Sharing services has risen up the agendas of the Uk's national and local governments in recent years, propelled by political and financial trends as well as by more concrete factors such as Sir Peter Gershon's 2004-5 Efficiency impart and Sir David Varney's record on transformational government. In an exertion to throw some light on recent developments and to examine where shared services may be headed in future, Sson convened a roundtable consider moving a group of practitioners and advisors at local and national level, chaired by Sson's online editor Jamie Liddell. The results were, indeed, illuminating...
Attending were:
Gauge Absolute Pressure
Tony Isaacs
Programme Manager
Warwickshire Direct Partnership
The Warwickshire Direct Partnership is a shared services programme comprising all six local authorities in the county of Warwickshire: North Warwickshire Borough Council; Nuneaton & Bedworth Borough Council; Rugby Borough Council; Stratford District Council; Warwick District Council; Warwickshire County Council; and three private-sector partners in Steria, MacFarlane Telesystems and Northgate facts Systems.
Dominic Swift
Head of Shared Services
Browne Jacobson
Browne Jacobson is one of the largest law firms in the Midlands with offices in Nottingham, Birmingham and London. The firm acts for over 100 local authorities, whether directly or through their insurers. It recently published its Shared Services examine '08, one of the most thorough surveys ever carried out into shared services in the Uk.
Peter Telford
Chief administrative Officer
Research Councils Uk Shared Services Centre
Research Councils Uk (Rcuk) is a strategic partnership between the seven Uk research Councils. Rcuk was established in 2002 to enable the Councils to work together more effectively to enhance the thorough impact and effectiveness of their research, training and innovation activities, contributing to the delivery of the Government's objectives for science and innovation.
Ray Tomkinson
Local Government improvement devotee and Shared Services Author
Ray Tomkinson is the author of Shared Services in Local Government: improving aid Delivery (Gower, 2007). Ray managed the Welland Partnership shared services scheme and currently operates as a consultant.
Sson: Peter, you're at the head of one of the more leading national shared services centres [Sscs]. Can you expound a itsybitsy about the drivers behind the move in your organisation?
Peter Telford: Behind the research Council's company case are benefits focusing on what are seen as financial gains which will be passed back to research and the research community, but probably more importantly in the early stages is the feeling that we can fetch good effectiveness in company preserve to that research society by aggregating the seven research Councils' services onto one coarse platform, and transforming them. The company case started with an shape about two years ago. There was a lot of work done on confident parts of the shared aid model even before that, but the activity's unmistakably come together in the last two years. The full company case was accepted by the research Councils in line with Csr07 [Comprehensive Spending impart 2007] in August last year, and the intention at the occasion is that we will go live on the platform at the starting of next year. We already have some services live in the It and strategic sourcing areas.
Sson: Tony, your project's been going for rather longer than that. Would you say that the drivers behind the Warwickshire Direct Partnership are similar?
Tony Isaacs: I think ours were slightly dissimilar in that when we started off in 2002/3 the driver behind that was, basically, to capitalise on the money that was ready from central government at the time. We made a bid as the Warwickshire Online Partnership, and set up that single group specifically to bid for that money: a total of £2m. We identified a estimate of dissimilar projects that we would exertion to fetch and implement with that money, not least of which was the joint procurement by all six authorities in Warwickshire of a Crm [citizen-relationship management] theory and associated telephony systems. We got the full £2m and since then we have unmistakably implemented it; we jointly went to procurement and we've ended up with the Northgate front office Crm system.
Now I don't think the goalposts have changed, but the drivers have. I think the drivers have changed in that there is no money ready now; it's exactly the opposite insofar as before there was money splashing about, if you will, from central government, and now it's the opposite insofar as with Csr07, with all the efficiencies and demands that there are on local authorities to save, there is an overriding need to make things more efficient and more efficient, and shared services is seen as being one key formula of doing that - with the consequence that we are in a position now where our chief executives, our leaders, are very keen in finding at what can be done. And based upon that - or nearby all this - is the whole area of the two-tier structure within Warwickshire, and the drive that the government may want to push - and seems to be pushing - with regards to unitaries. But Warwickshire is very clear that it wants to preserve its two-tier organisational structure and will do so by sharing services.
Dominic Swift: Tony, I just want to ensue something through on that, because it's a theme that emerged when we did our research on shared services [Browne Jacobson's Shared Services examine '08] that unmistakably efficiency savings and improvements in the way services are delivered are key drivers, but what you've identified as a lack of money was one of the real inhibitors, because in order to deliver shared services there is a considerable cost: You've already mentioned telephony which was obviously put in as part of the grant, and one of the problems that habitancy seemed to face was the immediate growth in costs to deliver a shared services stream before any efficiency savings could unmistakably be delivered.
Tony Isaacs: You're unmistakably right insofar as there's a need to spend in order to deliver efficiencies, and what we're seeking to do is to build up good, strong, distinguished company cases that maybe finding over a five-year spread, so that while there is a recognition that to begin with you may need to spend money, over the period following that it's staggering that there will be savings. And Warwickshire may be different, but we don't necessarily regard it just as pounds saved: it could be efficiencies. So it's non-financial benefits as well as financial ones.
Sson: Ray, do you see many differences between the drivers for local and national shared services?
Ray Tomkinson: Yes I think there's one big difference, which is the issue of government compulsion, as it were. There's no doubt about it: central government departments recognise that they unmistakably don't have much alternative at the occasion to creating some element of shared services - because the Treasury makes sure that they do, because the Treasury controls the purse strings. It's less clear that in local government every council is going to have to go down the shared services road.
As was being made abundantly clear a itsybitsy or two ago, local authorities have dissimilar ways of approaching their financial restrictions or their political considerations, one of which is the unitary program - or the two-tier program in other councils. So some councils are going to have to go down the shared services route because it's the only way organisationally that they're going to function. Other councils don't have that imperative at the occasion and I'm working with one group of four councils which are finding at sharing services but not because of financial pressures. They're finding at it because they want to make aid improvements, to enhance resilience of services, and also give opportunities to generate new services. So it's a very dissimilar program between the two.
Sson: Peter, from a national perspective are you finding an increased pressure from government to implement?
Peter Telford: Yes. Historically I've been in shared services in the secret sector, local authority and now central government so I suppose I can unmistakably empathise with the former comments. I think the obligation from central government is largely fiscal although there is a feeling that the transformational program that sits behind it is also very prominent. I think the other inequity in central government is it is easier to recognize and reach a considerable mass where you can unmistakably ensue a transformation and deliver efficiency and effectiveness. At the local government level, it is more difficult to generate considerable mass - which then makes the funding routes and the benefits probably more difficult to determine in the early stages.
Sson: Ok. There's been a lot of talk about what advantages other than cost savings can be delivered through shared services. And this brings us on to the issue of benchmarking. When it comes to savings you can obviously benchmark against what you're recovery and how much you've saved against former budgets, for example. But when it comes to service-delivery, how can one form exactly what you're benchmarking, and against what and against whom? Is there a coarse thread here in terms of where you go for benchmarking?
Dominic Swift: I think benchmarking's so different, for dissimilar projects, is the long and the short of it. What we've seen through our research is that there's a very wide range of dissimilar projects - we've already talked about the drivers, and it unmistakably depends on what you want out of your project. One of the frustrations that we heard at the national launches that we did of our review, was that there wasn't adequate benchmarking of the actual outcomes. And a lot of habitancy said to me "how do we judge whether this has been a success?"
One of the problems is that if you produce a much more efficient service, which is more moving to the general group (if it is a front-facing service, which more and more are) is that it will unmistakably be used more. And as a ensue you're getting good value, in terms of hits, but the cost of the aid may unmistakably go up. So it is quite a complex job to benchmark and I think it requires some very clear outputs to be identified at the outset, and to look for comparable projects.
Sson: Tony, you've got a wide variety of services you need to benchmark...
Tony Isaacs: Yes, that's right. I can couple unmistakably nearby the Crm system, because all the facts we've got is via customer services, and improvements we've made to that nearby the Crm system. What we've done is take benchmarking as a very serious exercise in its own right, and what we've sought to do is to get customer comprehension by using dissimilar databases, facts from the Crm, facts from MacFarlane - the telephony theory - and pool all that facts among all the partners. And what we've done then is to say "ok, couple on the areas that we want to couple on" and to make sure that we do enhance the services that we are seeking to improve. We have got what we call an improvement Forum, which is a relatively recent creation and which is proving to be very thriving as well. And that's finding at the way in which the Crm in single can add value to the whole process of improving customer services.
We are concentrating as well on a variety of dissimilar entrance channels, so we've got the Crm system, we've got telephone taste obviously, face-to-face via our one-stop-shops - we've got eight of them at the moment, with other eight planned for next year. We've got kiosks as well. But also I think most significantly, in the next few months or so what we're finding to do is drive ourselves transmit with web self-serve, and look to try to move habitancy more towards that means of accessing services. And I think that will be a double win because the customer will advantage greatly from that in terms of speed of service, but also we will, because we'll drive down the unit costs, and that quite clearly is a key formula of manufacture savings.
Sson: In the secret sector a great deal of benchmarking goes on between private fellowships and organisations, and as a ensue you have the idea of world-class et cetera. Is it a pipedream to advise you might be able to get similar systems set up in the group sector, in which every region and every locality has its own pressures?
Peter Telford: I don't think it is and I think the advantage of the group sector is, by and large we're not competing with each other, and therefore habitancy are much more willing to share facts and the assumptions that sit under that facts to try to help each other along. And I'm quite heartened by that kind of culture. I think the mystery with the secret sector is that it's commonly wrapped in commercial connotations and costings as well, which makes it very difficult to unpick to ensure you are comparing like with like. Albeit that said, the inequity is that there is much more evidence when you can find it and it's much more prescriptive in terms of aid levels than I would advise you would find in the group sector.
Dominic Swift: I'm very interested to see whether there can be some sort of worldwide benching or benchmarking which unmistakably does define the success of projects. I'd be very interested in comprehension more of what Tony's doing and how the estimation takes place, capture of facts and then the dissemination of that, to unmistakably judge how that aid is being delivered and where the successes are - and where maybe the challenges are. And also what sort of services you're comparing that with. Because as I see it, shared services range across such a vast array of the dissimilar group sector areas - we were talking earlier on about this being local authorities but clearly it goes to condition and other group sector bodies as well - and from that point of view the real problem you'll have it seems to me is comparing apples with apples.
Tony Isaacs: I can give you a fairly high-level record of what we're doing, and that is that we're using some software you may be customary with - Mosaic Data - and we've populated a lot of databases agreeing to the facts that we've gleaned from there, and that's proving to be very much the benchmarking process that we're going to go through. And there are confident authorities out of the partnership that are leading on this.
For each of the projects that we have, we have lead authorities who volunteer to lead on single projects. We've got Nuneaton for example to lead on one, as well as the county, and the county has facts that it uses from its observatory, and there's a pooling of information, and there's an trade via the improvement Forum for example whereby they do couple on exact areas with the data they've accumulated - whether it's county-wide or just private authority-wide. But basically they work together as best they can to supply these benchmarking criteria. It's not a quick process by any means. But over time we build up that data and then we can use it from year to year to do comparisons to see how things are improving.
In expanding to that I don't know if you're customary with Ni14, the latest government key indicator which has just come out, which is to do with avoidable taste with clients - customers - with local authorities. And we'll be using the Crm to glean quite a lot of facts via the Crm system. But it is a corporate-wide key indicator, so you will have other services, other departments, feeding in this facts as well. That facts is supposed to be started in October of this year and it will be used year-on-year to gauge how we're doing, in terms of avoiding avoidable contact, and finding to enhance that.
Peter Telford: I think it's fair to say whilst we have not yet built the longevity of data that Tony describes - and I unmistakably agree with him that construction a profile and a trajectory is invaluable as a benchmark - we haven't unmistakably got to the point yet where we are able to benchmark our aid delivery over a period of time; what we are doing is assessing our operation as we change services. We've got a baseline against some services from the research Councils and from my own taste and from talking with others in the group sector we will then composition what we believe will be accepted targets for the research Councils against their baseline. But I'm with Dominic: initially it is very difficult to assess apples with apples and ensure you've got a representative benchmark.
Dominic Swift: Peter, it's very moving from my point of view. I quite agree with you about the "apples with apples" thing. I think what's been said about the group sector is very true: it's much more transparent, there's much more desire to learn from each other. One of the things I'm doing tomorrow unmistakably is go down to sit in in Kettering where they've been running a shared services scheme for many years - well, well before Gershon and Varney and the rest. And that's very moving because habitancy are open about what's happening in shared services and happy to learn from each other. The mystery seems to be that they range over such a wide area, the danger is that unless habitancy come to some coarse terminology about what outputs are going to be defined for single services it may be potential to benchmark over time as Tony's doing, but unmistakably benchmarking across dissimilar projects will be very difficult.
Ray Tomkinson: I think that's very valid. One of the issues is that there is no commonality across authorities as to what constitutes a service. So what you tend to find is that habitancy dive for a process - and even when they dive for a process it doesn't tell you an awful lot about the aid that you're trying to share. And there's often a real mystery in stopping trying to find the trees when you're trying to fight your way through the forest. So from that point of view I think benchmarking has on opening got a very bad name because habitancy use it as an excuse for not doing anything; and it's only in the past couple of years where I think habitancy have been much more ready to be open about the fact they need to consider sharing as an choice and sometimes benchmarking isn't used as a blockage.
Sson: Let's move on from benchmarking. We were talking a itsybitsy about the secret sector a itsybitsy ago - are we of the idea that the secret sector is an absolute necessity within Uk group sector shared services, and to what extent is it a foregone closing that this is going to ensue in a degree of privatisation of services?
Dominic Swift: This is a demand we asked in our survey: the sort of view that we had was that of procedure the secret sector is an leading potential partner in shared services, but there were just as many opportunities for the group sector to work together without the secret sector. So, yes, it's part of the photograph but it unmistakably isn't necessarily the whole of it. And I don't think that privatisation is an inevitability from shared services: where we saw the secret sector coming in, and the examine unmistakably highlighted this, links back to the funding issues we discussed earlier on.
Where you needed some sort of It installation and commonality across a estimate of authorities and participants, quite often the secret sector partner was someone who could deliver that in order to comfort some of the first cost difficulties of setting up a shared aid which frankly couldn't be borne by some of the participating authorities.
Sson: Tony, that's unmistakably what you were saying about the first start-up of Warwickshire, isn't it?
Tony Isaacs: Yes certainly: and it's ongoing because we've just finished the renovation of the Crm covenant and the telephony contract, so from the starting of next year we will unmistakably be embarking on new five-year contracts replacing the existing ones. And that's the position of the Crm, the telephony, the Ict systems nearby it - so yes, it's confident that we have to go down that route. We've had good - very good - negotiations with the secret sector on this and I'd like to think that all of us have come to a very good, fair new contract.
Ray Tomkinson: I think unmistakably the point that was made about investment is a very good one. There is unmistakably no calculate why local authorities can't do sharing on their own without the secret sector, and there are lots of examples nearby now where groups of councils are trying to do public-public partnerships. But I do agree: where there is a real need for investment - particularly nearby It - then that's where the problems start for local authorities, and that's why they often do resort to the secret sector.
But I do think that it's worthwhile pointing out that as much as there are needs for investment, particularly in It, there are lots of services which do not need that investment, and I'm thinking of pro services like planning, or construction controls are other good example, or environmental condition is other good example, where plainly you're dealing with people. One of the problems though that local authorities do find in that area is the scarcity of pro planners, environmental condition officers, construction operate officers. And often they have to partner with the secret sector plainly for that reason.
Peter Telford: We need to get back to the point that I think Dominic made earlier which is in analysing what you're trying to achieve with your Ssc you then start to look at how you're going to do it. And how you're going to do it may or may not consist of the secret sector. If you do seek investment from the secret sector, they will seek a return on that investment; you just have to recognise that. They may unmistakably want a behalf which may erode the efficiency savings you seek to make.
I think other thing that the secret sector brings is taste and expertise in the sorts of convert and benchmarking data which you may need. That said, I think the blend of group and secret sector in trying to get to a shared aid centre is the right one and the change of risk to the secret sector through doing this is always pretty key in terms of what you want to get out against your project.
Tony Isaacs: I was just going to pick up on the point that if you can go for joint procurement as opposed to private authority procurement, you can unmistakably reap the benefits, and the bottom line will be that you do make considerable savings - not so much a behalf will result, but it will produce efficiencies in savings. We found that with our negotiations latterly with Northgate and MacFarlane, and also more significantly while the procedure of the covenant that we've just had, when we as a partnership stuck together and wanted to get private things out of Northgate, and/or MacFarlane, by standing firm we could unmistakably apply the screws to them, and they were forthcoming; so we could unmistakably achieve quite considerable savings on dissimilar aspects of procurement that we did while the procedure of the four years we've had the system.
In terms of profit, I'm not sure whether profit's the right word as I just mentioned; what we're finding for are savings and efficiencies and I select to use those terms rather than profit. In essence we can expound what we're doing now: adding value, manufacture sure we are getting the market rate or better, and we can quite happily and justifiably tell our chief officers and members based on the company cases that we've produced that we are getting best value, we are manufacture savings and efficiencies on the basis of this joint procurement exercise.
Sson: moving on: the hereafter form and structure of shared services in the Uk is, it appears, going to be carefully in large part by competition between authorities, in a lot of areas. How do you see local shared services existing in the Uk in, say, two or three governments' time?
Ray Tomkinson: Two or three governments' time, that's interesting. So that'll be two Conservative and one Labour... I suppose my thinking goes like this: I think that in 15 to 20 years' time you will see a patchwork quilt across - unmistakably the local government sector; I'm not quite so sure about the central government sector. And what I mean by that is you will have a group of statutory authorities that are all geographically based - whether that's a county or a district - there will be differences across the country.
Secondly they will have dissimilar types of shared services in dissimilar areas. There will be some that will be public-public; some that will be public-private; and some that will be public-public in terms of dissimilar sectors: condition will have joined in; the police will have joined in. Because the pressures of the Caa regime coming from the Audit Commission mean that all group sector organisations in geographical areas have got to think whether it's good to work together than to work separately. And as a ensue of that I think you'll get a unmistakably dissimilar appreciation across, and in some areas there will be very heavy secret involvement and in other areas probably none.
Dominic Swift: Basically I think it'll depend a itsybitsy bit on the nature of the shared service, to be honest. Sorry - I keep coming back to that point really. It struck us while the procedure of the work we did that there are two dissimilar forms of shared service: the ones which maybe have been more prevalent to date, which have been the sort of back-office, It function - Ict-reliant functions - and then the front-office function. Now they have very dissimilar possibilities in terms of partners. If you look at the front office it is a locally-delivered aid and therefore your partners are chosen by geography, and geography alone: they can't be chosen by much else, other than if you go to some sort of call-centre arrangement. But the other services can unmistakably be amalgamated a lot more and with less sensitivity to geography.
So I think there are going to be some quite dissimilar groupings and maybe some legal authorities who particularly drive the delivery of a good aid who maybe sell to a very wide range of local authorities: health, via police, all of these are potential customers for them. And then on the local basis it's going to be a lot more down to politics and the dynamics between the politicians as to how well their shared services are going to be run, and I think some of the political difficulties we have in Nottinghamshire, where I'm based, may make it quite moving to get some of those local shared services off the ground.
Sson: Tony, I know this is something you've been thinking about, and obviously as quite a thriving aid provider it must be on the agenda. So let's put you on the spot: do you think you will be at the forefront of a thriving selling of services in the next couple of years?
Tony Isaacs: Yes I think I do in the next couple of years, but if you're talking longer-term than that I think - and I compel to add that this is my own personal view - the likelihood is that there will be an growth in unitaries. And there could well be in Warwickshire as well. I can put transmit a very rosy photograph in some ways - but at the same time you've got nagging at the back of your mind all the time the mystery that there is in unmistakably creating thriving shared services - and I think that's from a political point of view as well as the simple business-case point of view.
I think there will be more and more unitary authorities, to be honest. And I wouldn't be surprised if even Warwickshire at last ended up with two unitary authorities rather than the six authorities we've got now. I think it's approximately inevitable, and I think the government will continue to apply the screws, demand more and more savings year upon year, and the consequences will be that it'll approximately be confident that there will be more.
Peter Telford: I think this is too early in our amelioration path to consider and I think construction a stable aid with reference-ability is key before we could go there. The wider central government program is pretty clear in terms of convergence of exertion and performance onto some of the core shared services in the bigger departments. That's already starting to come because of the requirements laid down by the Cabinet Office. And you can see the program already moving to: how do you ensure that there's a commonality of explication and trade on aid levels that are given to customers? How do you allocate customer advantage across a broader-based shared service? How do you prioritise how you would offer services to customers? Those are debates which I think are becoming more prevalent and therefore indicative of activities and departments coming together on shared aid platforms.
Sson Roundtable moot - Uk social Sector Shared Services - Where Now and Where Next?