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Shared Services

Communities and Local Government, in their paper ‘Developing the local government services market’ define shared services as ‘where two or more authorities work together to commission and/or deliver a service or function for the purposes of improving that service or function’. It appears that such a concept is well documented amongst local authorities although the full implications/opportunities of shared services remain at a preliminary stage. The Audit Commission paper 'Value for Money in Public Sector Corporate Services' and the 'For better, for worse: Value for Money in Strategic Service Delivery Partnerships' add value here.

According to the IDEA, this will involve redesigning jobs and work processes to improve customer services and reduce costs, with the ultimate aim of improved efficiency. It can often entail the centralisation of back office services such as HR and can enable multi function working (e.g. linking HR and Finance together). However, front office services can also be shared such as a Customer Contact Centre.

Examples of shared services within local authorities are plentiful. One such example is multi-agency arrangement between Stoke City Council and its partners to set up a single service organisation to provide housing, health, police, council and voluntary sector services to a housing estate with complex and overlapping needs.

IDEA produced ‘workforce planning in shared services’ which addresses the key issues, including an analysis of HR functions in a shared service – such as undertaking a SWOT analysis to identify key areas of activity or improved methods of working, scope and degree of commonality between parties required and the degrees of standardization of delivery.  Shared services within HR would include recruitment processing, pay and benefits administration, training, and personal information/data processing. Once implemented, HR will need to focus on the type of skills, knowledge etc required within the new structure, identifying gaps and communicating with staff the proposed changes.

IDEA note that HR could undertake a feasibility study to consider questions that include: which transactional elements of the service lend themselves to the shared service model? can the functions and processes be mapped? are teams able to measure existing work processes in which savings are to be secured?

The IDEA website also advises on the general considerations, processes and possible monitoring/outcomes of shared services in workforce planning. One such method is the use of benchmarking by the use of key performance indicators. IDEA note that this allows for a more effective corporate view of potential HR implications and informs any possible changes to other HR policies or the development of new policies. This data can then be utilised to support the management of the recruitment process, develop an overall view of the redeployment situation and, where required, develop exit strategies.

The Audit Commission in ‘For Better, For Worse  Value for money in strategic service-delivery partnerships’ recommend councils invest appropriately in their client-side management capacity, ensuring adequate resources and the right mix of skills are matched. This is important during procurement and ongoing contract management. For example, when council employees are due to be transferred to contractors, councils should consider carefully whether certain key individuals may be best placed undertaking a client-side management role.

Shared services survey 08 by BrowneJacobson highlights key areas for joint management including procurement considerations and timescales, communication amongst participating authorities and staff, managing partnerships, compliance and exit routes. Relevant case studies to these issues are provided.

Any workplace transformation project should evaluate the potential for delivery of shared working, and incorporate the impacts this shared working may have on a Council’s office / workplace requirements. For example it may be that touchdown areas within a Council’s proposed office may need to facilitate use by partners providing shared services, and this will dictate the location, ease of access and ICT needs of those touchdown areas. Alternatively, through their shared service partners, the Council may be able to rationalise space by moving their staff to remote working and operating of the shared service partners office / workplace. Further guidance is available here.

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