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'Too late' to start sharing from scratch

  • 2 Comments

Local authorities have been told they have little time to start work on new shared service arrangements.

Lloyd Clark, Liberata’s director of local government business, told councillors and officials at the Local Government Association conference in Bournemouth that the financial demands being placed on them meant they needed to act quickly.

“If you aren’t already doing it and you are planning to start from scratch, don’t,” he said. “The costs, the risk, the investment and time to start getting benefits is too long. You have to realise savings in the short term. It is not a wise decision.”

Councils should instead look at the many public and private sector shared services that were already on the market and choose one that matched their objectives.

Mark Hucker, head of planning and business management for the Local Government Association (LGA) group, also warned that the costs and time were likely to be far in excess of what was expected.

“Don’t go and sit in a room thinking it is going to take six months,” he said. “You think it is going to be easy, but it is really, really difficult.”

Mr Hucker explained that he had been working on a shared service for the LGA group, bringing together everything from HR, finance, IT, customer service, knowledge management, to print room and design.

The process of finding a commercial partner had taken a year, resulting in more expense and more management time than was originally expected.

“Do not underestimate the costs of moving to a shared service. The lawyers fees alone will make your eyes water,” he said.

  • 2 Comments

Readers' comments (2)

  • Sharing services isn't only really, really difficult, it also pushes costs up and worsens service. Counter-intuitive but true. There is no evidence, anywhere, that sharing services leads to reduced costs. Have you ever seen any?

    How can it possibly push up costs you might ask. Surely it is a no brainer to share services?

    'Reluctant management' guru John Seddon has just finished a piece of research into where economies of scale thinking (the thinking that underpins shared services) came from and why we still believe in it.

    You can access it here, for free.

    http://www.systemsthinking.co.uk/6-economies.asp

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  • In response to Charlotte Pell's email, can I suggest that there is evidence to be found in the LGC Efficiencies Supplement issued in March 2010 - the link is at the top of this page. Interesting example shown is Somerset Waste Partnership who can evidence £1.5m savings pa

    I agree that sharing services takes time and commitment and short term wins are necessary now but that doesn't mean it should not be considered as a longer term option (say, within 1-2 years). Let's be honest, the quick wins (if there are any left) will not answer the longer term issues. Joint contracts and shared management do not undermine local democratic decision-making, nor does it mean always outsourcing to the private sector. It's a case that all options need to be considered.

    Cathie Powell

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