Shared Services in Local Government

Improving Service Delivery

Ray Tomkinson

• Publisher: Routledge
• Year: 2017
• Print ISBN: 9780566087233
• eBook ISBN: 9781351900492
• Topic: Business
• Subtopic: Business General
• Index: Business

Despite the pressure for local councils to follow the lead of the private sector and develop shared service and partnership arrangements, the barriers in terms of culture, differences in priorities across councils and lack of experience are formidable - yet this is the most likely source of meeting government targets for reduced overheads and improved organizational effectiveness. By using extensive case studies drawn from across local councils in England, Ray Tomkinson explains the implications of sharing service delivery, addresses concerns about loss of control and accountability, and demonstrates the potential advantages. He shows how to set up collaborative ventures, formal partnerships, shared service centres or special purpose vehicles, while pointing out possible pitfalls, thus enabling senior managers to follow all the necessary project steps to create an appropriate shared service. It seeks to examine the evidence of the cost, effectiveness and quality improvements achieved from sharings. This ground-breaking book has been written for everyone in local government; it explores the political and cultural barriers, and legislative/legal framework for joint workings, explains how to find an appropriate governance vehicle, and how to gain the commitment of partners. It deals with political and managerial concerns, risk aversion and parochial issues, and the possible impact on the reputation and performance of both sharers. Shared Services in Local Government is the only comprehensive study for the UK and it will ensure any public sector organization pursuing this route is able to approach the task of creating a shared service with a real understanding of the issues involved.

CHAPTER 1
Introduction

 

 

Why shared services?

As it entered the twenty-first century, local government in England was facing a huge range of challenges. The new Labour Government of 1997 approached the task of renewing public services with considerable energy. The resultant plethora of initiatives (described in this book as ‘waves’) demonstrated a determination to re-invent local government, giving the needs of local people the highest priority and seeking to make services as effective and efficient as possible. The prime mechanisms for doing this were partnership and ‘Best Value’, both emphasizing quality in delivery rather than purely economic measures of good performance. Also there was a desire to modernize the organization of delivery.

This book focuses on local councils in England. The structure of councils is different in Scotland, Wales and Northern Ireland though the issues there are very similar. They have their own agendas for improving services and shared services is a part of this. This book, however, concentrates on the story in England since it is here that progress has been best catalogued.

Written from the standpoint of an expert observer, this book is intended to lay out for those in local government who want to be in the forefront of improvement in service delivery the means and methods they can use to achieve improvement. This is essentially a practical guide to creating shared services. Analysis of the philosophy of sharing is of secondary importance to the learning of ‘how to go about it’ contained in these pages.

There are 388 local councils in England, each having broadly similar structures, legal statuses and reporting requirements. As a result many similar activities are carried on in each council. Under pressure to be as efficient as possible, local councils have shared activities over a long period but, as this book outlines, the potential that sharing gives to restrain expenditure and improve service delivery has become more and more important since 1997.

Despite the extensive public scrutiny of councils it is not easy to get a clear picture of the extent of shared services in councils. As such the material for this book and the case studies is drawn from a wide variety of sources that are not readily comparable. Consequently, the learning from the material suffers from a lack of objective comparison, but this is compensated by the richness of the possibilities covered in the material. What is more, sharing arrangements are described in a wide variety of ways by councils, which means that it is not always easy to see the scope and design of sharings in publicly available publications in order to draw out comparisons. A reading of this book will reveal the different terms used to describe shared services, thus confirming the impossibility of being definitive. Moreover the focus of this book is on those sharings that are most recent and have stretched the capacity of councils through their own determination to improve rather than continue to focus on traditional areas of collaboration. Much earlier sharing may have gone unnoticed.

In order to capture as much learning as possible this book will look at the range of possible arrangements as widely as possible. However, there must be some limitations. The first of these is that there must have been some form of agreement, tacit or explicit, between more than one autonomous council to share. Secondly, the result of this agreement must have been the delivery of a service for which the public were the end customer – that définition has been drawn as widely as possible so that the end customer benefit can be taken either through enhanced service or a benefit such as reduced council tax charges. My définition of a shared service is therefore:

the shared provision by more than one local council of a specified service in which service aims and objectives are mutually shared and for which local people are the end customers.

The adoption of this definition clearly implies more than just centralization (where services are funnelled into an existing department as an added-on responsibility) within a single council. It does not rule out sharing without a separate and distinct organization but stresses that there should be an agreement that delivery of a specified function is the main focus and so is treated as of primary importance. Moreover, the sharers have, through the agreement, put a critical emphasis on ‘shared’ responsibility for end results and/or on ‘service’.

In addition this definition implies that the shared services organization is typically responsible for providing services to an agreed service level and reporting on service effectiveness, which has positive implications both for benchmarking and for determining the value for money of the services.

Additionally, while cost cutting may be the initial rationale for implementing shared services, this definition specifically permits a more value-oriented approach, seeking to leverage the full potential of shared services as an opportunity to improve public sector value and transform service delivery.

The définition is independent of whether a private sector firm, a voluntary organization or other public sector bodies are involved. The définition is independent of the type of governance arrangement used to control the service provision.

So what will this book look at?

In this book Chapter 2 will take an in-depth look at the background to shared services.

Chapter 3 will examine the impetus to share; the structural background to sharing and the ‘waves’ towards sharing services in local councils. The chapter will discuss the different routes to sharing.

Chapter 4 will survey the extent of shared services in existence and use a series of case studies to identify how and why the sharing was developed and the practical issues resulting from this.

Chapter 5 will review the experience of Breckland District Council and Forest Heath District Council in creating a shared service, the Anglia Revenues Partnership, for revenues and benefits administration.

Chapter 6 will discuss a large project to create several shared services amongst a number of councils who form the Weiland Partnership.

Chapter 7 will explore the case studies and attempt to evaluate the potential for improvement they display and, by identifying some of the learning, point to the issues that need to be resolved for the successful development of shared services.

Chapter 8 will look at the development of shared services currently under way in local councils and at proposals for the future.

Chapter 9 will outline some of the trends for the future including the wider picture of government developments in the public sector.

Chapter 10 develops some thoughts on the future of shared services particularly focusing on the impact of the government’s White Paper on the future of local government.

CHAPTER 2
The Background to Shared Services

Why is shared services so important now?

Most local councils have traditionally based their organization on a series of vertically integrated, technically orientated departments to deliver services. In the main, even now, the service will be headed by a manager who is professionally qualified in the service area; for example, the leisure department is managed by a member of the Institute of Leisure Management, the environmental health department by a qualified environmental health officer. Legal departments are headed by a qualified solicitor and finance department by a member of the Chartered Institute of Public Finance Accountancy.

Despite the attempts initially outlined in the Mallaby Report of 1972 to promote the concept of generic managers, the culture of technical professionalism is still strong. The result of this has been that, whereas most large organizations already share services internally – where people undertaking functions such as finance, human resources or information technology are grouped together in order to allow the specialist activities to be carried out more effectively – this is not universal practice in local councils. Whilst there may be a finance department there are often accountants, human resources or IT specialists in ‘service’ departments.

Even less common is the sharing of services between local councils. As this book will demonstrate this position is beginning to change but progress is sporadic and, as yet, fraught with uncertainty and difficulties. Because of this pressure has had to be exerted by external sources to get local councils to consider the opportunities.

All governments emphasize the need to ensure that minimum standards are achieved in all councils but the Labour Government has sought, since it was elected in 1997, to raise standards across local government in order to avoid what has become colloquially known as a ‘postcode lottery’ (where the provision of services differs depending on where the recipient lives) in part to respond to rising expectations, such as service access being available when ‘customers’ want it rather than when it is offered. This government’s policies have also sought to combat social exclusion by safeguarding the interests of vulnerable communities, groups and individuals, and in addition there is been a strong emphasis on the importance of ‘technical efficiency’, in other words a link between inputs in terms of money and the outcomes, primarily to respond to a desire to secure investment in health and education by reducing expenditure on bureaucracy.

It is difficult to put a starting date on the beginning of ‘shared’ services in local councils. There have been instances of councils sharing an element of service for several years. There have also been instances of services being shared. And there have been statutory requirements for shared bodies such as the six English Passenger Transport Authorities and their executives (PTAs/PTEs) (that is, Greater Manchester, Merseyside, South Yorkshire, Tyne and Wear, West Midlands and West Yorkshire) and Strathclyde in Scotland. They are responsible for securing public transport services for some 14 million people and were first established by the Transport Act 1968. The PTAs are now responsible for subsidizing bus services which are not profitable to run but are considered socially necessary, and for providing bus shelters and stations. The PTAs are made up of councillors representing the areas served and are not ‘precepting councils’ so they have to negotiate a ‘levy’ every year on the local councils of the area they serve.

Despite this and other examples, councils still favour self-sufficiency rather than joint working in terms of their form of organization. In his paper ‘Crossing Boundaries’ written for the New Local Government Network, Ian Roxburgh (a former chief executive of Coventry Metropolitan District Council) says there are ‘deeply ingrained attitudes and cultures’ and ‘invisible barriers’ to joint working. However, he also writes ‘there are encouraging signs of the potential benefits’ and he reports that a survey of senior councillors and chief executives by the Local Government Association at its 2002 annual conference showed that two-thirds of those questioned were considering selling services to other councils once trading rules are relaxed, while 82 per cent said their council would consider buying services from another authority.

In spite of this openness, and the pressure created by the government, the capacity of many councils to respond is inadequate. As we will see some councils are too small and do not have the volume of resources to respond to the government’s improvement and efficiency requirements at the same time as responding to the rising expec...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of Figures
• Glossary
• About the Author and Acknowledgements
• Foreword
• Chapter 1 Introduction
• Chapter 2 The Background to Shared Services
• Chapter 3 The Impetus to Share
• Chapter 4 Shared Services Case Studies
• Chapter 5 Case Study 1: The Anglia Revenues Partnership
• Chapter 6 Case Study 2: The Welland Partnership
• Chapter 7 Learning from the Case Studies
• Chapter 8 The Shared Services Scene in Late 2006
• Chapter 9 The ‘Fifth’ Wave
• Chapter 10 The Future for Shared Services: The ‘Sixth’ Wave?
• Appendix 1 Welland Shared Service Project – Principles and Protocols
• Appendix 2 ‘A Process Evaluation of the Negotiation of Pilot Local Area Agreements’ for the ODPM in June 2005
• Appendix 3 ‘Efficiency – Transforming Local Services’ from ‘Strong and Prosperous Communities’
• Further Reading
• Index