Headlines: August 20th, 2007


Collaboration by public bodies, including councils, to share computer systems is a key feature of the ‘Transformational Government’ strategy with high expectations that it will be able to deliver a large slice of the Gershon efficiency savings. But doubters are now appearing to question this optimism. The latest to do so is Bluefish Communications, an IT professional services company, which highlights that politics and culture are as much part of the change process as technology .

It is estimated that shared service solutions in HR and finance functions could yield 40 bn pounds in savings over a ten year period. Finance and HR represent some 70% of the potential scope for shared services, with a further 10% represented by revenues and benefits, and 20% from miscellaneous, smaller scale and sector-specific initiatives. Sharing services can be achieved in many ways. 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.

Sharing services is a mature approach to greater efficiency and has been promoted for more than a decade. It avoids many of the problems of outsourcing and its effectiveness has been proved in the public as well as the private sector. Despite this track record and the support of Ministers, two thirds of IT managers in local government and the Confederation of British Industry, progress has been slow. Only about 29% of local authorities are involved in shared arrangements with other authorities, with 35% claiming to be ‘considering’ doing so.

What is emerging is that the lack of enthusiasm on the ground for shared service delivery results from a complex web of factors which inhibit change. The barriers to adopting shared services include a fear of losing control of an area of operation and of losing staff expertise to a separate organization. Members of councils are concerned about losing jobs in their area. There is also a lack of incentive or reward for the successful local authorities to consult, share experience and work with their under-performing colleagues.

Martin Male, Head of the Shared Services team at Bluefish believes that greater efficiency through shared services needs to be brought to the public’s attention. He said: “Voters need to understand there is an efficiency opportunity that little threatens front-line services. Public support will compel members to move down this route.”