Forcing shared services on us will not work, warn council IT chiefs

IT directors balk at idea of financial penalties being used to accelerate large-scale schemes.

IT directors balk at idea of financial penalties being used to accelerate large-scale schemes.

Local authority IT directors have voiced opposition to Ian Watmore's announcement that large-scale shared services projects between councils will become mandatory. Senior IT management condemned any attempt by central government to mandate the use of shared services centres where councils would have to pool resources with each other.

The Society of IT Management's president, Angela Waite, said, "If central government wants to encourage us to join shared services centres, it would seem to be nonsense to attach a financial penalty as an incentive. I do not think it is necessary to mandate shared services."

Watmore, who is head of the prime minister's delivery unit, told a Socitm conference last month that "it was no longer optional to share" and that local authorities should expect the forthcoming Comprehensive Spending Review (CSR) to assume that large-scale shared services were already a reality.

The CSR sets spending levels for local authorities and the rest of the public sector, for rolling three-year periods. The next review will set spending from 2008 to 2011.

The Office of Government Commerce (OGC), which is charged with getting value for money from public spending, also warned last month that councils could not continue to work on their own.

The OGC's chief executive, John Oughton, said that councils had already announced 130 shared services centres, "and the business case for them all can't work".

Surrey County Council's head of IT, John Gladman, said, "I will only support it [shared services] if councils are helped with extra funding to pay for the cost of the change programme to implement it."

Geoff Connell, deputy head of ICT at the London Borough of Newham, said shared services centres had yet to take off because of "political unwillingness to lose local employment" and "because the most advanced authorities can end up carrying the least advanced, accelerating the poor but holding back the good".

Sunderland Council's corporate head of IT, Steve Williams, said, "It's very difficult for people within an organisation to conceive of giving away their core business - revenue and benefits, and council tax collection."

Local authorities are represented on central government's Chief Information Officer Council by two council IT directors. Jos Creese, a member of the CIO Council and Hampshire County Council's IT director, said, "If we simply target large-scale collaboration, it will be harder and take longer than if we do smaller projects that will provide benefits right now."

Cardiff Council has recently implemented a SAP system across many of its back-office functions and does not believe being forced into shared services would deliver major savings. Its head of information systems, Crispin O'Connell, said, "We are not going to want to take out our payroll system and share it with someone else. Even if we brought other authorities in, the savings would not be that great."

Back-office services, which could be run from a shared services centre, account for a relatively small proportion of council spending, he said.

The shared services projects that have already been set up around the UK occured because the councils involved were at the same point in their IT upgrading cycle, said Socitm members.

The joint procurement of an Oracle customer relationship management application by 10 Staffordshire councils for example occured because none of them had previously procured a CRM system.

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