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LGC interview: Our new shared service avoids restructuring pain

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The debate over local government reorganisation has been dominated by bad-natured spats between the upper and lower tiers in shire areas. However, more quietly, districts are increasingly districts working together to explore new arrangements that ensure future sustainability.

In the past 12 months districts in Suffolk, Devon and Kent have all been discussing mergers, with varying degrees of success. In Gloucestershire and Oxfordshire four districts have taken a different approach, launching a wholly owned company employing almost all staff from three of the councils.

Cotswold, Forest of Dean, and West Oxfordshire DCs hope to save about £5.6m a year by 2020, and £41m in total over the next 10 years, by setting up Publica Group Ltd. Cheltenham BC is also a founding partner but has only transferred back office functions to Publica at this stage.

All of the partners retain their political independence, with their own councillors, and continue to set service standards and strategy and take policy decisions.

In an interview with LGC, Publica’s managing director David Neudegg, who was previously joint chief executive for Cotswold and West Oxfordshire, said: “It has got 95% of the financial benefits without any of the pain of restructuring. It’s not perfect but if you are willing to share there are a lot of benefits to be had.”

About 650 members of staff from across the councils were transferred to Publica on their existing terms and conditions following the company’s official launch on 1 November, but most will remain in their current locations. There have been no compulsory redundancies, but new staff will not qualify for the local government pension scheme which Mr Neudegg said would bring “big financial benefits” in the long term. Higher starting salaries and a revised grading structure to allow the workforce to better plan career progression are to be implemented instead.

Mr Neudegg said: “I have learned more in the past nine months than I have probably learned in all of my career.”

He said this included learning about “more modern employment and recruitment practices” compared with those found in local government.

Mr Neudegg said he got people outside of the sector to challenge what Publica is doing and how it proposes to do it.

“We’re learning really fast and that’s what makes me excited about what the potential future could be,” he said.

Cotswold, Forest of Dean, and West Oxfordshire have retained the statutory headof paid service, section 151 office and monitoring officer along with legal and counter-fraud teams.

Cheltenham leader Steve Jordan (Lib Dem) told LGC his council’s decision not to transfer all services to Publica was a result of it having different arrangements with other local authorities in the region, and pointed to work on a joint core strategy with Tewksbury BC and Gloucester City Council. He also said Cheltenham is looking to “maximise its assets” in the borough so it wanted full control over that project.

The joint working began nine years ago when Cotswold and West Oxfordshire starting sharing a chief executive along with a range of managerial and support services. In 2012, the councils took the partnership a stage further by creating a human resources, finance and payroll shared service with Forest of Dean and Cheltenham.

The partnership was extended last year to include ICT, public protection, building control, legal, property and customer services. A joint committee was then established to oversee the creation of Publica Group, which has appointed four non-executive directors to provide independent, external advice.

When the idea to transfer all staff to a jointly owned company was first proposed in 2014, LGC reported that some councillors had concerns about a lack of scrutiny of services.

Mr Neudegg said members “do [still] have concerns about a perceived loss of control and loss of identity” but added that was “more of a perception than a reality”.

“We are not pretending we are perfect but we have got a strong desire to improve,” he said.

Mr Neudegg said any officer working for Publica can be brought before a council’s scrutiny committee while members also have the right to review any service areas.

“We recognise this is a big step and a bit beyond where everyone else is so it’s only right and proper we go the extra mile, particularly with councillors so they understand where we are going and express their concerns so we can meet those concerns before they become a big problem.”

Armadeep Gill, a partner at law firm Trowers & Hamlins who advised the councils on Publica’s creation, said: “The authorities spent a lot of time working through the governance arrangements… If you have poor governance you can’t engender cultural change.”

However, Mr Gill said “there could be difficulties” with implementing cultural change – something Mr Neudegg wants to do as Publica explores more commercial opportunities – if member councils “drift away from the objectives” they agreed on at the start of the process.

 

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  • Diluted democratic accountability

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