There is growing debate about which model of IT provision local authorities should adopt to increase efficiency and output in the face of the tightest budgets in five years.

Cardiff Council last week claimed a UK first, with a 15-year partnership with Indian IT services firm Tata Consultancy Services (TCS). The deal will see strategists from both the council and the supplier working together from the authority’s premises.

Using offshore providers has traditionally been politically sensitive for local councils, but such a deal suggests attitudes may be changing.

New models
The partnership marks a new engagement style between the public and private sector, according to Brian Woodford, director, public sector at TCS UK, who said there will be increased focus on efficiency and how risk is managed, as well as a complete analysis of alternative service models.

“It is not a traditional buyer/supplier relationship and will see the public sector taking the best bits of the private sector,” he said.

“The deal was largely about efficiency. We also offered a cost-effective solution.”

According to a report last week by consultancy Deloitte, local authorities should retain control of their technology strategy and management of suppliers rather than outsource their entire IT operation.

And John Serle, editor of the annual IT Trends report from user group Socitm said there can be problems with such partnership models because the two parties do not have an equal investment in the organisation.

“The supplier has not put in money, so is unlikely to take ownership of the project,” he said.

“A partnership in the traditional sense rarely comes out of agreements such as these. But there are examples, such as BT’s partnership with Liverpool Council, that have seen technology suppliers invest in the project and end up owning it.”

BT will have invested £84m in new technology for Liverpool Council by the ti me the contract ends in 2017.

Serle said that only 10 per cent of local authorities currently outsource all their IT ­ with examples being Milton Keynes, Lincolnshire and Birmingham City Council.

But he anticipates an increase in full outsourcing in 2010 and argues with Deloitte that there can be problems with this model, but that many of these are related to inflexibility once a deal has been set up, and can be avoided.

Addressing overcapacity
Serle said one area that will come under increased scrutiny is the considerable overcapacity in local authorities.

“There are 30,000 people involved in government IT –­ imagine giving those 30,000 people a common agenda and pooling the resources. Enormous changes could be made in terms of systems analysis and design,” he said.

One way of achieving efficiency would be for local councils to partner and share technology and staff.

This model has been adopted by several local councils in the US, where developers in the authorities create applications for the provision of services and share them via the internet. The same is also being done in parts of Europe.

Cultural conservatism
However, there is a reluctance to follow such a model here because it is not part of the culture of local councils, according to Serle.

“It takes incredible political courage to make big decisions,” he said.

“By way of example, there is an assumption that every school must have a headteacher ­ – but why? It is costly and arguably unnecessary.”

Serle believes that as a result of the difficulty of making such big decisions, many more councils will opt for full outsourcing as a way of cutting costs regardless of the problems it can cause.

Another way in which local authorities can reduce their costs would be by publishing their information on the internet.

People put all sorts of personal data on Facebook and other social networking sites, but seem reluctant to have government data published, according to Serle.

“Wouldn’t it be valuable, for example, to be able to access medical records on the web following an accident on a skiing holiday? This idea has a practical application,” he said.

In addition, some of the more innovative local authorities, such as Birmingham, are believed to be looking into software-as-a-service solutions from companies such as Google, and could reduce their storage spend tenfold, according to some experts.

“When local authorities are given a budget to replace desktop PCs and laptops, they need to take a fresh look at how best to spend their money ­ – and they are beginning to realise this,” said Serle.

“We will see some big changes in local government IT management in 2010.”