Shared services: a step too far, by David Walker

21 Jan 11
Two London boroughs are planning to merge their communications functions. This is shared services with a vengeance and is, in a sense, subversive

Councillors from adjacent London boroughs are mulling over a ‘co-operation agreement’ to share their press and communications functions.

Senior managers from Hammersmith & Fulham would move to Wandsworth and by ‘reducing duplication’ make savings. Councillors in the respective boroughs would have their press releases written by a common staff.

This is shared services with a vengeance. Sharing payroll management or pensions administration is one thing, but communications is something else. Aligning the personality and interests of one organisation so closely with those of another in this way is exceptional. Corporate messages will need to be matched; press releases would have to dovetail; and councillors from the respective boroughs given equal airtime.

Of course Hammersmith and Wandsworth are not just Tory; they are run by ultra enthusiasts for downsizing the public sector. Stephen Greenhalgh, the leader of Hammersmith, will presumably never disagree with Eddie Lister, the veteran leader of Wandsworth, because if he did, it’s not clear what sort of press release the joint staff would put out. In the brave new shared world, the boroughs’ elected members would effectively become substitutes one for another…why not move to a common council meeting…why not a common council?

Sharing services is in this sense subversive. It prompts the question why – if the interests of the two boroughs are so similar – there need be two separate boroughs at all. Pursue that hare and you end up with much larger organisations, with much more distance between elected member and electorate. You wreak havoc with the very idea of local government.

This conundrum keeps surfacing, but is never addressed. If cost efficiency correlates positively with organisational size, localism is inherently wasteful. That is what the government’s own gurus say. Last year Sir Philip Green, the boss of Next, reported to the Cameron cabinet that the public sector could make fantastic savings by bigging up, by organising procurement at scale – he toyed with the idea of a single point of state purchase for certain goods and services.

But Green’s commercial logic runs full tilt into political reality. His report was quietly shelved because he seemed to be suggesting a mega-state, which would have preponderant weight in most procurement markets. Tory ministers were none too keen on that.

So how far should shared services go: where’s the cut off that stops sharing becoming structural reorganisation? We could do with a bit of theory to guide us. In London it’s all very confused. Westminster, Hammersmith and Kensington & Chelsea are apparently discussing merger at the same time as their respective leaders work ever harder to carve out distinct political profiles. What would a super-borough with a population approaching a million look like – what would happen to accountability?

Before such a spectre becomes concrete, it’s likely residents might blow the whistle. The ‘objective’ interests of Putney people are not going to be the same as those of Brook Green – in terms of waste disposal, the Heathrow flight paths, road traffic and river bridges and so on, even if they are both majority Tory.

Advocates of shared services might say all this is extreme. You could still have separate boroughs, they say, even if they are on the same IT system. But the shared services logic is inexorable. If Hammersmith and Wandsworth can share press officers, why not share members’ services, why indeed shouldn’t Wandsworth councillors handle Hammersmith issues – reducing the need for any Hammersmith councillors?

David Walker is the former managing director for communications at the Audit Commission

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