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There’s a touch of intended irony in the title of this article…from my personal experience successful delivery of a full shared service model is anything but simple – well at least at this juncture.

 

But don’t just take my word for it, according to Audit Commission research approximately 2% of public services are fully shared. I should emphasise the statement ‘fully shared’ as there are numerous examples of shared procurement, or I’ve even heard centralised services described as “shared”…but they’re not the Real McCoy.

2% reflects a modest national position given all the hype about shared services providing a means of conveying efficiency savings; and as public services begin to embrace the Comprehensive Spending Review’s £81bn retrenchment programme aimed to address the UK ‘s burgeoning fiscal deficit.

At present shared services occur largely at random, are developed organically, through serendipity rather than via policy orchestration. I consider this is something for the Government to contemplate – that is, facilitate the process of shared services through enabling frameworks and that should prompt an acceleration of such change programmes; and more importantly the realisation of cashable savings given the economic context. Section 75 of the Health Act is the only example I’m aware of that guides and encourages shared services between health and social care…however, if wider enabling legislation was enacted this may act as a catalyst for progress to be made on the current 2% public sector shared service landscape.

Emergent case law has been another inhibiting factor, in particular the London Authorities Mutual Limited (LAML) case that found the sharing of a Local Authority insurance services organisation to be ‘anti-competitive’. Such case law decision-making has the impact of dissuading organisations from the risk-taking that’s often required with change, and shared service change specifically. Throw into the mix the labyrinthine nature of the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), not to mention the Equal Pay Act (both will apply to a full shared service model) and it can become a field day for the lawyers…but does not help improve efficiency or reduce cost.

All of this may sound somewhat negative – however, from my experience, provided the partnership works shared services yield significant savings and customer service improvement. The HR shared service between the London Boroughs of Sutton and Merton (with Sutton acting as the lead, or host, service provider) has already yielded over £500,000 savings from structural unification, de-layering and addressing duplication. We are currently implementing the next phase of the transformation through joint procurement, implementing joint systems and undertaking business process re-engineering that the economies of scale from the shared structural entity will generate another £800,000 savings. To set this in context - that’s a combined £1.3m savings from a (shared) budget of just over £4m; or approximately 30% of the overall cost…demonstrating shared services can be a vehicle for realisation of service transformation and delivering significant cost savings. It’s an approach but not a panacea.

I attribute much of the success to the clear leadership provided by both Councils’ chief executives, the trust engendered between the partner organisations, as well as the business case for shared services clearly demonstrating the benefits outweigh the costs. The business case was helped by the near mirror image of terms and conditions of employment – without such mirroring the costs of TUPE protection (as the law currently requires) could make a shared service cost prohibitive.

I also consider that in our case small has been beautiful: it reduces complexity and promotes trust. In larger partnership arrangements too many partners with different business drivers and perspectives may result in insufficient common purpose with trust being stretched to breaking point.

However, rather than relying on trust and serendipity a clear national policy enabling framework would be very timely to increase full shared service from 2%.



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Written by Dean Shoesmith   
Friday, 28 January 2011 11:05
Last Updated on Thursday, 24 March 2011 15:39
 

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