Sharing services has risen up the agendas of the Uk's national and local governments in up-to-date years, propelled by political and financial trends as well as by more concrete factors such as Sir Peter Gershon's 2004-5 Efficiency recapitulate and Sir David Varney's narrative on transformational government. In an effort to throw some light on up-to-date developments and to observe where shared services may be headed in future, Sson convened a roundtable debate spicy 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:
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 observe '08, one of the most unabridged 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 unabridged 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 scholar 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 project and currently operates as a consultant.
Sson: Peter, you're at the head of one of the more prominent national shared services centres [Sscs]. Can you account for a diminutive about the drivers behind the move in your organisation?
Peter Telford: Behind the research Council's enterprise 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 derive good effectiveness in enterprise preserve to that research community by aggregating the seven research Councils' services onto one tasteless platform, and transforming them. The enterprise case started with an outline about two years ago. There was a lot of work done on obvious parts of the shared aid model even before that, but the activity's well come together in the last two years. The full enterprise case was standard by the research Councils in line with Csr07 [Comprehensive Spending recapitulate 2007] in August last year, and the intention at the occasion is that we will go live on the platform at the beginning 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 distinct in that when we started off in 2002/3 the driver behind that was, basically, to capitalise on the money that was available 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 distinct projects that we would effort to derive 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 related telephony systems. We got the full £2m and since then we have well 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 available 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 productive and more efficient, and shared services is seen as being one key method 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 buildings 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 buildings and will do so by sharing services.
Dominic Swift: Tony, I just want to result something through on that, because it's a theme that emerged when we did our research on shared services [Browne Jacobson's Shared Services observe '08] that well 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 population seemed to face was the immediate growth in costs to deliver a shared services stream before any efficiency savings could well be delivered.
Tony Isaacs: You're well 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, excellent enterprise 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 anticipated 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 well 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 diminutive or two ago, local authorities have distinct ways of approaching their financial restrictions or their political considerations, one of which is the unitary agenda - or the two-tier agenda 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 distinct agenda 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 incommunicable sector, local authority and now central government so I suppose I can well empathise with the previous comments. I think the compulsion from central government is largely fiscal although there is a feeling that the transformational agenda that sits behind it is also very prominent. I think the other distinction in central government is it is easier to identify and reach a considerable mass where you can well result 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 settle 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 salvage and how much you've saved against previous 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 tasteless thread here in terms of where you go for benchmarking?
Dominic Swift: I think benchmarking's so different, for distinct 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 distinct projects - we've already talked about the drivers, and it well 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 enough benchmarking of the actual outcomes. And a lot of population said to me "how do we judge whether this has been a success?"
One of the problems is that if you furnish a much more productive service, which is more spicy to the general communal (if it is a front-facing service, which more and more are) is that it will well be used more. And as a result you're getting good value, in terms of hits, but the cost of the aid may well 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 consolidate well 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 distinct 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, consolidate on the areas that we want to consolidate 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 up-to-date 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 distinct access channels, so we've got the Crm system, we've got telephone feel obviously, face-to-face via our one-stop-shops - we've got eight of them at the moment, with someone else 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 forward with web self-serve, and look to try to move population more towards that means of accessing services. And I think that will be a duplicate win because the customer will benefit 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 method of making savings.
Sson: In the incommunicable sector a great deal of benchmarking goes on between private companies and organisations, and as a result 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 communal sector, in which every region and every locality has its own pressures?
Peter Telford: I don't think it is and I think the benefit of the communal sector is, by and large we're not competitive with each other, and therefore population 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 strangeness with the incommunicable sector is that it's normally wrapped in market connotations and costings as well, which makes it very difficult to unpick to ensure you are comparing like with like. Albeit that said, the distinction 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 communal sector.
Dominic Swift: I'm very concerned to see whether there can be some sort of worldwide benching or benchmarking which well does define the success of projects. I'd be very concerned in comprehension more of what Tony's doing and how the determination takes place, capture of facts and then the dissemination of that, to well judge how that aid is being delivered and where the successes are - and where perhaps the challenges are. And also what sort of services you're comparing that with. Because as I see it, shared services range over such a vast array of the distinct communal sector areas - we were talking earlier on about this being local authorities but clearly it goes to health and other communal sector bodies as well - and from that point of view the real qoute you'll have it seems to me is comparing apples with apples.
Tony Isaacs: I can give you a fairly high-level narrative 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 obvious authorities out of the partnership that are prominent 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 deal via the improvement Forum for example whereby they do consolidate 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 contribute 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 addition to that I don't know if you're customary with Ni14, the newest government key indicator which has just come out, which is to do with avoidable feel 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 well agree with him that construction a profile and a trajectory is invaluable as a benchmark - we haven't well 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 carrying out as we transfer services. We've got a baseline against some services from the research Councils and from my own feel and from talking with others in the communal sector we will then blend what we believe will be standard targets for the research Councils against their baseline. But I'm with Dominic: initially it is very difficult to correlate apples with apples and ensure you've got a representative benchmark.
Dominic Swift: Peter, it's very spicy from my point of view. I quite agree with you about the "apples with apples" thing. I think what's been said about the communal 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 well is go down to sit in in Kettering where they've been running a shared services project for many years - well, well before Gershon and Varney and the rest. And that's very spicy because population are open about what's happening in shared services and happy to learn from each other. The strangeness seems to be that they range over such a wide area, the danger is that unless population come to some tasteless terminology about what outputs are going to be defined for single services it may be possible to benchmark over time as Tony's doing, but well benchmarking over distinct projects will be very difficult.
Ray Tomkinson: I think that's very valid. One of the issues is that there is no commonality over authorities as to what constitutes a service. So what you tend to find is that population 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 strangeness 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 population use it as an excuse for not doing anything; and it's only in the past consolidate of years where I think population have been much more ready to be open about the fact they need to reconsider sharing as an choice and sometimes benchmarking isn't used as a blockage.
Sson: Let's move on from benchmarking. We were talking a diminutive about the incommunicable sector a diminutive ago - are we of the idea that the incommunicable sector is an absolute necessity within Uk communal sector shared services, and to what extent is it a foregone end that this is going to result in a degree of privatisation of services?
Dominic Swift: This is a query we asked in our survey: the sort of view that we had was that of policy the incommunicable sector is an prominent possible partner in shared services, but there were just as many opportunities for the communal sector to work together without the incommunicable sector. So, yes, it's part of the photo but it well isn't necessarily the whole of it. And I don't think that privatisation is an inevitability from shared services: where we saw the incommunicable sector advent in, and the observe well highlighted this, links back to the funding issues we discussed earlier on.
Where you needed some sort of It factory and commonality over a estimate of authorities and participants, quite often the incommunicable sector partner was person who could deliver that in order to relax some of the preliminary cost difficulties of setting up a shared aid which frankly couldn't be borne by some of the participating authorities.
Sson: Tony, that's well what you were saying about the preliminary start-up of Warwickshire, isn't it?
Tony Isaacs: Yes certainly: and it's ongoing because we've just accomplished the renewal of the Crm ageement and the telephony contract, so from the beginning of next year we will well 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 obvious that we have to go down that route. We've had good - very good - negotiations with the incommunicable 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 well the point that was made about investment is a very good one. There is well no calculate why local authorities can't do sharing on their own without the incommunicable 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 incommunicable 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 reasoning of professional services like planning, or construction controls are someone else good example, or environmental health is someone else good example, where simply you're dealing with people. One of the problems though that local authorities do find in that area is the scarcity of professional planners, environmental health officers, construction operate officers. And often they have to partner with the incommunicable sector simply 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 perform 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 contain the incommunicable sector. If you do seek investment from the incommunicable sector, they will seek a return on that investment; you just have to recognise that. They may well want a profit which may erode the efficiency savings you seek to make.
I think someone else thing that the incommunicable sector brings is feel and expertise in the sorts of turn and benchmarking data which you may need. That said, I think the blend of communal and incommunicable sector in trying to get to a shared aid centre is the right one and the transfer of risk to the incommunicable 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 well reap the benefits, and the lowest line will be that you do make considerable savings - not so much a profit will result, but it will furnish efficiencies in savings. We found that with our negotiations latterly with Northgate and MacFarlane, and also more significantly during the policy of the ageement 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 well apply the screws to them, and they were forthcoming; so we could well perform quite considerable savings on distinct aspects of procurement that we did during the policy 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 pick to use those terms rather than profit. In essence we can account for what we're doing now: adding value, making sure we are getting the store rate or better, and we can quite happily and justifiably tell our chief officers and members based on the enterprise cases that we've produced that we are getting best value, we are making savings and efficiencies on the basis of this joint procurement exercise.
Sson: spicy on: the hereafter form and buildings 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 reasoning goes like this: I think that in 15 to 20 years' time you will see a patchwork quilt over - well 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 over the country.
Secondly they will have distinct types of shared services in distinct 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 distinct sectors: health will have joined in; the police will have joined in. Because the pressures of the Caa regime advent from the Audit Commission mean that all communal sector organisations in geographical areas have got to think whether it's good to work together than to work separately. And as a result of that I think you'll get a well distinct appreciation across, and in some areas there will be very heavy incommunicable involvement and in other areas probably none.
Dominic Swift: Basically I think it'll depend a diminutive bit on the nature of the shared service, to be honest. Sorry - I keep advent back to that point really. It struck us during the policy of the work we did that there are two distinct forms of shared service: the ones which perhaps 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 distinct 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 well be amalgamated a lot more and with less sensitivity to geography.
So I think there are going to be some quite distinct groupings and perhaps some legal authorities who particularly drive the delivery of a good aid who perhaps sell to a very wide range of local authorities: health, via police, all of these are possible 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 spicy to get some of those local shared services off the ground.
Sson: Tony, I know this is something you've been reasoning 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 consolidate of years?
Tony Isaacs: Yes I think I do in the next consolidate 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 forward a very rosy photo in some ways - but at the same time you've got nagging at the back of your mind all the time the strangeness that there is in well creating thriving shared services - and I think that's from a political point of view as well as the uncomplicated 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 ultimately ended up with two unitary authorities rather than the six authorities we've got now. I think it's roughly inevitable, and I think the government will continue to apply the screws, query more and more savings year upon year, and the consequences will be that it'll roughly be obvious that there will be more.
Peter Telford: I think this is too early in our improvement path to reconsider and I think construction a carport aid with reference-ability is key before we could go there. The wider central government agenda is pretty clear in terms of convergence of effort and action onto some of the core shared services in the bigger departments. That's already beginning to come because of the requirements laid down by the Cabinet Office. And you can see the agenda already spicy to: how do you ensure that there's a commonality of clarification and deal on aid levels that are given to customers? How do you allocate customer benefit over 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 advent together on shared aid platforms.
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