By David Williams
7 January 2010
Local government is failing to save money by sharing back-office operations and must be forced by legislation to do so, a leading consultancy firm has said.
Stop, start, save, a report published today by Deloitte, says that a small number of authorities have reduced overheads by combining legal, payroll or finance functions.
However, it says the partnerships have been ‘incapable’ of generating the kind of savings seen in the private sector, and local government has not yet adopted the practice on a large scale.
Deloitte argues that the possibility of redundancies and the career interests of certain individuals within authorities have stood in the way of progress.
The authors also say that councils have been reluctant to act because of upfront costs, and their desire to maintain their independence is conflicting with the need to get the most out of their resources.
However fiscal tightening will make this stance unsustainable, the report concludes. It calls for a new law to oblige councils to share back-office functions, sidestepping the need to build political consensus.
Mark Lawrie, local government partner at Deloitte, said sharing back-office services would not harm local democracy, as councillors are accountable for service delivery, not administrative processes.
‘There is a compelling case for legislation that would require local government to share back-office functions,’ he said. ‘It would move the debate from a question of whether shared services are right to how and when could they be taken forward.’
