As councils grapple with the challenge of delivering high-quality services amidst budgetary constraints, shared services, implemented well, continue to provide both efficiency and innovation in the redesign of services.
At its core, shared services is a collaborative strategy where councils pool resources to deliver mutual services. It’s a harmonisation of functions, often back-office or administrative, to capitalise on economies of scale, expertise, and streamlined processes. The result? Reduced overheads, enhanced service delivery, and a more agile operational framework.
The motivation behind shared services isn’t merely theoretical. It’s grounded in tangible financial advantages, which can include:
- Centralised Operations: By centralising functions like HR, IT or procurement, councils can drastically reduce duplicated efforts and associated costs.
- Economies of Scale: Buying in bulk or contracting services for multiple councils can unlock significant discounts and better contractual terms.
- Shared Technology Infrastructure: Investing in a unified tech infrastructure can result in massive savings as compared to each council setting up and maintaining its own.
It isn’t just about penny-pinching either. Shared services often lead to enhanced quality outcomes for officers and more importantly, for residents and businesses. By pooling expertise, best practices, and resources, councils can offer their communities better, more consistent services.
Here is where it has worked well:
Cambridge and Northamptonshire Councils: A prime example of shared services done right is the collaboration between Cambridge and Northamptonshire councils. Their joint venture, LGSS, is one of the UK’s largest public sector shared services ventures, providing services ranging from finance to HR, reaping huge savings while maintaining service quality.
Three Rivers and Watford Borough Councils: These councils have merged many of their services, from waste collection to leisure services. By doing so, they’ve been able to reduce managerial costs, streamline operations, and offer residents a consistent service experience.
Devon and Somerset Fire and Rescue Service: By merging, they’ve created one of the largest fire services in the UK. This has enabled the pooling of resources, better coverage, and significant cost savings, all while ensuring that communities continue to receive excellent service.
Embracing shared services isn’t just a structural change but a cultural one. It necessitates councils to adopt a collaborative mindset, view neighbouring councils as allies rather than competitors, and collectively work towards the overarching goal of community well-being.
From our experience, we know the challenge is to ensure the retention of local expertise. For instance, pooling call centre resource for multiple councils into one function is cost-effective but the operators need to have a knowledge of the local area. Ensuring staff are up to speed with what is happening locally in the different council areas is vital to the long-term success of any reforms.
Indeed, like any transformation strategy, shared services come with their own set of challenges such as:
Alignment of Goals: Different councils might have varied priorities organisationally and politically. It’s essential to align objectives and ensure everyone is on the same page.
Change Management: Change can be disruptive. Smooth transitions, effective training, and consistent communication can help manage the upheaval.
Maintaining Local Identity: While shared services aim for consistency, it’s crucial to ensure that the unique identity and needs of each council’s community aren’t lost.
The future of effective council operations lies in smart strategies that do more with less. Shared services, with their proven track record of cost optimisation and service enhancement, drive councils towards a collaborative, efficient, and community-centric future.
At Peopletoo, we believe in strategies that resonate deeply with real-world challenges and aspirations. We believe in the power of small teams to deliver big change, which is why shared services are a testament to what’s achievable when councils come together with a shared vision of excellence, cost-efficiency, and community benefit. The journey might be peppered with challenges, but with collaboration as the compass, the destination can be a more sustainable future for all.