Glasgow Council targets savings with £1bn shared services project

Major public sector organisations in Glasgow have come together in the largest shared services project outside Whitehall.

Major public sector organisations in Glasgow have come together in the largest shared services project outside Whitehall.

The move comes just days after a government push to promote the adoption of large-scale shared services to meet public sector efficiency targets.

Glasgow City Council, Greater Glasgow Health Board, Jobcentre Plus, Scottish Enterprise Glasgow and Strathclyde Police have appointed representatives to a board for the shared services project, which will have an annual budget of more than £1bn.

Although the public announcement of the deal (Computer Weekly, 14 March) highlighted joint working on frontline services, the biggest opportunity for cash savings will come from sharing back-office functions between different agencies.

The project's launch document said, "All staff will continue to be employed by their current agency. However, future benefits and efficiencies, including the sharing of back-office functions, could see significant money diverted to frontline services."

Ian Tully, Glasgow City Council's deputy director of financial services, said, "It is a pooling of existing budgets, it is about making money work smarter."

The council, with an annual budget of £2.3bn, is by far the largest body in the project. It recently finished implementing MySAP across its core back-office functions.

Tully would not say whether the MySAP systems would provide the core back-office functionality for the shared services project. The implementation could be used as a springboard for the partnership, but there were no firm proposals to do so, he said.

Last month, the council implemented MySAP in its final major back-office function, procurement. This followed the launch of MySAP for financial services, sales and human resources in 2005.

Glasgow City Council is targeting efficiency savings of £8m a year through smarter purchasing decisions that will be enabled by the procurement module. This is in addition to a £5m annual target for process savings.

The MySAP system has already reduced costs by £1.5m in the 2005-06 financial year. Some £1m of the cost savings have come from improved payroll processes and the other £500,000 has come from more efficient billing.

The council has created a 100-seat shared services centre to run its back-office services.

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