09 Feb 2011
David Wilde’s article on the shared services programme undertaken at Westminster City Council is a clear example of the need for local authorities to be far more ambitious in their adoption of shared services.
While focusing on back-office functions and procuring through single contracts to achieve economies of scale is the typical scope of shared services schemes in the public sector, widespread cultural and political barriers have hitherto restricted most local authorities from sharing front- and mid-office services.
This is in spite of the fact that areas such as systems, customer contact centres, and social care and benefits payment departments all carry the highest cost and improvements to these areas would make a big difference to local citizens.
A territorial culture dictates that should a service directly “touch” a citizen, it has to be run by that authority and cannot be addressed as part of a shared facility. This culture, combined with the political fear that implementing shared services results in a loss of local jobs, has curtailed local authorities’ ambitions.
However, changes are afoot. Suppliers and other organisations involved in shared services programmes are now devising ways of achieving the much-vaunted benefits of shared services, without large-scale redundancies, and are instead re-assigning and re-skilling many of the employees involved.
The protectionism that has been so commonplace until now is diminishing, as many neighbouring local authorities are sharing management teams and moving towards sharing as many services as possible.
Shared services is proven in both the public and private sectors, but cultural and political barriers prevent the benefits of shared services being compounded and replicated in multiple departments, irrespective of being a front-, middle- or back-office function.
Vassilis Serafeimidis, PA Consulting Group
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