access to the most up to date networks while taking away the pain of having to bring in-house staff up to speed on ever more complex technology.

The case of GCap proves that there are measurable business benefits to be achieved from managed services – benefits that will bring about the efficiencies the Gershon Report demands. Glasgow City Council has demonstrated how this can work in practice in the public sector. The network rolled out for GCC was planned around helping the LA meet the targets of the Gershon report. Due to this it was an unqualified success. Typically, operators characterise managed services in terms of Service Level Agreements that define the boundaries of service parameters, including aspects such as fault monitoring, which will be managed proactively.

This approach can be taken further by recognising the true long-term interdependency between both parties, by physically basing its personnel full-time on the customer’s own premises. This way, relationships can deepen to ensure that a customer’s issues are really understood and a solution developed to meet them. For LAs, it also takes some of the fear of managed services away by giving them the piece of mind that their own in-house expertise will not be lost.

Transforming local government

It is apparent therefore, that if the Government is to reach its aim of Transformational Government, there needs to be a change in the way in which councils approach shared services. There needs to be a deal of coordination around which councils will lead on which service, and for this to happen joint planning becomes essential.

With this approach, costs will be slashed and best practice processes established. Shared services and managed solutions have a lot to offer the public sector, and there is some reason to be confident that the next few years will see a greater uptake of such services. The public sector, unlike the private sector, is increasingly deciding to outsource key areas of its ICT infrastructure and this trend will play a great part in encouraging Transformational Government.

Bruce Cooper is Sales Manager, Government & Utilities at THUS plc.