Staff face axe as London councils reveal what shared services will mean for IT

Westminster, Kensington & Chelsea and Hammersmith & Fulham aim to save £4m on IT by 2015

Three London councils - Westminster, Kensington & Chelsea and Hammersmith & Fulham - are set to save £400,000 a year by rationalising ICT jobs as part of their ongoing shared services strategy.

The councils say this equates to a reduction of between 10 and 12 ICT posts.

In a document entitled "Tri-borough Proposals Report: Bold ideas for challenging times", the councils outline their plans to make substantial savings over the next five years by, among other measures, cutting staff, adopting unified communications and closing up to four datacentres.

"There is certainly scope for the consolidation of staff in IT, by merging similar functions and reducing duplication in some strategic roles. Not all of these are tied up in outsourced contracts either," says the document.

It points out, for example, that separate teams are providing IT desktop, application and network support to primary schools.

The document says: "It will be possible to provide the same or even better service with a single smaller team and fewer management overheads."

There are currently 30 staff working in this capacity.

The document continues: "It is felt that there is room for some reduction in duplication to yield savings of around £400,000 per annum, equating to a reduction of 10 to 12 [IT] posts excluding schools ICT support, and that this preliminary assessment should be developed throughout 2011-2012."

The report also says the councils have an opportunity to make savings by adopting a common unified communications system that piggybacks on either a public service network such as the Public Sector Network, Government Connect or the NHS Spine, or the cloud.

"Based on typical total network costs across the three boroughs of £1.2m each per annum, this translates into a collective annual saving of between £700, 000 and £1.1m," the report says.

Yet more savings are predicted by closing four of the councils' six datacentres as the result of further migration to cloud services between 2013 - 2015.

Cost savings of £600, 000 per annum from 2013 onwards are expected and will be gained through property and energy savings, reduced duplication and better server and platform licencing deals.

The councils also expect to cut their security spending as "the current separate network security costs and employee authentication are more than double what they could be with consolidation, offering scope for combined savings of between £300,000 and £450,000 per annum".

This news comes as councils are facing significant pressure to cut costs following Chancellor George Osborne's Comprehensive Spending Review in which he said that some councils would have to reduce spending by as much as 30 per cent.

Speaking to Computing last month, David Wilde, CIO for Westminster City Council, said that "all local councils looking at shared services have to strike a careful balance between on the one hand local accountability and recognised political structures, and on the other the need to join up and distribute services more efficiently".

"We are arguably trendsetting in terms of what we're doing here, but all councils should consider it. They all buy network, desktop and datacentre services, and the argument for having separate versions is not strong. Convergence and shared services around these areas is a natural progression in the IT world."

The IT savings for all three councils are estimated to be £4m by 2014/15, which will contribute to the £33.8m savings across all shared services.