As the UK government makes further plans to make cuts in public spending, local councils are increasingly looking at ways to cut costs and increase efficiencies by amalgamating back office services together
By: Niamh Byrne, Online Editor, Shared Services and Outsourcing Network, SSON
|"I think within three years we will see a considerable increase in the number of services delivered in a shared sense not only by Bracknell Council but by all sensible and forward-thinking councils."|
SSON speaks to Councillor Paul Bettison, Chairman of LG Regulation, and Leader of Bracknell Forest Unitary Authority about the effects of cuts in public spending and future plans to integrate shared services with another local council.
SSON: You are currently looking at setting up Shared Services with other local organizations at Bracknell Forest Council. How far have you come along with that process, can you give us an overview to date?
PB: We've always had an open mind with regards to Shared Services at Bracknell Forest Council and we've also had the attitude that shared services can take on many forms. This can be in the form of one authority doing the job for another authority or two authorities coming together to form one vehicle to do the job for all of them, so there are many ways both formal and informal of which local authorities can look at the possibility of sharing services.
Our first toe in the water in terms of shared services was about 12 years ago when we handed over our payroll to Cumbria County Council. That venture was successful for some time, but they moved our payroll over to an external shared services provider and sadly that was not a happy experience. As a result we reviewed that service and eventually brought it back in-house. But in hindsight, it was not a complete failure, because we'd reduced costs and improved inefficiencies more than we would if we hadn't gone through that experience.
Currently, we've got a number of major shared services operations that we are proud of, including delivering our waste collection and disposal in a shared service operation with Reading Borough Council and Wokingham Borough Council. The value of this contract is £680 million over 25 years.
SSON: Northamptonshire County Council recently agreed to form a joint committee with Cambridgeshire County Council, to oversee the creation of joint back office services there. Now they are looking at legal, finance, property and HR, which could save up to £24 million. What are your views on that and is it a model that you could see yourself replicating at Bracknell?
PB: Putting a number of these corporate services together is indeed worthwhile. Many local councils are looking to share services - many have already done so. It's something that we would not rule out in Bracknell Forest, but of course just what services were to be included will always be different from council to council because of existing arrangements.
SSON: What services would you consider bringing together with perhaps another local council?
PB: I wouldn't rule anything out, because the things that we thought would have been too difficult or uneconomic to implement a few years ago are now easier to implement. But we discovered that sovereignty is a big scare for elected members.
SSON: So are you in discussions with other councils about bringing services together?
PB: We are in a number of discussions with other councils. Thanks to the fact that most things are done electronically you now have the opportunity to share services with other authorities situated far away. Actually you don't have to be sharing it with the council just down the road you can still share the services if the council is 3 or 4 counties away or indeed on the other side of the country.
SSON: Obviously there are huge financial pressures on the newly elected coalition government to reduce public spending costs, but some would argue that councils are not very successful in forming alliances in shared services and I wondered what your views are on that?
PB: Well, that might have been the case in the past, but I really don't think it will be the case today. It won't be a case of dare we do it, it will be a case of dare we not?
SSON: So how do you go about getting buy-in from the top?
PB: In terms of getting buy-in from the politicians within the council I would say the pressure is really on them now and as we hear more of the government's plans for public spending cuts we will have to accept that local authorities will have to take their share of those cuts. The pressure has increased and we have to look at things that we didn't look at before and sharing services very often gives us an opportunity to reduce the cost without reducing the quality of the service provider. In fact sometimes you can enhance the quality of the service provided.
SSON: How do you think progress within the public shared services sector compares to that in the private sector?
PB: Our progress thus far has been good and it’s improving. I predict that it will far outstretch the success of shared services within the private sector, because local authorities do not compete with each other. If my council offers a better service than the neighboring council, I still can't just go and poach their clients. What I can do however is offer to deliver that same service to the neighboring authority. If we take that on, cost benefits accrue for both councils, there are no winners at the other's expense, there are only joint winners because both authorities stand to save money.
SSON: When do you predict this change will take place and what direction do you hope Bracknell will take?
PB: Bracknell Council has agreements with other authorities to deliver services on our behalf and on their behalf and we will work together with other authorities on other projects. As mentioned previously there is no set way of doing shared services; it's a question of finding the best solution for the partner councils to suit their own individual needs.
SSON: So what are the main objectives for Bracknell Council within the next three years?
PB: I think within three years we will see a considerable increase in the number of services delivered in a shared sense not only by Bracknell Council but by all sensible and forward-thinking councils.
SSON: Do you have to spend a lot of money to save money and how soon do you expect return on investments?
PB: You always have to spend a little to investigate the potential for sharing services and for making savings worthwhile. But the amount that you have to initially spend shouldn't be a deterrent. The costs of setting something up can be built into the service itself so that you can recoup those costs from the savings. It's a question of finding the right solution for your quality. There is no one unique way of sharing a service with one council.
SSON: Who are you benchmarking against either locally or perhaps within Europe?
PB: We use the Improvement and Efficiency Partnership from the South East (IESE) as a benchmarking aid. They have provided various benchmarking tools for particular services.
SSON: How is Bracknell Council coping post-recession, what changes have you put in place and in what financial state is your house in today?
PB: Bracknell Forest Council has weathered the recession well in terms of our residents. We were fortunate enough to have a thriving local economy which is based mostly on an IT and a knowledge based economy. Our local businesses often provide the solutions for other businesses to weather their storm during a recession.
As a council we have had to look at driving cost out of the back office provision to enable us to keep the money where our residents want to see it spent - which is on the delivery of those front line services.
SSON: Have any services been affected due to the recession and since the coalition government has come into power?
PB: We have had to make some of our staff redundant, but I doubt the public would recognize that.
SSON: How will the proposed cuts affect you, say in the next three years?
PB: Over the next three years, we may well find ourselves having to take some fundamental views about whether or not we want to keep delivering certain services - salami slicing will no longer take us to where the government wants us to be. We have to review the services that we currently deliver and ask assess whether we really need to deliver that particular service or allow someone else to do it?
SSON: Do you have such services in mind?
PB: Many councils have to put money into leisure services, and they are beginning to ask themselves whether they are the best people to run the service, or whether they should just allow the private sector to take over them. Likewise some councils are wondering whether they should still run libraries. We've had a fall in demand for libraries in recent years because people are turning to electronic media for getting their information. It's so easy to order a book on Amazon and it arrives the next day.
SSON: I know one area you are very hot on is the environment - how are you reducing costs here?
PB: Very often the green agenda does have a secondary benefit, the fact is that you are not only saving the planet, but you are saving money as well. So if you insulate your building, you are also reducing your carbon footprint and the amount of power you use to run that company which saves more money.
SSON: You are currently using the Agresso system, how is that assisting with cutting costs across different platforms?
PB: Undoubtedly the Agresso system has played a huge part in getting everything under control. Having an integrated system, we have to be more efficient, we are actually now using our computer platform more efficiently thanks to the Agresso system.
SSON: If you decided to incorporate other external services or merge some local services together, do you think you would be able to adapt the Agresso technology to enable you to do so?
PB: When looking at sharing services and working with external bodies, you have to consider whether or not your computer system and platform is up for it. Agresso has a lot of experience in that field. I would have great confidence in Agresso being able to fulfill not only our present needs but our future needs as well.
SSON: What technology do you think will cut costs and add value to your council in the future?
PB: One technology that I think holds great potential for the future is RFID technology. There is no limit to how RFID can be used and utilized within local authorities.
SSON: There are a number of Indian providers gaining momentum in the UK public sector space, for example, TCS is currently working with the Cardiff council. Do you think Bracknell would consider outsourcing services to one of these providers who had offerings in the UK?
PB: I would have to consider anything that stacked up financially, but I will always look for guarantees of service and back ups, because we are delivering a service that is relied upon 24/7.
SSON: So, at the moment it is very much watch this space?
PB: Yes, the one definite thing is that over the next few years in the local government arena there will be no boredom!