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Agenda sdf 1

Open Services

Open ServicesThe changing face of service delivery

‘Working in a shared environment is enabling us to make the most of our investments’ p10

‘Lack of money is the spur to looking at alternative service provision’ p6

‘Our partners need to be fl exible. One size does not fi t all’p14

‘The white paper raises the concept of ‘open commissioning’ p4

‘Done properly, sharing can drive out costs’ p18

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LGCplus.com 29 September 2011 Local Government Chronicle 1

SUPPLEMENT EDITOR

One of the curiosities of being a journalist is sometimes it is the minor things that, when you stop and reflect, actually speak volumes.

This supplement started out life intending to look at shared services, something, of course, the vast majority of local authorities know and understand inside out. Ever since the bad old days of CCT, contracting, collaborating with, managing or even just knocking the heads together of a plethora of outside providers has been a day-to-day reality.

In the current financial climate, there is a recognition and acceptance that the ‘deliver-it-all’ local authority has gone and (probably) will not come back. This acceptance may be grudging or it may be embraced as a once-in-a-generation opportunity.

So, all straightforward enough. Except that as we chewed the fat with contributors and sponsors it became clear that the transformation is not just about ever more shared services, collaborations and partnerships. There is also something deeper happening; something that, with admittedly a nod to the Open Public Services white paper, we believe can aptly be called the development of ‘open services’.

Journalistically it’s a pithy line of course, but we believe it does neatly illustrate how the relationship between partners within local government – whether public/public, public/private, public/third sector or a mix – is evolving.

As well as a conventional buyer/supplier relationship, there is a recognition that true partnerships need to be ones where risk, responsibility and governance are shared; where solutions are generated rather than imposed; where both the relationship and the delivery are ‘open’ and predicated on equal measures of trust and respect.

There’s still a long way to go and this is a picture far from being in focus, not least because, as we highlight on p4, of the confusion about what the government actually means by ‘alternative service delivery’. As was also made clear in the industry roundtable debate on p6, the current ‘messiness’ of local government service delivery – with familiar models dissolving into a brave new, yet uncertain, world – urgently needs to be resolved.

Nevertheless, what is apparent from the columns, case studies and thought leaders in this supplement is that there is no shortage of innovative thinking, modelling and collaborative working, both within local government and being imported from external sources. To this extent, local government leaders, quite clearly, are ‘up’ for the new service delivery agenda – what they need are pointers about where they are going and how they are expected to get there.

More widely, however, could it be, when we emerge from the immediate furnace of the CSR and transformation agenda, the new models of service delivery that we find have been forged as a result might become something of real long-term worth and value? Watch this space.

Nic Paton

Leader

‘‘ What is apparent from the columns, case studies and thought leaders in this supplement is that there is no shortage of innovative thinking

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THE BACKGROUND The government’s Open Services white paper offers the possibility of ‘alternative service delivery’. But what, asks Mark Smulian, does this really mean? Is it merely a return to compulsory competitive tendering under another name, or does it offer the potential for a genuinely different way of working?

ROUNDTABLE A panel of local government experts met under the aegis of LGC and Ernst & Young to discuss the challenges the sector is facing in the wake of massive budget cuts and the government’s agenda to change the face of local service delivery

The chapters

MODELLING PARTNERSHIPS The whole concept of shared services is a learning curve that has required a change of attitude for success to be achieved, say Wim van Vuuren and Dominic Wallace PLUS case studies on how Flintshire CC transformed its IT infrastructure and Vale of White Horse and South Oxfordshire DCs tackled the issue of governance

POOLING RESOURCES Council chief executive Nicola Bulbeck shares her experience of overseeing innovative changes PLUS case studies on how Chorley and South Ribble BCs and Worcester City Council have successfully moved to shared financial systems and on how Eastbourne BC is reaping the benefits of an ‘agile working’ project

VIRTUAL SHARED SERVICES Many shared service arrangements aren’t as innovative as they might look at first sight, says David Clark. PLUS Q&A on virtual shared servicesPLUS case studies on Bromley LBC and North Somerset Council, which have both benefited in different ways by taking an innovative approach to service provision

Contents

‘‘ I’m optimistic that by trying things around the country we’ll fi nd some that work really well, but we need to get through the messiness Daniel Ratchford, strategic director of environment and leisure, Sutton LBC

4 Local Government Chronicle 29 September 2011 LGCplus.com

It’s either a brave new world of people power, or a return to the constraints of compulsory

competitive tendering.These starkly different

possibilities perhaps show the degree of confusion about ‘alternative service delivery’ as described in the government’s Open Public Services white paper.

Social Enterprise UK complains of a lack of detail and financial support, the CBI sees the good times rolling, while Unison – slightly oddly – expects more procurement fraud.

The white paper raises the concept of ‘open commissioning’, under which local government officers should “consult on and be challenged by potential providers from all sectors on the future shape of service”, and “transparently link payment to results”.

Services would not merely be forcibly opened to the private sector, as in the 1980s and 1990s, but potential providers would have “the right to propose new ways to deliver services” and the public could propose that providers were changed.

Launching the white paper in July, Cabinet Office minister Oliver Letwin said: “When public services aren’t up to scratch, those who are well off can pay for substitutes. But for those who are not well off, there is no opportunity to pay for substitutes. So we need to

An alternative way of looking at servicesMark sMulian explores the potential of the Open Public Services white paper

“There are not yet enough competent and well-run social enterprises because this is still a new agenda.”

Mr Copestake suggests councils could encourage their expansion by setting up ‘shadow’ social enterprises among staff whom they still employ but in all other ways act as though they were in a mutually owned business.

Social enterprises are enthusiastic but cautious. Ceri Jones, head of policy and research at their collective body Social Enterprise UK, says they are at present unevenly spread; there are

‘‘ You need to agree non-negotiable outcomes, but do not tell the social enterprise or voluntary sector body how they have to deliver them Martin reeves, chief executive, Coventry City Council

The background

give everybody the same choice in, and the same power over, the services they receive that well-off people already have.”

The aims are ostensibly rather different from CCT. But will the result be similar?

Peter Eckersley, an adviser to the performance network of the Chartered Institute of Public Finance & Accountancy, fears so. “My judgment is that if implemented this will be worse than CCT,” he says.

“The proposals here, taken with the Localism Bill, would see providers challenging local authorities over whether their services were good enough, and they will pick and choose what they will say they could do better,”

This pessimism is countered by the Office for Public Management thinktank, which has been advising the Cabinet Office on mutuals.

Its head of communications and strategy Phil Copestake says it is “in general terms right behind the aims of the white paper to open up provision to mutuals and social enterprises”.

He says the OPM believes that working for a mutual can mean “really significant potential gains in terms of greater productivity, staff satisfaction and engagement and frontline innovation, but we’re acutely conscious that there’s a great deal of work needed”.

But even the OPM admits: alam

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An alternative way of looking at services

plenty where councils have historically encouraged them, but fewer elsewhere.

She explains: “There’s a lot in the white paper for our sector but we are concerned by the lack of details on how this will operate financially.

“Things like payment by results put a lot of responsibility on us, and the implications of that have not been thought-through in any detail, and there is no sign of what kind of support would be provided,” she adds.

Ms Jones contrasts this with the NHS’s experience in 2008. “The Department of

Health Social Enterprise Innovation Fund was there, so things happened, but if there is not that kind of investment it just won’t.”

Even the CBI claims to welcome the potential diversity of suppliers – not just private firms – encouraged by the white paper.

Emma Watkins, its head of public services policy, says: “The emphasis on the third sector and social enterprises is there, but it is important to have a diversity of providers and that the best one does the job, whether they are private, third sector, social enterprises or a mix of them.”

To this end the CBI is already working with the Association of Chief Executives of Voluntary Organisations: clearly it can see which way the political wind is blowing.

So can Unison, which is seeking to discredit the white paper before any reforms begin by suggesting that outsourcing increases opportunities for impropriety.

General secretary Dave Prentis says: “Billions of taxpayers’ cash is wasted during the outsourcing of public services. The Open Public Services white paper can only lead to the public paying a higher price for [procurement] fraud.”

But does the white paper really herald dramatic changes? Martin Reeves, chief executive of Coventry City Council, points out

there is already a mixed economy of in-house, outsourced and partnership provision and that alternative service delivery “is not a seismic shift”.

He says the best way for councils to oversee contracts is to be clear about the key outcomes sought, not to micromanage providers, CCT-style.

“You need to agree non-negotiable outcomes, but do not tell the social enterprise or voluntary sector body how they have to deliver that,” he says.

“You’re fooling yourself if you focus on a raft of metrics. You only need three or four key outcomes driving this and to be clear what will happen if they are not delivered. But do not hit providers with large amounts of paperwork.”

Councils will need the in-house expertise to manage contractors and to hold them to account for the provision of services for which the council remains, after all, legally responsible to the public.

David Clark, director of Solace Enterprises, says success comes from “getting a continuing relationship of trust, not relying on a contract”.

He says contracts are by their nature instantly out of date and “abhor innovation”, whether by a social enterprise or anything else.

“For example, if you were dealing five years ago with

young people with disabilities you wouldn’t have put in a contract that they should have free iPads, because they didn’t exist, but it’s one of the most useful things you can do,” Mr Clark says.

“You end up with contracts set in concrete. Local government needs to think about how it draws up contacts that allow for innovation, and the supplier needs to accept it will not know exactly what it has to do for the next five years,” he adds.

Mr Eckersley, though, sees conflict between two government policies, making such harmony hard to find.

“On the one hand the government is pushing personalised services and on the other it wants councils to use ‘any willing provider’,” he says.

“If you were really talking about using external providers for personalised services the contracts would have to be so flexible as to be difficult to hold anyone to account, or so over-specified to outcomes that they would be impossibly expensive,” he adds.

Ultimately, perhaps the best contract will describe some outcomes and simply say “do this within five years”.

The question then is: will an array of competent, willing and solvent social enterprises, community groups and mutuals come forward, or will the private sector be the real winner?

LGCplus.com6 Local Government Chronicle 29 September 2011

The impact of public spending cuts has turned the long-familiar local

government landscape intoa mess, and it’s about to get messier.

Whether officers and councillors see that as a threat to be deflected, or an exciting opportunity to be embraced to redesign local services, depends on local politics, ambition and circumstances.

Lack of money is the spur to looking at alternative service delivery – through shared services, with the voluntary sector, private firms, social enterprises or community groups – but could this upheaval actually result in something better for the public than they received in the ‘good old days’ of free-flowing public money?

Participants at LGC’s roundtable debate in London earlier this month were in no doubt about the ‘messiness’ of local government, as the familiar pattern of every council providing every service dissolves.

But they were also, mostly, energised by the possibilities, though sceptical about the extent to which the public really wants to volunteer to run services on the Big Society model.

Whether local politicians feel the same way is a moot point. They have to face voters on the receiving end of this new ‘messiness’, who may be distinctly

Making sense from messinessLGC and Ernst & Young’s roundtable explored how the sector can tackle uncertainty and upheaval, writes MARK SMULIAN

FOreWOrDSTEPHEN CHURCH Head,& PAULA SPEIRS Director,Local Public Services, Ernst & Young

The roundtable discussion highlighted a variety of alternative delivery models being considered to address the funding challenges local authorities are facing. The focus of the past few years has largely been on outsourcing and the contracting out of services (to the private sector, other public sector bodies or not-for-profit and local community organisations).

In addition, sharing chief executives, merging back offices and joining forces to procure goods and services are also predicted to save councils millions of pounds over the next decade.

Delivering services differently in such ways remains a vitally important element of the local government reform agenda. But how services are delivered is only one part of the picture. Do these really provide sustainable solutions, not only financially, butalso against the role that councils have in addressing wider social and economic issues?

Based on the discussion, and from our experience in the sector, it is clear that councils need to take a more strategic view of how services are commissioned to meet the needs of their local communities. This is not about councils taking a universal approach to service delivery, but rather agreeing at council level common design principles to frame the way services are commissioned.

Authorities may well have to work differently, manage (and be managed) more innovatively, present themselves and communicate in new ways, agree ground-breaking (and sometimes challenging) partnerships with organisations, and generally operate in a way that in time will be very different from the local authority of today.

Though extremely challenging, the funding gap presents the public sector with the opportunity to honestly assess both the scope and shape of services currently being delivered; a robust and honest examination of priorities as well as areas to ‘protect to invest’.

Local areas typically spend a disproportionate amount of their resources on a small proportion of their population. If we took a more holistic view of these issues, say, looking at the needs of an entire family rather than how individual family members engage with services, we could find ways to significantly reduce overall spend and target resources more effectively.

The roundtable discussion recognised the need to explore alternative commissioning models. In our view, local authorities need to do this while also challenging fundamentally the future scope of services being provided.

Taking a priority-based approach to commissioning of services will provide the platform to examine the scope of future services and critically enable a more affordable and sustainable model of services that responds to the future needs of our communities.

Funding gap means a focus on priorities

FOREWORD SUPPLIED BY ERNST & YOUNGwww.ey.com/uk/localgovernment

LGC Roundtable in association with Ernst & Young t

unimpressed to find that a service has ceased, or that they are expected to volunteer to provide it for themselves.

Jim Graham, chief executive of Warwickshire CC, said the government’s Open Public Services white paper, which seeks to encourage alternative models of service delivery, contained, “really interesting but naïve propositions”, and he felt it was local government’s job to “help ministers better understand” what was possible.

Mr Graham said there was a widespread lack of imagination about the shape of the public sector, which the white paper did not address, with “too many pe

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Making sense from messiness

‘‘ We must face up to the reality that we need fewer public organisations and a smaller, leaner and more efficient state. We’ve got to kill off organisations Jim Graham, chief executive, Warwickshire CC

LGC Roundtable in association with Ernst & Young

back to normality, and a lot of energy is going into keeping the organisation going as an outcome. That’s not what’s needed,” he added.

Many councillors were “desperately unhappy” about having to make cuts and radically change familiar services, he added.

Anne Gibson, head of human resources at Norfolk CC, saw a general reluctance to think in new ways to meet new financial conditions, partly because officers felt uncomfortable outside their area of expertise.

“People need to think outside the box and beyond their future job, and that’s a big ask in the current climate,” she said.

“They come up through particular professional routes and if asked ‘are you a professional or a manager’ a lot go back to their professions. That gets in the way of transformation,” she added.

Sutton LBC strategic director of environment and leisure Daniel Ratchford also saw the danger of an opportunity sliding by: “I’m worried that in five years’

public bodies already, and from citizens’ perspective there is not a clue which does what”.

He explained: “We must face up to the reality that we need fewer public organisations and a smaller, leaner and more efficient state. We’ve got to kill off organisations.”

While many senior officers looked forward to the challenge of making this change happen, he admitted that politicians might be less enthusiastic.

“I am sceptical that members collectively are positive,” Mr Graham said.

“Some are grimly hanging on through difficult times in the hope that in four to five years’ time funding comes

time we will not have grasped the nettles and that lots of members and officers just hope we will get through this period, and do not have the sense of excitement to grasp the messiness of the moment.”

He felt that out of ‘messiness’ new shapes of service provision might emerge from trial and error.

“My fear is it will get even messier because we are all outsourcing using social enterprises, resident groups and sharing services with different councils in a patchwork of shared services.

“But I’m also optimistic that by trying things around the country we’ll find some that do work really well, but we need to get through the messiness for a few years to find interesting and clever responses,” he added.

Abdool Kara, chief executive of Swale BC, felt that making sense of the ‘messiness’ was not helped by “the different approaches of the Whitehall departments and the atomisation of state into academies, police reorganisation, health commissioning and so on”,

t

PartiCiPants

Ian Bancroft area relationship director, Knowsley MBCPaul Blantern chief executive, Northamptonshire CCStephen Church partner and Paula Speirs director, local government services, Ernst & YoungAnne Gibson head of human resources, Norfolk CCJim Graham chief executive, Warwickshire CCAbdool Kara chief executive, Swale BCEmma Maier editor LGC (chair)Jon McGinty deputy chief executive, Aylesbury Vale DCDaniel Ratchford strategic director of environment and leisure, Sutton LBC

This roundtable discussion was sponsored by Ernst & Young. The topic was agreed by LGC and Ernst & Young. The report was commissioned and edited by LGC

Abdool Kara

Jon McGinty


which meant councils had increasingly complex partnering arrangements.

He pointed out the limitations of outsourcing for a smaller council. Swale had contracted out major services such as waste and cleansing and would offer community assets, including allotments and football pitches, to parishes.

“That leaves a small core of services internally that are either strategically important, or there is no market for them, and the big issue will be universal credit because our biggest remaining services will be revenues and benefits, and if that goes ahead then our critical mass disappears,” Mr Kara said.

“The debate about core and non-core services is a red herring issue, because if I go below critical mass I am no longer viable,” he added.

Officers felt themselves under pressure to advise members on what services were ‘core’ or not, with the implication that the latter were not important.

Stephen Church, partner, local government services, at Ernst & Young, asked: “You have to decide what top priority is in a future service provision model, but if something is not a priority, what do you do with it?”

Panellists noted that this political distinction was often challenging, with members still reluctant to designate non-priority areas, despite spending constraints.

t LGC Roundtable in association with Ernst & Young

‘‘ You have to decide what top priority is in a future service provision model Stephen Church, partner, local government services, Ernst & Young

(Centre) the roundtable discuss the drastically changing local government landscape. (Clockwise from top left) chair Emma Maier, Jim Graham, Paula Speirs, Paul Blantern, Ian Bancroft and Daniel Ratchford

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Northamptonshire CC chief executive Paul Blantern said long-term objective were important in setting priorities. He gave the example of a £2m fund set up by Northamptonshire to attract jobs through foreign investment, with the long-term objective of building a prosperous county.

It was also clear that within priority areas further

differentiation is also needed to ensure that councils are achieving the most impact.

Ian Bancroft, area relationship director at Knowsley MBC, raised the point that worklessness in deprived communities might be affected by a range of other issues. “In some disadvantaged communities their educational aspirations are so low, so should one

Anne Gibson

29 September 2011 Local Government Chronicle 9LGCplus.com

“Prospectors are the ones where you need to make it sound trendy and engage them.

“Settlers think things used to be better in the olden days, and you say to them ‘if you think you can do it better, why don’t you do it?’”

He said these groups were found in 40%, 30%, 30% proportions across the county, regardless of age or economic status.

“We see it as part of our learning to make sure we differentiate how we sell the same messages to different audiences because we don’t do that very well, do we?” Mr Blantern said.

Mr Graham warned that some services were not amenable to alternative delivery: “I’ve never found anyone else daft enough to take on the risk of protecting vulnerable people, because when this goes wrong, careers get damaged, you get in the newspapers.

“Libraries can readily find Big Society solutions, but it is really difficult for care, no one would take it on, including the private sector,” he added.

There was also doubt about the enthusiasm and ability of community groups and parish councils to take on service delivery.

Mr Kara said Swale’s parishes were “a mixed bag of ability and capacity” while Mr Graham felt the Big Society approach expected “the whole

universal service be speech and language?” he asked.

“We provide it as a specialist service, but do we provide it right across the borough or just in those communities that need it? The danger of going down the road of specialist services is that we are providing for the few when actually we need to scale up the interventions that will have the most impact,” he added.

Involving communities in providing services has been raised as one solution in lower priority services. But panellists felt that

LGC Roundtable in association with Ernst & Young

‘‘the danger of going down the road of specialist services is that we are providing for the few when actually we need to scale up the interventions that will have the most impact Ian Bancroft, area relationship director, Knowsley MBC

country to act like a turbocharged parish council, and that’s not the real world”.

Aylesbury Vale DC deputy chief executive Jon McGinty warned that procurement rules hampered alternative service delivery.

“I’m a great believer in competition but I think public procurement works against the interest of public value and competition,” he said.

“Barriers to entry with European procurement legislation are such that a number of markets we would like to be engaging with are very small and closed.

“When you talk about street cleansing and a parish council ‘we’ve got someone who can open and close the toilets’ European procurement just pulls you towards the economy of scale argument, which works against decentralisation,” he said.

Paula Speirs, director, local government services, Ernst & Young, said she saw among councils “a lot of discussion about alternative service delivery, outsourcing, and lots of different models.

“It’s not about getting one thing that is right for each service. There is definitely not one size that fits all,” she added.

One size may indeed not fit all. But it will be some years before it becomes clear from the current ‘messiness’ which sizes of alternative service delivery do indeed fit.

understanding communities’ capacity would be essential before any attempt to implement Big Society solutions, such as handing services to volunteers or local trusts.

Mr Blantern said that, while assessing communities in Northamptonshire, “we found we had three groups in all our communities: pioneers, prospectors and settlers.

“Pioneers embrace the Big Society message on their own, and our message to them is giving them the challenge.

This roundtable discussion was sponsored by Ernst & Young. The topic was agreed by LGC and Ernst & Young. The report was commissioned and edited by LGC

Abdool Kara

Stephen Church


You only have to listen to the feedback from many of the 600 members

and senior officers who have been through the tools and techniques seminars that are part of our postgraduate certificate to identify the key ICT challenges in shared services.

These challenges have little to do with counting keyboards, gigabytes or sharing data centres. Instead they highlight the organisational dependency on ICT and how this needs to be reflected at the centre of all organisational change programmes.

The main change of attitude should be to involve the heads of ICT in the early discussions on shared services.

They tell us that often the first time they hear about the shared activity is when a draft of the business case drops into their lap for comment.

This echoes the concerns revealed in research we carried out into shared services published in 2009.

Of the 30 shared service managers asked “What would you do differently if you were to start again?” almost 70% said they would have wanted to engage the ICT team earlier and put in place shared ICT at the beginning of the project.

For example, at the Mid-Kent Partnership, they are working on a 10-year IT

ICT is key to transformationWIM Van VUUrEn and doMInIC WaLLaCE explain why attitudes to shared services are changing – and not before time

FOREWORDLYnn FErgUson Local government, health and education industry leaderIBM and Ireland

At a time when there is increasing pressure on councils to reduce costs and re-evaluate the services they offer, why aren’t there more examples of public sector shared services in place? The truth is it isn’t easy, whether we are talking about the sharing of a single function across multiple customers or the combining of separate services to deliver something more than the sum of the individual parts.

So is there a role for the private sector to work with their public sector counterparts in trying to secure a reduction in costs and an improvement in the quality of service? We believe the answer is “yes”.

On the one hand there is the traditional role of service delivery partner, where the private sector takes on responsibility for delivering the services on behalf of the public sector organisation(s).

But in order to maximise the benefit derived from a shared service arrangement we believe there is another role the private sector can undertake, one focused on working with all of the partners involved.

We believe a shared vision is essential and the following things need to be thought through:

Governance structuresl Identify and involve all stakeholders who will set a common vision.l Seek citizens’ input. Technology is an enabler, so consider social media-enabled governance.l Creating a long-term plan makes measuring success easier.l Consider creating a cross-public sector body that defines the vision and acts in unity to deliver it.

Smarter return on investmentl Measuring and determining not just the economic but also the societal and environmental value of actions to be taken and services to be delivered.l Understanding the ‘system’ of systems.l Identifying the interconnections, the intended and unintended consequences of shared working.

Commercial structures/new modelsl New commercial models will be needed. This is not just about public/private sector commercials, but public/public, public/third sector and maybe other variants.l It is important for the private sector to know who the customer is, where the revenue stream will come from and to create a model that allows for long-term partnership, not just a buyer/supplier relationship. Plus a commercial model which allows for flexibility as relationships change and develop over time.l Understand the difference between commercial and strategic partnerships and determine which is appropriate.

The evolving role of private partners

ForEWord sUPPLIEd BY IBM www.ibm.com/easyaccess/publicsector

Modelling partnerships t

roadmap to support their joint activity.

Andy Cole, head of customer access, transformation and delivery at Tunbridge Wells BC and leading on ICT for the partnership, tells us that he believes “strong leadership is critical” to success.

“Senior managers must understand both the risk and potential rewards. For effective shared services, it is essential that a commitment to a shared IT infrastructure is in place.

“Not only is it more efficient in its own right, but the real gains come when IT becomes the foundation that allows other shared AL

AMY

Managers can learn about shared services at Canterbury Christ Church University


ICT is key to transformation

services to take shape,” he emphasises.

Another challenge is trying to engage decision makers in the use of ICT as an enabler of the new, and as a platform for innovation.

Andy Cole, again, argues to us strongly that: “Working in a shared environment is enabling us to make the most of our investments and build services that can radically improve how we meet our customer needs. We simply could not make the most of our investment in technology if working alone.”

This is echoed in the Planting The Flag paper released by the Society of Information Technology

Management for its conference earlier this year (www.socitm.net/downloads/download/422/).

This set out “three core principles” of which the first is the absolutely critical: “collaborate, share and re-use assets”.

Perhaps, also, the private sector has the right to offer a significant contribution to the enabler and innovation agenda.

We have been learning from, for example, Rory Gray, director of local government and education shared services at EMC2, one of the world’s largest cloud-computing providers, which is working with both the NHS

‘‘ Senior managers must understand both the risk and potential rewards. For effective shared services, it is essential that a commitment to a shared IT infrastructure is in place.andy Cole, head of customer access, transformation and delivery, Tunbridge Wells BC

and local government in shared service activities.

His take is that “one of the benefits of large private sector providers, who work across a wide range of partners, is that they can bring tried and tested strategies to new partnership working”.

Mr Gray adds: “Heads of ICT in local government can appreciate this benefit as they do not always have the opportunity or time to experience other sectors, or access the leading-edge technologies.

“However, sometimes leaders do not recognise the prophets in their own land but will listen to external private sector resources like ourselves.”

The final area in which ICT can be applied to ensure that quality of service is not eroded by partnership working is through computer modelling of what a new service could look and feel like.

This is a kind of “try before you buy” concept. Alasdair Robertson, who lectures on the Canterbury Christ Church programme, has developed a

range of shared service computer models.

“One of the problems for the leaders of councils and senior management is having certainty that the new shared service will work when it is switched on. If they can play with a computer model first, then it builds their confidence to commit funding and resources to the work,” he explains.

If we were to add a final thought on how attitudes to shared services need to change, then it would be that local government must stop members and officers entering into shared service activity without the necessary skills and knowledge.

Many shared services are only just stumbling their way to success at the moment, led by insufficiently trained managers, thereby potentially causing serious reputational damage to both the individuals and the councils concerned.

Wim van Vuuren and dominic Wallace are lecturers on the Canterbury Christ Church University Postgraduate Certificate in shared services


Flintshire CCWhen Flintshire CC started a project six years ago to transform its IT infrastructure and reduce power consumption and carbon emissions, it turned to a long-standing supplier, IBM, and one if its business partners, Imtech, to help it.

The aim of the three-year programme was to move to a more sustainable ICT model, remove 80 physical servers from Flintshire’s IT infrastructure and ‘virtualise’ them, plus cut capital and operating costs. Virtualisation is the replacement of a physical or hardware-based server with an alternative.

Because of IBM’s long history as a supplier to Flintshire and the fact that a formal partnership agreement was already in place, there was no need for a separate, overarching governance arrangement for this particular programme, says John Thomas, Flintshire’s ICT operational services manager.

However, there were other key considerations and operational arrangements that underpinned the project, together with the necessity to have in place Official Journal of the European Union framework agreements around procurement with ICT suppliers.

Mr Thomas says it was important at the outset to determine exactly what improvements could be made in consultation with

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partners. To achieve this, the council undertook a so-called ‘Cobra’ (Corporate Brand and Reputation Analysis) study with IBM, and visited IBM’s Greenock facility to see new technology in action.

Project and programme governance was provided through Flintshire’s project management methodology, which is based on ‘Prince2’.

Mr Thomas, Flintshire’s head of ICT and customer services Chris Guest and representatives from IBM and Imtech also sat on a project board to monitor progress. Below that, a project team managed the day-to-day tasks across the three organisations.

Mr Thomas says one of the key factors was the strength of the account management relationships with IBM and Imtech – and the fact that Flintshire outlined its expectations very clearly from the outset of the project.

“If the account manager changes, you can lose

Case studies: importanCe of robust GovernanCe

continuity if you don’t get an equally good replacement quickly,” says Mr Thomas.

“We had various account managers as time went by but IBM recognised that we wanted continuity. So if they changed the account manager, they had to tell us before they changed. If you only find out later, that’s not a partnership, that’s a supplier.

“The account management was the glue for the whole programme,” he adds.

Mr Thomas says these close relationships with partners’ account managers can have knock-on benefits; for example, their knowledge of the depth of their own business and the wider market means they have pointed Flintshire towards suppliers to meet needs outside the scope of their own partnership.

Flintshire’s relationship with IBM and Imtech staff was – and is – so close that Mr Thomas says it’s hard to tell them apart from the council’s own employees.

But Flintshire has also been determined to keep consultancy to a minimum and partners are penalised if consultancy tasks are not completed on time.

“Each project is supported by a statement of work that defines what’ll be delivered and how many days of consultancy are required,” Mr Thomas says. “If it’s not completed during that time, it’ll be completed at the cost of the partner.

Modelling partnerships

‘‘ If they changed the account manager, they had to tell us before they changed. If you find out later, that’s not a partnership, that’s a supplier John Thomas, ICT operational services manager, Flintshire CC

The way change is managed has a critical bearing on the success of the service transformation, writes gordon Carson

Flintshire CC’s John Thomas (inset) is overseeing the county’s IT transformation


governance committee established by the authorities was for the financial contract, Mr Buckle says. In all other cases, the governance arrangements of the individual authorities continue to apply.

“When we let our waste contract, both cabinets met in the same room but had separate meetings to agree on the contract, and the review of that contract is done by the two scrutiny committees independently with the same information,” he adds.

“It’s important that they can do independent scrutiny and that one authority is not put in the position of saying they are happy because the other one is.”

Mr Buckle says this means personal relationships are crucial. “There is great trust between the councils. They feel they are equal partners and there’s no perception one is getting a better deal than the other,” he says.

The governance arrangements of the individual authorities are broadly similar, says Mr Buckle, though there are some important differences.

For example, individual cabinet members at Vale of White Horse can decide to let contracts of a higher value than their counterparts at South Oxfordshire without the need for full cabinet involvement.

Mr Buckle admits the light-touch approach to

governance could be risky, particularly if the authorities came to different decisions.

But he says this can be overcome through constant dialogue with members so their support for proposals is secured before meetings to make final decisions.

Mr Buckle says about 80% of the councils’ services are now integrated through joint contracts or bringing teams together. This will continue over the next 12 months but the next major development will be the tendering for a joint leisure centres contract in 2014.

He also says the authorities are considering establishing joint scrutiny committees for some issues.

Mr Buckle advises other councils considering a shared services model to focus on “quick wins” at the outset. “Let them bed in and show the benefits,” he adds.

In the case of Vale of White Horse and South Oxfordshire, this meant integrating human resources teams at the start, for example, while leaving planning and housing to a later date.

“Three years ago, the political view across the councils was they didn’t want to look at integrating planning and housing,” he says. “But three years on, they are fairly relaxed because they’ve seen it working in other services.”l For more information, contact: gavin Walton, [email protected]

Case studies: importanCe of robust GovernanCe

“The statement of work and good project management are absolutely critical,” he adds.l For more details, contact: John Thomas on [email protected]

Vale of White Horse and South Oxfordshire DCsThe importance of getting the governance right before you even get to the technical nitty-gritty of shared services, whether sharing technology or delivering shared services in other areas, has been highlighted by the experience of Vale of White Horse and South Oxfordshire DCs.

They started working together through a joint financial contract in 2006 which extended into plans for shared management which were developed from 2007-08.

This partnership led to the appointment of a single chief executive in place of two, the award of a joint waste services contract to Verdant, and the integration of service teams.

Despite this major transformation, the councils did not introduce a whole new set of governance arrangements, says joint chief David Buckle.

“On the whole we have gone fairly light on governance,” he explains. “We took a decision at the outset that we weren’t going to throw all the existing arrangements up in the air and bring in new ones.”

The only formal joint

Modelling partnerships

‘‘ It’s important that one authority is not put in the position of saying they are happy because the other one is david Buckle, chief executive, Vale of White Horse and south oxfordshire dCs

Sponsored by IBM. The case study subjects were agreed in partnership with LGC, which independently commissioned and edited the report. IBM is partnering with local public services organisations to transform the lives of their citizens. It does this through the application of information in intelligent ways and by supporting organisations in the

definition and delivery of their desired social, economic and environmental outcomes.


Because local government offers such a wide range of services, planning

changes or getting ‘more from less’ by pooling common resources across councils and their providers can become unhelpfully complicated.

Wherever possible, I apply a set of tests to manage the risks that surround potential changes to existing systems and processes.

These can be encapsulated in the question: “How will the proposed change help our customers and the organisations that I lead?”

These tests boil down to six aspects of delivery. How will any planned changes: l Increase self-service options for local peoplel Reduce unit and transaction costsl Maintain or improve citizens’ overall satisfactionl Deliver local services fairlyl Reduce preventable demand and waste; andl Improve learning from the customer and their experience.

I need to be clear in both councils exactly ‘what ICT is for’ and how it can be effectively managed to support the achievement of these related (but sometimes divergent) objectives.

Realising these goals – and showing government, partners or auditors how we are achieving them – requires a responsive culture.

It needs new ways of

Making changes work for you Joint chief executive NIColA BUlBECK shares her experience of transforming service delivery

FOREWORDBIll loUGHREy managing director local governmentCivica

It’s no surprise the government’s wish to reduce the budgetary deficit with front-loaded savings is forcing local government and its partners to drive out costs with even greater intensity.

It has been apparent to public sector professionals for some time now that the coalition’s ambition is to foster collaboration between town halls and different service providers – within the public as well as the private sector – meaning new approaches to sharing resources have to be high on the agenda.

Chief executives, after years of efficiency drives, clearly don’t need to be told to suck eggs with regard to cost efficiencies. What they should be looking for, rather, are service partners with flexibility in scaling-up delivery models and, in particular, ensuring effective governance of shared services or new outsourced services.

Council chiefs know the speed of the reforms – particularly for such sweeping changes as those in the proposed Welfare Reform Act – means they have to provide scaleable and flexible service capabilities that automate multiple and often repeated administrative processes, such as change of circumstances notifications.

For some district and borough councils, especially those covering a large geographical area, the reality is they will most likely need to become a flexible part of a shared hub, either in partnership with a county, or with neighbouring or similarly challenged colleagues.

In this ‘age of austerity’ councils want the most flexible framework – previous large-scale ‘one size fits all’ outsourcing or sharing models have been shown to be too complex or inflexible.

Chief executives will be looking to work with specialists who can combine service delivery and ICT expertise and a blend of complementary skill sets to do more, while spending less.

We are seeing councils and housing providers starting to assess demands for services and corresponding system capacity, using business intelligence and analytics experts working flexibly within shared service models as additional resources.

Perhaps the biggest difference private service providers can make, however, as resources are increasingly shared, is to meet councils’ need for oversight and to ensure governance.

Expert suppliers with experience of local government and the wider public sector have the expertise (and ICT know-how) to help councils achieve service performance and enforce service-level agreements.

In a climate where the government is pursuing savings and reforms with an almost-unprecedented speed, and where council chief executives are already swamped by targets and regulatory compliance, the commercial and regulatory nous private providers can bring – and the aspiration to form genuine, long-term partnerships – could make all the difference.

Flexibility is key in this age of austerity

FoREWoRD SUPPlIED By CIVICAwww.civica.co.uk

Pooling resources t

working across the local government sector as well as our partners that provide ICT and related services.

We need to integrate, share resources, including information and intelligence, collaborate and co-operate, if we are to reduce delivery costs while improving the experience for our customers.

Local government needs to recognise and accept that, first, working effectively across and between public and private organisations will require us all to accept some FD

GFDG

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Savings made at Teignbridge can be focused more on community projects such as this ‘litter pick’


Making changes work for you

and controls. Town halls are judged in a way that private organisations answerable to shareholders are not. A council will be embarrassed by a national and local media that is questioning whether we should spend money on technology that looks at first sight ‘icing on the cakeish’ rather than on bin-lorries – no matter what the greater potential longer-term savings are from effective innovation.

It is important that someone takes the lead – and knows when and where to

‘‘ Local government needs to recognise and accept that, first, working effectively across and between public and private organisations will require us all to accept some loss of sovereignty and control

ask for advice. We have to understand that leadership across organisations is not a challenge, but a means to an end. Left to their own devices, the turkeys are never going to vote for Christmas. We have to trust and motivate our public and private sector partners too – recognising where they can help and where we need to pool our expertise.

Meanwhile, our partners in the ICT sector need to recognise and accept that the risk associated with integrating new and shared services has to be managed. The way that existing systems tend to work can reinforce the silos – where knowledge is locked up within and between organisations. We and our partners need to work together more openly and effectively. To make it easy and cheap for us to work better for our customers they, too, need to share their expert knowledge and collaborate.

Our partners have to be flexible. One size does not fit all and partners need fully to understand our objectives and the daily operating constraints on us before

loss of sovereignty and control. It’s about give and take, delivering overall value for money – achieving a balance between those competing choices of cost, quality and productivity. With expectations high and big-ticket savings to deliver, perfect is not realistic and ‘good enough will have to be good enough’.

We must lose our fear of innovation. Often our systems and process are clogged-up with a 1,000 disproportionate regulations

designing and delivering shared systems. Can they be scaled up – or down as local needs change – as happened in the recession?

Our ICT partners also have a credibility issue. Years of over-promise and under-delivery – systems delivered late and over budget (often by the second reserves rather than the first team) – have made senior executives who answer to local communities somewhat cynical.

To achieve mutual objectives, my message to both colleagues and suppliers is the same: l If you can’t help me meet my objectives – don’t bother me.l If we aren’t talking about at least (in our case) a Devon-wide approach – I am not interested.l If you can’t demonstrate to me the customer benefit, the cost reductions and a track record of delivering on time and on budget, then we will not be going anywhere together.

l Nicola Bulbeck is joint chief executive of Teignbridge & Torridge DCs


Chorley and South Ribble BCsA single shared financial information system for councils could soon become a reality if a successful blueprint implemented by Chorley BC and South Ribble BC is extended to other areas.

Since April the two local authorities have shared one system, bought from outsourcing specialist Civica for £86,000, to manage their finances.

Susan Guinness, head of shared financial services at Chorley and South Ribble, says the move has led to significant benefits.

“It’s much more cost effective and there are huge efficiencies to be made. Because you’re only maintaining and developing one system, all systems’ costs are halved,” she explains.

The project is part of a wider drive towards shared financial services between the councils launched in January 2009. So far this has achieved savings of £300,000.

The new system is web-based, enabling anybody to access it without having to buy new IT packages. Its location in a virtual environment also means this can be extended at very little cost.

Ms Guinness says this, coupled with the knowledge the team has gained by carrying out the merger, would make it easy to add on extra local authorities.

“Now we have found

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solutions to obstacles in having two companies on the same system we could easily have more – there are no barriers to this.

“Because it is a web server you can access it easily without having to invest in lots of IT systems to make it compatible.”

The system covers all of the finance departments’ functions and has led to processes becoming streamlined, such as all invoices being processed electronically.

The councils have one shared team that covers accounts and system development but still retain some separate teams. Ms Guinness says these are necessary to enable staff to develop the level of specialist knowledge required to make decisions on spending.

Alongside the cost savings the authorities hope the shared database may also lead to income generation gathered from other

Case studies: two into one wiLL Go

councils wanting to join in.Ms Guinness explains this

could either involve Chorley and South Ribble providing ongoing maintenance and development services or just acting as consultants.

The new system is organised under a shared services agreement between the two authorities and Ms Guinness says they enjoy a positive working relationship. “We all want it to work,” she concludes.l For more details contact: financial.systems@chorley. gov.uk

Eastbourne BCThere’s nothing like a deadline to focus your mind and Henry Branson, head of infrastructure at Eastbourne BC, is more aware of this than most.

Earlier this year Mr Branson and his team moved nine out of the council’s 12 departments on to a single document management system at top speed and will eventually roll it out across every area.

“We moved the first team over before Christmas and from mid-January 2011 until the first week in March there was a new team going live almost every week,” he says.

The new system is part of a wider ‘agile working’ project approved by the council’s cabinet in February 2010 after a break in a 10-year lease provided the opportunity to reduce its office accommodation.

Pooling resources

‘‘ Because you’re only maintaining and developing one system, all systems’ costs are halved Susan Guinness, head of shared financial services, Chorley BC and South Ribble BC

Sharing services has worked at Worcester (above); hot-desks at Eastbourne; and financial services head Susan Guinness

The system, bought from Civica for £300,000, enabled the departments – which include planning, revenues and benefits and housing – to view all their documents electronically and access files remotely.

This has allowed the council to go from a situation where everyone had their own desk to one where 70% are hot-desking and many staff work on the move,

Sharing the back-office workload can help to improve services and make cost savings too, as Amy TAyloR reports


some “small niggling issues” but says that overall the tight deadline was a blessing and it has forced the local authority to face the next decade with a different approach.l For more details contact: [email protected]

Worcester City CouncilFear of losing control is a common feature of arguments against sharing services but Lesley Meagher, finance services manager at Worcester City Council, is a strong believer that in many situations this can be overcome.

She argues that finance shared services could provide a lifeline to cash-strapped local authorities in today’s economic climate but that, despite this, they are often unpopular among officers and council members.

“The worry always is, how can you share a system and still retain your autonomy? There is more that could be done around improving sharing between councils to achieve better value for money,” she points out.

Worcester, which is a district council, has first-hand experience of this. After a £136,000 investment it began sharing Malvern Hills DC’s existing financial information system – Civica Financials – in February.

The arrangement is organised through a service-level agreement, with Malvern providing Worcester

with IT, a hosted financial system and systems support.

Ms Meagher explains that Malvern benefited too, being able to cut costs through economies of scale in a number of areas.

“Malvern had got to the point where they couldn’t go any lower on system support resource but now they have been able to offload some of that capacity on to us and charge us for it. It’s a win-win situation,” she says.

Worcester immediately saved £30,000 when the system went live, having used a managed support service for their previous system.

It now buys this in-house from Malvern at a much cheaper cost. The annual software licence is also lower.

Ms Meagher says efficiency has started to improve with the new system. Tasks, including raising purchase orders and paying bills, are now taking place more quickly.

The key to successful shared services, Ms Meagher says, is enabling each council to retain ultimate control of their information within an agreement.

“It is important that you have sovereignty so if you want to do something different you can.

“Having trust and communication and working together with a shared common goal are also essential,” she adds. l For more details contact: [email protected]

Case studies: two into one wiLL Go

from home and while they are in customers’ houses.

It was the need to vacate the building by a certain date that led to the speed of the implementation. Mr Branson says this was only possible with the high level of support and resources the council and Civica provided for the project.

“Usually companies say we’ll come in and put the system in, we’ll train you and then we’ll go but instead of this Civica stayed with us. If they hadn’t done that we would have failed,” he explains.

In total, the agile working project has cost £2.6m and after paying this back the council expects to save £3m from the changes over the next ten years.

Some of these savings will come from plans to use the system to create a single view of the customer and all of their contact with the council. This will then be accessible to members of the public themselves, reducing their need to phone the council.

Mr Branson admits the pace of the system’s implementation has led to

Pooling resources

‘‘ There is more that could be done around improving sharing between councils to achieve better value for moneylesley meagher, finance services manager, Worcester City Council

Sponsored by Civica, a market leader in specialist systems and business process services that help organisations around the world to transform the way they

work. The company works with over 90% of the UK’s local authorities. The case studies were agreed in partnership with LGC, which independently commissioned and edited the report.


To talk about shared services is very fashionable. Ministers exhort

councils to “share back-office functions”. Councils up and down the land are talking to their neighbours about sharing certain functions.

In a few places even chief executives and management teams are being shared, though what looked like a growing trend has somewhat slowed in recent months.

This is in contrast to the world of outsourcing, another form of sharing: I know of more than nine major contracts that are due to be let in the next year and there is a flurry of activity in the market for smaller, service-specific, contracts.

So sharing is fashionable and much talked-about and outsourcing is on the increase. But do we think that this must be a coming trend that will sweep through local government? Well, up to a point.

True, most councils have always shared some services and many have been involved in outsourcing for decades. True, activity is on the up, but still a majority of services in a majority of authorities are delivered in broadly traditional ways. If sharing is so fashionable and can deliver savings and/or improvements, why is there not a landslide of activity?

Perhaps the answer is organisational culture.

Forging ahead…Genuine shared services need a radical transformation of delivery models, says DAVID CLARK

FOREWORDLLOYD CLARK Director of local government business groupLiberata

In the drive for efficiency, shared services appear to present an ideal solution to balancing budgets and achieving service levels.

But large-scale success stories remain the exception rather than the rule. While cost saving is a key driver, geography, control and local employment are also factors that can’t be ignored. What is needed is a way to combine the economies of scale of shared services with the skills retention and control advantages of local delivery.

Liberata faced this very challenge five years ago. We had more than a dozen processing sites across the country. Each was a silo that

had to have access to sufficient resources to manage peak demand and had to move people around constantly to handle the full scope of work. We had invested in shared services in the north-west but couldn’t justify a wholesale move out of our local sites on cost and skill grounds.

So we approached the problem another way – virtually. We enabled all our people in all sites to connect to all systems. We harmonised the processes, codes and procedures – even though we continued to work on different systems. We segmented work into ‘types’ so that it could be batched together to achieve greater quality and productivity. And we implemented workflow automatically to match the right skill – wherever it was – to the available demand.

Councils can now use this model to connect to each other. We call this the Capacity GRID™. It combines the benefits of insourcing, outsourcing and sharing without the challenges that have so often beset shared services over costs, timescales and staff relocation.

By connecting capacity that already exists, high performance becomes more accessible. Councils can achieve economies of scale, benchmark productivity and service resilience by sharing resources virtually through the Capacity GRID™.

Local authorities can develop the ability (and flexibility) to buy and sell capacity according to demand while retaining complete control over their people and their services. They have a choice – whether to source their capacity locally, virtually or in combination.

To an extent, of course, this model is not earth-shattering. Buying in only what you need, selling what you don’t – that’s basic business common sense. But it is, in our view, a new, exciting alternative for local government and one that has the potential to lower the cost of achieving high performance.

Shared services? You could think virtually

FOREWORD SUPPLIED BY LIBERATA. www.capacitygrid.com

Virtual shared services ▼

Forging ahead…

Sharing and giving up authority and day-to-day decision making does not come very easily to many councils. Often neither the political nor the managerial cultures are very good at letting go and delivering services in new ways.

A true shared service agenda does not begin with the pursuit of specifications and contracts. It begins with each delivery partner spending time and effort gaining a true understanding of the needs and ambitions of the other.

It goes beyond contract and is based on trust and a genuine co-ownership of the outcomes of a service.

For a local authority this is particularly difficult. Councils are political bodies and councillors are, quite rightly, concerned about the service RE

FLEX

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‘‘ We enabled all our people in all sites to connect to all systems. We harmonised the processes, codes and procedures

Forging ahead… Virtual shared services allow councils to pool skills and resources. LGC updates you on this new partnership approach

performance for which they feel ultimately accountable. In some areas the management culture is focused on the quality of service today, with little thought for radical transformation in delivery models.

I believe that many councils need to examine their own cultural stances before they go anywhere near a service partner.

Most shared service arrangements lie along a spectrum which begins with co-production models, where the citizen or user is part of the process of constructing and delivering a service, moves through community ownership and mutual models and ends in the full-blown outsourcing approach.

The thing all of these have in common is that they

require the authority to ‘give up’ control, to understand another point of view and to be prepared to carry the risk that things will go wrong that are outside of their control but are in areas that are their responsibility. Many find this a big ask.

But, done properly, sharing can drive out costs, can deliver innovation and transformation, and make services more responsive, so ways of making it work need to be found.

There are other models. Virtual sharing, for example, allows councils to be part of a network so they can share resources during peaks and troughs of activities.

Other models allow for organisations not to share actual delivery, but to share high-level expertise. Yet in many areas authorities are carrying full services that would be better delivered through a shared agenda.

We in Solace have been struggling with these issues for a while, which is why we have a whole workstream at our Solace Summit in October devoted to transformation and sharing.

During this, we hope to pin down the characteristics that can make an organisation good at sharing and thus cut costs while maintaining or even improving outcomes.

I will let you know if we succeed!

l David Clark is director, Solace Enterprises

What are virtual shared services?They are shared services where the resources and skills, rather than the location, are shared. Local authority teams – wherever they are in the country – can link into a common network rather than having to relocate to a physical shared service centre. How do they work?The first imperative is to harmonise procedures and align types of work. This doesn’t mean, of course, everything has to be the same but it does mean variation is minimised while still providing for local requirements. By grouping people according to their skills and knowledge, work is matched and directed to the right person in the network.

How do they differ from conventional shared services?Conventional shared services normally require significant investment in facilities and systems. They can sometimes be frustrated by governance or incentives issues, and may often require the authority to transfer control to a centralised service operator. Virtual shared services, conversely, avoid this by taking advantage of existing facilities and systems and keeping control firmly in the hands of the council.

If I decide to do this, what will it mean for a. My workers. b. My service delivery?Under a virtual shared services model, councils can actually retain skilled employees who will continue to work in the same environment rather than being uprooted to a remote centre. They also get much broader exposure for their professional skills and the opportunity to

develop faster. Crucially, local services remain delivered by local people who understand their customers’ needs and the unique demographics of the authority and its communities.

Won’t it require up-front investment?No. Virtual services can be built on to an existing infrastructure and take advantage of the authority’s existing systems. This means councils can get started in weeks rather than years, and investments are minimal.

What exactly does sharing capacity mean?Capacity is simply a measure of an authority’s ability to complete work and can be determined by the level, productivity and skills of its resources. In this context ‘sharing capacity’ simply means sharing resources to complete work. What sort of benefits might I see from this model?Virtually connected authorities can immediately improve service resilience. They no longer need to resource to peak demand because they can buy capacity when they need it and sell capacity when they don’t.

This flexibility to exchange or share capacity ensures resources are used in an optimal way; capacity that isn’t being used in one authority will be being used elsewhere.

Productivity and quality improve dramatically – by up to 60%, according to Liberata – and customers receive consistent and reliable services. With improved transparency, councils also have much greater ability to benchmark like-for-like performance.

Q&A: VIRTUAL WORLD

First published in Local Government Chronicle September 2011 LGCplus.com


Bromley LBCLiberata has been providing services around revenues and benefits and encompassing associated customer services, payroll and pensions administration for the Bromley LBC since 2002, with a new seven-year, £42m contract being agreed as recently as October last year.

“It has clearly reduced our costs in terms of those services, somewhere in the region of £750,000 per annum. But what is equally important is that we have been able to maintain high service standards. We have seen improvements in performance around council tax and housing benefit that have led to real income being generated for the council,” explains Pete Turner, finance director at the council.

“We have improved collection and reduced levels of housing benefit paid when it is not eligible for grant funding. Our arrears collection has improved and we have reduced our bad debt provision,” he adds.

“We do not even call it a contract, we call it a partnership. It is not a traditional ‘parent/child’ relationship. It is a partnership that has matured over time, and we work with Liberata at much more of a strategic level now, developing services. It’s about working together and enabling partners to contribute to strategy. That’s critical in a climate of tight

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financial constraints and reducing resources,” he adds.

Such collaborative working – squaring the circle between declining resources and an imperative for maintaining or even improving service delivery – is likely to become even more important in the future, Mr Turner says.

Authorities will need to look at how they share resources and capacity better to manage fluctuating demand, and so deal with peaks and troughs of activity much more effectively.

“Like most authorities we have inflationary pressures to contend with, cost and service pressures, demographic changes and a real reduction in government grants and budget allocations,” Mr Turner says.

“Because the authority is reducing in size, there is an issue of becoming less flexible and adaptable to change if you don’t have key partners you can work with.

“You can no longer afford

Case studies: spreadinG the Load

to resource simply to manage the peaks on an ongoing basis. But the risk in that scenario is you end up with a deteriorating service in peak periods as a result,” he says.

Mr Turner adds that with virtual outsourcing models there is the potential to share capacity, something that can provide wider efficiencies and benefits, and a better utilisation of resources.

“What this potentially means is, even if you are having to work from a smaller base, you can have the benefit of managing your changing resource requirements and, at the same time, keep your key expertise,” Mr Turner says.

“As an authority we will, inevitably, have to focus more on our core activities, so this is about securing value for money for that.”

It would seem that it is no longer possible to be good at everything – there are just not the resources. Instead local authorities are having to focus their efforts on finding the right partners and the right approach.l For more details contact: Pete Turner, [email protected]

North Somerset CouncilNorth Somerset Council’s relationship with Liberata goes back to 1995 and in many respects, illustrates the evolution there has been in the relationship between many local authorities and private sector providers,

Virtual shared services

‘‘ We do not even call it a contract, we call it a partnership … one that has developed and matured over time Pete Turner, finance director, Bromley LBC

Many local authority contact centres are being outsourced with success

refl

exst

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Stretched local authorities are looking beyond traditional contracts and benefiting from new types of partnership. NiC PaToN reports


tap’ access to specialists.“It is about having the

ability to spread unexpected demand pressures quickly across a network, therefore minimising the impact on customers, without the need for either recruitment or procurement, both of which take time,” he explains.

“In terms of service resilience, it allows us to put operational elements into larger units. For example, the council operated a local scanning and indexing service for many years that always proved a bottleneck when post volumes spiked or when resources were absent because of sicknesses or leave. By accessing a networked bureau service these risks were managed away,” he adds.

Being able to access resources through the network on a temporary or ad hoc basis provides flexibility while, similarly, being able to access specialists ‘on tap’ has been a ‘critical mass’ issue for the council, he stresses.

“Where teams are reducing in size and cannot maintain expensive in-house specialists, being able to access well-resourced specialist teams that service a number of councils has proved invaluable in areas where the council requires expertise to manage financial risks,” he explains.

“It allows us to do things we could not do ourselves, or could not do at pace. It is about bringing in ideas,

flexibility and capacity to help avoid crude cuts and mitigate this with smarter solutions. For example, it has given us access to a small army of project managers in years one and two but who we may be less likely to need after that,” he adds.

More widely, North Somerset, like many councils, is reducing in size, in the case of many services by about 30-40% in the next few years.

For many small- or medium-sized unitaries a reduction in size means their ability to run services themselves diminishes. With a partner the resulting impact on services can to some degree be mitigated. Spreading demand pressures against a partner’s network has also proved invaluable.

“We, for example, saw benefits’ caseloads rise by a significant amount in 2009. Without this partnership we’d have gone straight into long-term backlog but by the second quarter we were out the other side. Previously we would have had to invest in agency resources and overtime. Now by sharing capacity we were able to spread the pressure across the network,” says Mr Penska.

“To us, using a private sector provider is no longer a matter of preference; it is something you have to consider,” he adds.● For more details contact: Richard Penska, [email protected]

CASE STUDIES: SPREADING THE LOAD

explains Richard Penska, assistant director of finance and resources at the council.

“It used to be a discrete transactional service but it has changed into something much more strategic as the authority’s ambitions and pressures have grown. From just providing revenues and benefits, and something pretty much born out of the old competitive tendering regime, it has evolved into a genuine partnership,” he says.

The Liberata contract was

renewed in 2002 and then in October last year repackaged into a 10-year, £85m strategic partnership that now covers areas including revenues, benefits, finance, human resources and payroll and facilities management, as well as contact centre activities.

Within this, being able to access and deliver services through a virtual shared services model has provided four key benefits, argues Mr Penska: performance, service resilience, flexibility and ‘on

Virtual shared services

‘‘ It allows us to do things we could not do ourselves, or could not do at pace. It’s about bringing in ideas, fl exibility and capacity to help avoid crude cutsRichard Penska, assistant director, finance and resources, North Somerset Council

Sponsored by Liberata. The case study subjects were agreed in partnership with LGC, which independently commissioned and edited the report. Liberata is one of the UK public sector’s leading specialist providers of business process services. The Capacity GRID™ is the award-winning next generation approach to

high-performance virtual shared services.

Open Services

Open Services

www.capacitygrid.com

www.civica.co.uk

www.ey.com/uk/localgovernment

www.ibm.com/easyaccess/publicsector

To view this supplement online or see other LGC supplements, visit LGCplus.com/Supplements

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