Can shared services help save the front line from cuts? It depends on the approach taken
Although the shared services option has been around local government for more than a decade, the scale of progress in this area has not equalled the perceived potential so far. But a more ambitious approach could help, according to a report this month from the New Local Government Network.
The scale of the current cuts means significant savings have to be generated across the board, and that means being radical, ambitious and brave. Shared services schemes are no different. If they are to help, they will have to focus on all local authority services, and include the wider local public realm as well as more traditional sharing between councils.
To date, plans have focused on the ‘low hanging fruit’ of the back office but the financial gains are limited. Finding savings of close to 10% of total budgets requires broadening the horizon to cover big spend areas such as social care and waste and recycling – and confronting the substantial barriers in the way.
Finding the right fit of partners is vital but these do not have to be geographical neighbours. For many back-office and transactional services, they can be anywhere in the country. This trend is reinforced by technological advances such as cloud computing and improved data security.
If the front-loading of the cuts has made shared services a priority, it has also posed a problem. Many of the more ambitious projects can take years to come to fruition, and often require up-front investment. Nonetheless, there are ways around this, through private partners and innovative financial mechanisms.
Shared services, on their own, will not absorb all the cuts but, done well, they can form part of a broader service transformation that can limit the impact of the cuts on the lives of local people.
Simon Parker is director of the New Local Government Network
