Local authority IT directors would rather set up
small-scale shared services that deliver immediate, tangible
benefits than join large-scale shared services centres of the type
that Ian Watmore has warned will become mandatory.
Many IT managers are already achieving sizeable efficiency
savings and improvements in the services they provide to the
public, through projects with a limited scope and clearly defined
objectives.
But last month, Watmore, the former government CIO who now heads
the Prime Minister's Delivery Unit, warned a Society of IT
Management conference that "it was no longer optional to share"
(Computer Weekly, 28 February).
He also said that the next comprehensive spending review, which
will set spending limits across the public sector from 2008 to
2011, will assume that councils benefit from the economies of scale
promised by large-scale shared services projects.
Watmore's warning followed a message from the Office of
Government Commerce - the body responsible for getting value for
money from public spending - that councils were proposing to join
too many small-scale shared services centres.
The OGC's chief executive, John Oughton, said that, with 130
shared services centres proposed for local government, "the
business case for them all can't work".
Socitm's president, Angela Waite, said, "We have to look at the
benefits to the public of joined-up service delivery. It can be
done on a large scale or a small scale.
"Watmore referred to having one benefit service for a county - a
good idea, but it will take a long time to achieve that. Local
authorities can move more quickly if they take smaller steps."
Those shared services projects that have been successful so far
have been set up by a limited number of councils working towards
jointly agreed objectives.
Several small, but successful shared services projects have been
set up under the umbrella of London Connects, an organisation
engaged in establishing shared services projects among London's 32
borough councils.
London Connects chief executive Steve Pennant said, "We would
not be able to get all 32 London boroughs to work on the same
project; we would have to start with five or six or seven.
"It works in clusters in London and I'm sure that's how shared
services will work elsewhere."
London Connects is working on a project to share disaster
recovery between councils. The body is also looking at an
out-of-hours call centre for all of London and systems for a single
non-emergency telephone number.
Local authority IT directors rejected the notion that the threat
of funding cuts could force councils to use large-scale shared
services projects.
Sunderland Council's corporate head of IT, Steve Williams, said,
"Mandating things goes against the local perogative. Joining a
large-scale shared services centre could go against the need for
Sunderland to provide its residents with best value. If a system
used by Sunderland works superbly, it might be worse value to give
it to someone else.
"Mandating is a poor idea. Incentivising good practice and
penalising bad practice is better."
Birmingham City Council's director of business solutions and IT,
Glyn Evans, who is also one of two IT directors to represent local
government on the CIO Council, said, "One of the most obvious ways
for central government to encourage the use of large-scale shared
services centres is by changing the way central government
expenditure is targeted.
"In principle, I don't have a problem with this, providing it
doesn't become too prescriptive in determining how local government
should achieve things."
Surrey County Council's head of IT, John Gladman, said
large-scale shared services projects could be successful "if they
are mandatory as part of the Comprehensive Performance
Assessment".
He said, "The extra funding model for local authorities to
achieve the 2005 e-government target could be a suitable model to
emulate for funding the development of shared services."
Gladman's council will migrate its final front-line service to a
new shared services centre next month. Adult social services will
be the last service to start using the centre for finance, human
resources, IT, procurement and property transactions.
Surrey County Council expects to make a net saving of £46m over
10 years after investing £10.8m to integrate MySAP R/3 Enterprise
with telephony and call logging systems at a new purpose-built
shared services centre.
Greater Manchester Fire and Rescue Service's head of ICT, Damian
Parkinson, said, "I think central government should lead by example
- as Ian Watmore has indicated - because there is serious
duplication and inefficiency in Whitehall departments that have not
traditionally shared their services.
"Central government could show a real lead and demonstrate with
hard figures how shared services could free up resources."
Local authority IT directors voiced concerns about the track
record of major public sector IT projects.
Cardiff Council's head of information systems, Crispin
O'Connell, said, "There is a history of large-scale projects that
have just gone down the pan. Even in the private sector, businesses
have not always been able to harmonise systems."
One of the main issues that is preventing local authorities from
using large shared-services centres to provide key back-office
functions is the fear of losing local jobs.
The London Borough of Newham's deputy head of ICT, Geoff
Connell, said, "There is a political unwillingness to lose local
employment.
"For example, if the smaller local authorities in Merseyside
bought into the call centre jointly run by Liverpool City Council
and BT, they would each need to lay off or otherwise find
employment for up to 100 staff."
Josie McGuirk, deputy chief executive of Rushcliffe Borough
Council - a district council in Nottinghamshire - said, "Once
councils have made all the internal efficiency savings that they
can, shared services offers a possible route to making deeper
savings.
"However, my view is that shared services can present a threat.
Council officers could fear loss of control, loss of importance or
even failure. Working in partnership with councils of differing
political control can also present a barrier."
Hampshire County Council's IT director and CIO Council member,
Jos Creese, said, "Technology has a lot to offer. Technology
supporting flexible and mobile working could yield productivity
improvements.
"Those are the sorts of things that most local authorities are
already looking at, if not actively involved in."
Read article: The challenge of transformation