Interview: Joint venture boosts council efficiency

Many local councils could improve the quality of their services by deploying new technologies. However, the small size of many councils makes it hard for them to do this, according to David McElhinney, chief executive of Liverpool Direct, a public-private partnership between BT and Liverpool City Council responsible for providing the council's revenue and benefits services.

Following its launch in 2001, Liverpool Direct started a multi-million-pound transformation project that saw it set up 10 one-stop-shop service centres; launch a 24/7 call centre; update the HR and payroll software; implement council-wide e-procurement tools; and deploy a major image scanning and workflow management system.

McElhinney said that by integrating these different systems the council has cut complaints to its revenue and benefits operation by 76 percent while simultaneously reducing costs from around £20m a year to just £5m.

Key to many of the improvements has been the ability to replace paper with electronic documents. "Previously, we had paper, paper and more paper," McElhinney said. "We had three floors of a building filled with paper files."

Liverpool Direct uses 30 Kodak i60 and i260 scanners to convert forms from paper. It has reduced costs and improved customer service by integrating the scanned forms with workflow technology provided by public sector software specialist Comino, automatically assigning forms to the right staff for processing at the right time.
But despite this success, McElhinney voiced concerns that many other councils are not in a position to emulate Liverpool Direct's transformation effort. " Most councils' benefits and revenue departments are relatively small," he said. "This implementation cost us £5m and took 18 months, and for smaller councils it is difficult to authorise that level of investment."

The government has suggested councils should share service centres to overcome this problem, and achieve economies of scale. But McElhinney is sceptical: "They could provide a means to the end," he admitted. "But the problem is [while] everyone wants to form a shared service centre, no one wants to be the council it is done to."
However, even large councils with the budget to undertake major IT initiatives will struggle without private-sector input, McElhinney argued. "Even a council the size of Liverpool couldn't do this [level of transformation] without a PPP [public-private partnership]," he said. "As a joint venture with BT we have been able to use BT's power to get suppliers to act quickly."

McElhinney believes more drastic changes to the structure of local government may ultimately be the only way to enhance efficiency in services. "The government is talking about any police force with fewer than 4,000 officers being forced to merge," he observed. "But you don't see the same discussion with services like revenue and benefits. Maybe the government is using the police as a trial and will roll out similar initiatives to other services, because [it] must be frustrated by the slow pace of transformation."

About David McElhinney

David McElhinney is chief executive of Liverpool Direct, a public-private partnership between BT and Liverpool City Council.

His background in marketing and general management includes 15 years working for Littlewoods Organisation.