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Viewpoint: Pushing the boundaries of Shared Services in local government

"Public sector shared services should be seen first and foremost as a means to improving customer access to services."


Vassilis Serafeimidis
Public Technology
2 February 2011

Territorialism and protectionism have stopped local government adopting Shared Services for front line services. Yet it is in these areas that significant efficiencies can and should be attained by increasing collaboration and sharing, as well as delivering a better customer experience.

Cautious approach
Local authorities across the UK have gained significant praise for Shared Services programmes. These programmes typically address areas such as data centre hosting and desktop and payroll contracts. However, while laudable such developments show that in spite of the unprecedented pressures of the Comprehensive Spending Review 2010 settlement, local authorities are still taking a highly cautious approach adopting shared services across front line and mid-office services. 

Currently, the scope of Shared Services in the public sector typically extends to sharing back office functions - such as finance and IT - and joint procurement to achieve economies of scale. Yet such initiatives offer limited opportunities to make quantifiable savings because they do not represent the main areas of local authority expenditure. Increasing the scope and volume of transactions through joint procurement will improve the discounts on offer from suppliers.

Think of the increased impact of such activity if it was directed not only at suppliers and support services, but at joint waste services, sub-regional customer contact centres and adult education facilities such as libraries and learning centres. 

Public sector shared services should be seen first and foremost as a means to improving customer access to services. By consolidating these services, the resident and taxpayer has a better chance of receiving the service they need, without having to know who provides what and when.

Authorities must look at the front line: customer contact, social care, infrastructure services and education carry a high proportion of service cost. They offer opportunities to gain significant savings through simplified and standardised supply arrangements, use of common IT applications, as well as delivering a better, more consistent service to citizens. 

Cultural barriers
The local government sector has traditionally suffered widespread cultural and political barriers to share services. These have restricted most local authorities from sharing front and mid-office services.  The economic downturn has seen a shift in this thinking, for example we are seeing a rise in shared management teams and Chief Executives.

In addition to this, there is added insight from national surveys and customer profiling and this is gradually getting across the message that the customer often doesn’t care which local authority provides its services, only that its services are provided effectively and cost-efficiently. Whilst different boroughs in a metropolitan area may be traditionally unwilling to share customer contact facilities with another (typically on the grounds of retaining identity and not confusing the citizen), in reality we find that the population is increasingly mobile across authority boundaries, astutely aware of its rights and entitlements and ever more literate and competent in accessing them.

Local authorities can no longer use a wish to protect departmental structures, organisational or even political boundaries as a reason not to join up customer and frontline services. For many taxpayers, the key question is not “why should councils share services?”, but “when will they get on with it?”

Changing mindset
Making this work effectively requires strong leadership along with characteristics perhaps not widely seen before. A recent PA Consulting Group survey identified a move from directive and hierarchical leadership to one which is more collaborative, engaging and focused on outcome management.

There are already a number of shared leadership teams in place which are well placed to drive through joint initiatives across front line services. Indeed, there are even various examples of senior management teams being shared across local authority borders.

This change in pace and focus can deliver not only greater efficiencies and cost reductions, but can also facilitate a more transparent and accessible platform for customers. With this model, residents who move across authority boundaries will see a more consistent approach to service delivery.

A logical extension of this model, which is already in place in other countries, would be a single contact centre to support an entire city or major urban area, such as in New York City. In addition to financial benefits, this model offers citizens unprecedented consistency of service delivery and ease of access to local government services.

This approach to shared front line services is not restricted to local government. There are examples such as Herefordshire and Northampton of geographic clusters where the local authority, Primary Care Trust – or GP Consortium in the future – and emergency services are coming together and sharing field management or contact centre services. Providing a single point of contact or portal for citizens, for everything from locating a GP to social services, drives efficiencies and transforms service delivery.

Shared Services is a proven approach in both the public and private sectors, but cultural and political barriers are preventing the benefits being realised and replicated within and across local authorities. The current financial settlement and change of government presents a once-in-a-career chance to be far more ambitious in the adoption of shared services. How many will be prepared to push the boundaries and make a real difference to public service delivery?
Vassilis Serafeimidis is a public sector shared services expert at PA Consulting Group.

To read the article online, please click here.

To visit PA's page on shared services, please click here.

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