Economy forces public sector to share services, survey shows
By Mike Thatcher
3 December 2009
The recession is forcing all parts of the UK public sector to enter into shared service arrangements, according to a CIPFA survey of finance and resources directors.
Almost half of the 299 directors surveyed (46%) said they expected to partner with other public bodies or to actively share services in 2010. Councils and fire and police authorities were the organisations most likely to adopt this approach, but health and central government were not far behind.
‘Public bodies see shared services as a way to save money but also to preserve frontline services,’ said Paul Jackson, CIPFA’s performance improvement adviser. ‘They might not want to go down this route, but they see it as inevitable.’
Seventy per cent of respondents thought the benefits from using shared services to reduce costs could be ‘very significant’ or ‘quite significant’. Only 16% were planning frontline service cuts.
The back-office functions most likely to be shared with other bodies in the next two to three years were: procurement (34%), IT (24%), HR (23%), recruitment (23%), training (22%) and finance (20%).
FDs suggested that sharing services would be easier than outsourcing in terms of getting support from staff. But there were concerns over start-up costs, benefits to the user and loss of local accountability.
One director claimed that the savings made by job losses could be swallowed up by redundancy costs in the short term. Another said a minimum of 15% savings would be required to make it worthwhile investing in shared services.
CIPFA’s report, Sharing the gain: collaborating for cost effectiveness, will be published next month.