Shared services arrangements in local authorities are succeeding in saving money and lessening the impact of spending cuts, a Local Government Association (LGA) report has concluded.
The Services Shared: Costs Spared report, commissioned by the LGA and produced by Drummond MacFarlane, examined five shared services projects in detail and shed light on how efficiencies were being made by councils sharing back office functions, including HR, IT and legal services.
It found that there was typically a two-year ‘payback period’ before the set-up and integration costs were cancelled out and savings kicked in. Initial savings came from reducing headcount and duplication of staff, in staff changes which were “typically delivered rapidly with strong top-down leadership”. Afterwards, further savings came from improved use of IT, reduced need for assets such as office space, and cultural change leading to better processes, the report said.
The five shared service projects examined in the report are Hoople Ltd in Herefordshire; Local Government Shared Services (LGSS) in Cambridgeshire and Northamptonshire; Devon and Somerset Fire and Rescue Authority; Vale of White Horse and South Oxfordshire; and Procurement Lincolnshire. The five projects had saved a total of £30 million between them, the report concluded.
"Councils are the most innovative and efficient part of the public sector and this report demonstrates the kind of steps they are taking to save money and improve services,” said councillor Peter Fleming, Chairman of the LGA's Improvement Board.
"Efficiency savings aren't enough to make up the 28 per cent cut in the money councils receive from central government, but measures like the shared service arrangements currently in operation at more than 200 local authorities do help to dampen the impact.
"We hope the examples identified in this report encourage even more councils to use the LGA's new evaluation tool to examine whether or not a greater range of service sharing is appropriate in their local area."
Local authorities had been much more successful in sharing services than central government departments have, despite being hit by greater proportional spending cuts, said the LGA. While shared services have traditionally focused on back office functions, many local authorities are now looking at which front-line services can also be shared, the report said.
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Autor(en)/Author(s): James Brockett
Quelle/Source: People Management Magazine Online, 09.08.2012
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