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Adapting to funding cuts in local government with shared services

Published 07 February 2014

Jenny Poole, Head of GO Shared Services, on how four councils have come together to transform services and save £3.8m over 10 years

Shared services, despite much of the promise, has had a rough ride in local government. It seems that it is the disasters that have grabbed most of the headlines. I think that is a skewed view and to provide greater balance, I wanted to outline our experiences here at GO shared services.

In 2009, faced with increasing financial pressures, Cotswold District Council, Cheltenham Borough Council, Forest of Dean District Council and West Oxfordshire District Council decided to break out from traditional administrative and regional borders and collaborate across back office operations. It was to be an exercise that, out of necessity, went beyond simple cost cutting measures; services were transformed so that we could deliver ongoing, exponential savings.

We knew the project would face scrutiny from the regions' taxpayers and councillors but we felt confident that by centralising back office tasks (that were being repeated across four organisations), we could improve services and make savings that could be diverted to the front line.

Technology would play a crucial part in the services so we engaged with SCC, which used the SPRINT II framework agreement, to identify a suitable ERP technology to underpin finance, HR, procurement, and payroll services. The procurement process concluded that the Agresso Local Government ERP Platform from UNIT4 was the right solution for us, with both its flexibility and track record in local government being key.

The GO shared services team managed the implementation using the UNIT4 public sector fast start approach to create a 'Golden Client', an out-of-the-box ERP solution with standard local government processes which meant less technical customisation.

The whole point of sharing services is to work to a common platform. A lot of shared services, as pointed out by the Audit Commission, fail because the provider tries too much to cater to individual organisational needs. A simpler approach with less customisation resulted in a relatively quick implementation that was on budget.

One of the most important challenges was to manage change effectively. Staff and resources from each core function at each organisation would need to be transferred into the single shared service and start working in a completely different way. This was a daunting process so we put the wheels in motion early on to engage with employees. We appointed Change Co-ordinators in each organisation who worked with staff on ideas, suggestions andin generally setting expectations. This approach of openness and communication, combined with training on the new technology, helped staff hit the ground running with the new 'way of working'.

The councils have now brought together four core administrative functions from four separate organisations onto a single Technology Platform that serves 1449 business users. Finance, HR, procurement, and payroll services are provided to the authorities with greater flexibility, efficiency and cost effectiveness. We have also brought in Cheltenham Borough Homes Ltd (an Arm's Length Management Company for Cheltenham) and Ubico Ltd (an environmental maintenance organisation).

The shared service is on course to deliver cumulative savings of £3.8m over 10 years. From April 2013, the shared service will be delivering savings of £673,000 per annum.

Councillors certainly believe that we have delivered maximum value to taxpayers with more efficient systems. For instance by using employee self-service for tasks such as requesting annual leave, claiming allowances and expenses, requisitioning goods and paying suppliers we removed substantial administration. This has contributed to, on average, a 23 per cent reduction in costs per year on back office services.

Also, rather than shuffling paper, functional experts can concentrate on delivering great services. For example, we have a team of HR experts that are providing strategic advice on supporting and getting the most from our people, where previously this was not available.

For the first time, managers have access to one set of real-time data. Given the need to save costs and navigate tough times, this improved visibility enables managers to make faster and better informed decisions on the deployment of budget and strategy.

Of course we all realise at GO Shared Services that the project is not a destination but a process, as such we plan to move forward and invite other, similar organisations into the fold.

Getting GO shared services up and running has involved a great deal of hard work, but we can look back at what we have achieved and say it has definitely been worth it. To those that are fearful of taking a step into shared services, our experience is that if managed carefully it can be a fantastic starting point to meet funding challenges in local government.

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