IfG.CC -
Institute for eGovernment

The boroughs of Havering and Newham will be sharing support services such as HR, ICT, finance, benefits, council tax and business rates after the proposal was passed by the boroughs’ respective cabinets.

The research was conducted by consultancy Lowendalmasaï who analysed the spending figures of 29 London councils over an eight month period. It found that the 29 councils spent more than £8.2bn and had more than 53,000 suppliers, with the top 15 suppliers being paid around £747m for their services with more than 20 of the councils.

The City of Westminster, Hammersmith & Fulham and Kensington & Chelsea will develop the service over a four year period.

The framework was announced through an online tender, seeking suppliers to provide a service desk, designed to enhance the use of data centre services, including computing and infrastructure services.

The London Borough of Southwark has teamed up with Westminster City Council to share communications services in a bid to reduce costs and improve service delivery for local residents.

Policy and public affairs will also be shared through the project, which could in time evolve to become a social enterprise model, LocalGov reports.

Two NHS organisations in North London have signed contracts with 2e2 for its managed ICT services.

In a series of contracts worth £4 million, Haringey Community Services and NHS North Central London Cluster will join Camden Primary Care Trust (PCT), Islington PCT and Camden and Islington NHS Foundation Trust on an existing managed IT services deal in the area.

David Thomas, deputy director of IT for the NHS North Central London Cluster, said that the contract with 2e2 has helped it save around 25 percent in costs, compared with the previous in-house IT service.

Islington Council has backed a proposal for a shared ICT service with Camden Council, which aims to save the councils a combined £4m a year once fully operational.

Both councils are under pressure to reduce their expenditure, and have estimated that they will need to deliver a combined savings total of £185m by 2018/19. The shared ICT service is an attempt at making some of those savings.

A meeting this Tuesday will recommend awarding contracts to private companies in a joint venture between Ealing, Harrow and Brent.

Ealing Council was required to reduce its 2012 budget by £85m for 2014/15 and identified the merging of services with neighbouring boroughs as a way of helping.

The Greater London Authority plans to save £300 million a year by 2013-14 through sharing back office services, such as IT. To date only £1.2 million of savings per year have been put in place.

The ground-breaking deal to share support services including HR, ICT, finance, benefits, council tax and business rates was approved late last week by the cabinets of Labour-run Newham and Conservative-controlled Havering.

London councils want to tackle the government's austerity measures through adopting shared IT services model by April 2016

Islington and Camden Councils are seeking approval for plans to embark on a shared IT services push, a move the local authorities claim would save around £4m a year.

The councils want to create a joint committee to oversee the creation and running of its proposed £5m shared IT services initiative by 1 April 2016.

The ground-breaking tri-borough programme between Westminster, Hammersmith & Fulham, and Kensington and Chelsea councils has already seen several key departments adopt a shared services model to save a hefty £40m a year across the three boroughs by 2015/16.

While much of the political focus of the scheme may have centred on combining services in libraries, children's services and adult social care, it has also heralded a new combined team for the three small treasury and pensions departments.

Local government has found itself at the forefront of current public sector spending cuts, leading to a renewed focus on sharing back office functions as the best way to make these cuts and protect the front line. However, experience shows that the promise of cost savings and other benefits from traditional approaches to shared services are not easy. Different thinking is needed; thinking that builds on the lessons of the past.

The starting point must be a willingness to look beyond the back office. As a recent report from the New Local Government Network found, these functions only account for approximately 8.9% of total council expenditure. Even if back office costs were significantly reduced, local government would not be able to fully respond to current financial challenges. This is not cost reduction – it is tampering.

The councils have been discussing ways of how they can share services to help cut costs without affecting the quality of services for residents since 2009. Their regeneration and economic development departments were identified as a potential for a shared service due to work that had already been undertaken in developing a Joint Economic Masterplan.

Minister Hayes was attending a number of engagements in Northern Ireland and met with the Finance Minister and officials from Enterprise Shared Services where Minister Hayes viewed the successful implementation of shared services in the Northern Ireland Civil Service (NICS), including a tour of an IT shared service centre in action.

The new shared services arrangement will cover bodies including Her Majesty's Courts and Tribunals Service, Her Majesty's Prison Service and the Ministry of Justice Head Office.

The spending watchdog’s report found that ‘despite significant cost and effort’, the sharing of services across eight central government departments has been overly complex, and led to reduced flexibility as well as increased costs.

Eight shared service centres were created across Whitehall following Sir Peter Gershon’s efficiency review in July 2004. They provide joint services across finance, procurement, human resources and payroll functions.

The criticisms of the shared services arrangements, which are supposed to cut back-office costs within the public sector, retread some familiar ground, with the public sector lambasted for failing to act as "an intelligent buyer", implementing overly costly and complex software, and not delivering expected savings amid spiralling costs.

The report, published by the National Audit Office, drew on evidence from its previous reports and those of other organisations, in order to identify areas where the government could improve shared services. It criticised departments for working in silos, and said that they must work together to plan areas that could benefit from integration.

The first thing to stress is that I’m no cheerleader of shared services. Anyone who reads us regularly should realise that we try hard to be independent and look at everything – whether it is technology, procurement initiatives, the performance of public sector organisations – on its merits. We’ve been pretty rude for instance about the lack of best practice shown by some Whitehall shared services operations, for instance! (I have to post hard copy invoices to them – crazy).

Advanced Business Solutions won the contract for the financial shared services system and a single, multi-company financial management system has been implemented. The system also integrates document management and SAP’s BusinessObjects business intelligence.