Shared Services A private sector perspective Geraint Williams, Strategy Manager, BT Education and Local Government North West Centre of Excellence Stakeholder Event – 8 th June 2005

Interpreting the Gershon agenda DriversOpportunities Transactional Services Frontline services Corporate services (Back Office) Procurement BT direction of travelLG direction of travel Shared Services Personalised Services Health Services Communities Outcomes Next Generation Network Building market in apps services Self-service Add partnership capabilities into the network Efficiency savings for LG Recycle resources into the frontline Incentives to join up better CPA to measure results

Shared Services Shared Services refers to the clustering of public service providers – independent of geography or structure to deliver public services in an integrated manner Inter-Authority Demand from 2+ LAs is aggregated and procured Revenues & Benefits Local Authority to Local Authority LAs sell services to other LAs ICT Services Inter-Agency 2+ agencies aggregate demand to procure Local Authority and Primary Care Trusts Intra-Authority Sharing services within a Local Authority ICT, HR & Finance, Access, Revenues & Benefits Inter-Agency (outcome-based) Services procured with specific outcomes as target Education, Care, Police, Health Examples in PracticeDefinition This is not new!!

THE BENEFITS Efficiency savings of £100m in 3 yrs Beacon status for social inclusion through ICT (2003/04) Improved CPA ratings (poor to good) Reducing council tax (highest to mid- table) Procurement savings of 10% p.a. Liverpool (LDL) – Intra-Authority THIS REQUIRED… BT Investment of £55m (with £30m in first 2 years) in services & facilities Investment in change management to overcome cultural, political & legal obstacles Using ICT to allow resources to be reallocated to more productive functions Innovation in legal and commercial constructs (JV = non-threatening to staff) THE VISION Re-engineer services  citizen-centric services Efficiency savings to enable reallocation of resources Deployment of new technologies to develop new contact centre Building capacity in the market

Joint Venture (CSD) Citizen Suffolk County Council Mid- Suffolk District Counci l Other DCs # of councils Total Cost of sharing services Total cost to all councils combined Incremental cost per council Add more councils Declining Incremental cost per Council added to the JV CSD – Inter-Local Authority The incremental cost of adding a DC declines for each one added to the JV Economies of Scale

But questions remain… In a multi-agency format…Innovation Have we seen the limit? What next? How can we experiment? How can we apportion risk? New modelsLocal Government Is it easier to restructure? What might that look like? Or will PS agencies work together? If so, how? Will this work? Is there a limit to the number of agencies? How many? Governance? Key issues to consider What will they look like? How will the private sector interface with the public sector? What role for the voluntary sector? Mixed Economy considerations

Choices to be made… Incremental change Step-changeQuality Cost Value for Money Public Value (SMEs, Economic Regeneration, Social Inclusion) EITHEROR

Barriers remain Flexibility from the private sector Trust in the private sector Why will successful authorities take part? Capacity & Skills within Public Sector Geographical/ Technological issues Internal organisational structure Cultural / Organisational Political Financial Governance Political support across multiple agencies required PS Agencies may have different agendas Fears of dilution of power OJEU Requirements unclear How will these operations be governed? What is the decision-making process? Who takes accountability for targets? How will budgets be pooled? Where will the funding come from? Limited by existing contracts with private sector How do we apportion risk?

Opportunity Realisation PartnersCommercial ConstructsEngagement (at different levels) Application (i.e. R&B) ThemePartner Agency / Private Sector Function (e.g HR)Private sector Shared ServicesPartnerships Vision Motivation RCoEs / LAs Central Govt Central Government: Thought Leadership Frameworks with OGC Identity Management Solutions Competitive market influence (NGN, B/band) Provocation Regional Government RCoES (opps/ vision for Shared Services) Regional Leadership Local Government Public Service Boards Local Area Agreements Public Value + Improved Outcomes Managed Service SPV – with or without staff transfer JV – with or without staff transfer Co-operatives Programme constructs (e.g. LIFT, LEP) Ltd Liability Partnerships Incremental partnerships Public Interest companies Public to Public partnerships Intermediary Service Organisations GovernanceLocal Authorities Constructs & Partners ReputationLAs /Public Services TrustVoluntary Sector

The cultural challenge… Public Sector needs…Private Sector needs… Revenue Asset and investment utilisation Return on Investment Social Inclusion Vibrant local economy To meet CPA targets PUBLIC VALUE SHAREHOLDER VALUE How do you reconcile the two? Build on previous learning experiences to bind together both requirements – vision, leadership, detail

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