SSON Roundtable Debate - UK Public Sector Shared Services - Where Now and Where Next?

Sharing services has risen up the agendas of the				perhaps the challenges are. And also what sort of
UK's national and local governments in recent				services you're comparing that with. Because as I
years, propelled by political and financial trends as				see it, shared services range across such a vast
well as by more concrete factors such as Sir				array of the different public sector areas - we
Peter Gershon's 2004-5 Efficiency Review and Sir				were talking earlier on about this being local
David Varney's report on transformational				authorities but clearly it goes to health and other
government. In an attempt to throw some light				public sector bodies as well - and from that point
on recent developments and to examine where				of view the real problem you'll have it seems to
shared services may be headed in future, SSON				me is comparing apples with apples.
convened a roundtable debate involving a group				Tony Isaacs: I can give you a fairly high-level
of practitioners and advisors at local and national				description of what we're doing, and that is that
level, chaired by SSON's online editor Jamie Liddell.				we're using some software you may be familiar
The results were, indeed, illuminating...				with - Mosaic Data - and we've populated a lot of
Attending were:				databases according to the information that we've
Tony Isaacs				gleaned from there, and that's proving to be very
Programme Manager				much the benchmarking process that we're going
Warwickshire Direct Partnership				to go through. And there are certain authorities
The Warwickshire Direct Partnership is a shared				out of the partnership that are leading on this.
services programme comprising all six local				For each of the projects that we have, we have
authorities in the county of Warwickshire: North				lead authorities who volunteer to lead on particular
Warwickshire Borough Council; Nuneaton &				projects. We've got Nuneaton for example to lead
Bedworth Borough Council; Rugby Borough				on one, as well as the county, and the county has
Council; Stratford District Council; Warwick District				information that it uses from its observatory, and
Council; Warwickshire County Council; and three				there's a pooling of information, and there's an
private-sector partners in Steria, MacFarlane				agreement via the Improvement Forum for
Telesystems and Northgate Information Systems.				example whereby they do concentrate on specific
Dominic Swift				areas with the data they've accumulated -
Head of Shared Services				whether it's county-wide or just individual
Browne Jacobson				authority-wide. But basically they work together
Browne Jacobson is one of the largest law firms				as best they can to provide these benchmarking
in the Midlands with offices in Nottingham,				criteria. It's not a quick process by any means.
Birmingham and London. The firm acts for over				But over time we build up that data and then we
100 local authorities, either directly or through their				can use it from year to year to do comparisons
insurers. It recently published its Shared Services				to see how things are improving.
Survey '08, one of the most comprehensive				In addition to that I don't know if you're familiar
surveys ever carried out into shared services in				with NI14, the latest government key indicator
the UK.				which has just come out, which is to do with
Peter Telford				avoidable contact with clients - customers - with
Chief Executive Officer				local authorities. And we'll be using the CRM to
Research Councils UK Shared Services Centre				glean quite a lot of information via the CRM
Research Councils UK (RCUK) is a strategic				system. But it is a corporate-wide key indicator,
partnership between the seven UK Research				so you will have other services, other
Councils. RCUK was established in 2002 to enable				departments, feeding in this information as well.
the Councils to work together more effectively				That information is supposed to be started in
to enhance the overall impact and effectiveness				October of this year and it will be used
of their research, training and innovation activities,				year-on-year to gauge how we're doing, in terms
contributing to the delivery of the Government's				of avoiding avoidable contact, and looking to
objectives for science and innovation.				improve that.
Ray Tomkinson				Peter Telford: I think it's fair to say whilst we
Local Government Improvement Specialist and				have not yet built the longevity of data that Tony
Shared Services Author				describes - and I absolutely agree with him that
Ray Tomkinson is the author of Shared Services				building a profile and a trajectory is invaluable as a
in Local Government: Improving Service Delivery				benchmark - we haven't really got to the point
(Gower, 2007). Ray managed the Welland				yet where we are able to benchmark our service
Partnership shared services project and currently				delivery over a period of time; what we are doing
operates as a consultant.				is assessing our performance as we transfer
SSON: Peter, you're at the head of one of the				services. We've got a baseline against some
more prominent national shared services centres				services from the Research Councils and from
[SSCs]. Can you explain a little about the drivers				my own experience and from talking with others
behind the move in your organisation?				in the public sector we will then aggregate what
Peter Telford: Behind the Research Council's				we believe will be appropriate targets for the
business case are benefits focusing on what are				Research Councils against their baseline. But I'm
seen as financial gains which will be passed back				with Dominic: initially it is very difficult to compare
to research and the research community, but				apples with apples and ensure you've got a
probably more importantly in the early stages is				representative benchmark.
the feeling that we can secure better				Dominic Swift: Peter, it's very interesting from my
effectiveness in business support to that research				point of view. I quite agree with you about the
community by aggregating the seven Research				"apples with apples" thing. I think what's been said
Councils' services onto one common platform, and				about the public sector is very true: it's much
transforming them. The business case started				more transparent, there's much more desire to
with an outline about two years ago. There was a				learn from each other. One of the things I'm doing
lot of work done on certain parts of the shared				tomorrow actually is go down to sit in in Kettering
service model even before that, but the activity's				where they've been running a shared services
really come together in the last two years. The				project for many years - well, well before
full business case was accepted by the Research				Gershon and Varney and the rest. And that's
Councils in line with CSR07 [Comprehensive				very interesting because people are open about
Spending Review 2007] in August last year, and				what's happening in shared services and happy to
the intention at the moment is that we will go live				learn from each other. The difficulty seems to be
on the platform at the beginning of next year. We				that they range over such a wide area, the
already have some services live in the IT and				danger is that unless people come to some
strategic sourcing areas.				common terminology about what outputs are
SSON: Tony, your project's been going for rather				going to be defined for particular services it may
longer than that. Would you say that the drivers				be possible to benchmark over time as Tony's
behind the Warwickshire Direct Partnership are				doing, but actually benchmarking across different
similar?				projects will be very difficult.
Tony Isaacs: I think ours were slightly different in				Ray Tomkinson: I think that's very valid. One of
that when we started off in 2002/3 the driver				the issues is that there is no commonality across
behind that was, basically, to capitalise on the				authorities as to what constitutes a service. So
money that was available from central				what you tend to find is that people dive for a
government at the time. We made a bid as the				process - and even when they dive for a process
Warwickshire Online Partnership, and set up that				it doesn't tell you an awful lot about the service
particular group specifically to bid for that money:				that you're trying to share. And there's often a
a total of £2m. We identified a number of				real difficulty in stopping trying to find the trees
different projects that we would attempt to				when you're trying to fight your way through the
procure and implement with that money, not least				forest. So from that point of view I think
of which was the joint procurement by all six				benchmarking has on occasion got a very bad
authorities in Warwickshire of a CRM				name because people use it as an excuse for not
[citizen-relationship management] system and				doing anything; and it's only in the past couple of
associated telephony systems. We got the full				years where I think people have been much
£2m and since then we have actually				more prepared to be open about the fact they
implemented it; we jointly went to procurement				need to consider sharing as an option and
and we've ended up with the Northgate front				sometimes benchmarking isn't used as a blockage.
office CRM system.				SSON: Let's move on from benchmarking. We
Now I don't think the goalposts have changed, but				were talking a little about the private sector a
the drivers have. I think the drivers have changed				minute ago - are we of the opinion that the
in that there is no money available now; it's				private sector is an absolute necessity within UK
exactly the opposite insofar as before there was				public sector shared services, and to what extent
money splashing about, if you will, from central				is it a foregone conclusion that this is going to
government, and now it's the opposite insofar as				result in a degree of privatisation of services?
with CSR07, with all the efficiencies and demands				Dominic Swift: This is a question we asked in our
that there are on local authorities to save, there is				survey: the sort of view that we had was that of
an overriding need to make things more effective				course the private sector is an important potential
and more efficient, and shared services is seen as				partner in shared services, but there were just as
being one key method of doing that - with the				many opportunities for the public sector to work
consequence that we are in a position now where				together without the private sector. So, yes, it's
our chief executives, our leaders, are very keen				part of the picture but it certainly isn't necessarily
in looking at what can be done. And based upon				the whole of it. And I don't think that privatisation
that - or around all this - is the whole area of the				is an inevitability from shared services: where we
two-tier structure within Warwickshire, and the				saw the private sector coming in, and the survey
drive that the government may want to push -				really highlighted this, links back to the funding
and seems to be pushing - with regards to				issues we discussed earlier on.
unitaries. But Warwickshire is very clear that it				Where you needed some sort of IT facility and
wants to retain its two-tier organisational				commonality across a number of authorities and
structure and will do so by sharing services.				participants, quite often the private sector partner
Dominic Swift: Tony, I just want to follow				was someone who could deliver that in order to
something through on that, because it's a theme				relieve some of the initial cost difficulties of setting
that emerged when we did our research on				up a shared service which frankly couldn't be
shared services [Browne Jacobson's Shared				borne by some of the participating authorities.
Services Survey '08] that certainly efficiency				SSON: Tony, that's certainly what you were
savings and improvements in the way services				saying about the initial start-up of Warwickshire,
are delivered are key drivers, but what you've				isn't it?
identified as a lack of money was one of the real				Tony Isaacs: Yes certainly: and it's ongoing
inhibitors, because in order to deliver shared				because we've just finished the renewal of the
services there is a considerable cost: You've				CRM contract and the telephony contract, so
already mentioned telephony which was obviously				from the beginning of next year we will actually
put in as part of the grant, and one of the				be embarking on new five-year contracts
problems that people seemed to face was the				replacing the existing ones. And that's the position
immediate increase in costs to deliver a shared				of the CRM, the telephony, the ICT systems
services stream before any efficiency savings				around it - so yes, it's inevitable that we have to
could actually be delivered.				go down that route. We've had good - very good
Tony Isaacs: You're absolutely right insofar as				- negotiations with the private sector on this and
there's a need to spend in order to deliver				I'd like to think that all of us have come to a very
efficiencies, and what we're seeking to do is to				good, fair new contract.
build up good, strong, powerful business cases				Ray Tomkinson: I think actually the point that was
that maybe looking over a five-year spread, so				made about investment is a very good one.
that while there is a recognition that to begin with				There is actually no reason why local authorities
you may need to spend money, over the period				can't do sharing on their own without the private
following that it's anticipated that there will be				sector, and there are lots of examples around
savings. And Warwickshire may be different, but				now where groups of councils are trying to do
we don't necessarily regard it just as pounds				public-public partnerships. But I do agree: where
saved: it could be efficiencies. So it's non-financial				there is a real need for investment - particularly
benefits as well as financial ones.				around IT - then that's where the problems start
SSON: Ray, do you see many differences				for local authorities, and that's why they often do
between the drivers for local and national shared				resort to the private sector.
services?				But I do think that it's worthwhile pointing out that
Ray Tomkinson: Yes I think there's one big				as much as there are needs for investment,
difference, which is the issue of government				particularly in IT, there are lots of services which
compulsion, as it were. There's no doubt about it:				do not need that investment, and I'm thinking of
central government departments recognise that				professional services like planning, or building
they really don't have much alternative at the				controls are another good example, or
moment to creating some element of shared				environmental health is another good example,
services - because the Treasury makes sure that				where simply you're dealing with people. One of
they do, because the Treasury controls the purse				the problems though that local authorities do find
strings. It's less clear that in local government				in that area is the scarcity of professional
every council is going to have to go down the				planners, environmental health officers, building
shared services road.				control officers. And often they have to partner
As was being made abundantly clear a minute or				with the private sector simply for that reason.
two ago, local authorities have different ways of				Peter Telford: We need to get back to the point
approaching their financial restrictions or their				that I think Dominic made earlier which is in
political considerations, one of which is the unitary				analysing what you're trying to achieve with your
agenda - or the two-tier agenda in other councils.				SSC you then start to look at how you're going
So some councils are going to have to go down				to do it. And how you're going to do it may or
the shared services route because it's the only				may not include the private sector. If you do
way organisationally that they're going to function.				seek investment from the private sector, they
Other councils don't have that imperative at the				will seek a return on that investment; you just
moment and I'm working with one group of four				have to recognise that. They may indeed want a
councils which are looking at sharing services but				profit which may erode the efficiency savings you
not because of financial pressures. They're looking				seek to make.
at it because they want to make service				I think another thing that the private sector brings
improvements, to improve resilience of services,				is experience and expertise in the sorts of change
and also give opportunities to create new				and benchmarking data which you may need.
services. So it's a very different agenda between				That said, I think the blend of public and private
the two.				sector in trying to get to a shared service centre
SSON: Peter, from a national perspective are you				is the right one and the transfer of risk to the
seeing an increased pressure from government to				private sector through doing this is always pretty
implement?				key in terms of what you want to get out
Peter Telford: Yes. Historically I've been in shared				against your project.
services in the private sector, local authority and				Tony Isaacs: I was just going to pick up on the
now central government so I suppose I can				point that if you can go for joint procurement as
absolutely empathise with the previous comments.				opposed to individual authority procurement, you
I think the compulsion from central government is				can really reap the benefits, and the bottom line
largely fiscal although there is a feeling that the				will be that you do make considerable savings -
transformational agenda that sits behind it is also				not so much a profit will result, but it will produce
very prominent. I think the other difference in				efficiencies in savings. We found that with our
central government is it is easier to identify and				negotiations latterly with Northgate and
reach a critical mass where you can actually				MacFarlane, and also more significantly during the
effect a transformation and deliver efficiency and				course of the contract that we've just had, when
effectiveness. At the local government level, it is				we as a partnership stuck together and wanted
more difficult to create critical mass - which then				to get individual things out of Northgate, and/or
makes the funding routes and the benefits				MacFarlane, by standing firm we could really apply
probably more difficult to determine in the early				the screws to them, and they were forthcoming;
stages.				so we could really achieve quite significant savings
SSON: OK. There's been a lot of talk about what				on different aspects of procurement that we did
advantages other than cost savings can be				during the course of the four years we've had
delivered through shared services. And this brings				the system.
us on to the issue of benchmarking. When it				In terms of profit, I'm not sure whether profit's
comes to savings you can obviously benchmark				the right word as I just mentioned; what we're
against what you're saving and how much you've				looking for are savings and efficiencies and I
saved against previous budgets, for example. But				choose to use those terms rather than profit. In
when it comes to service-delivery, how can one				essence we can justify what we're doing now:
establish exactly what you're benchmarking, and				adding value, making sure we are getting the
against what and against whom? Is there a				market rate or better, and we can quite happily
common thread here in terms of where you go				and justifiably tell our chief officers and members
for benchmarking?				based on the business cases that we've produced
Dominic Swift: I think benchmarking's so different,				that we are getting best value, we are making
for different projects, is the long and the short of				savings and efficiencies on the basis of this joint
it. What we've seen through our research is that				procurement exercise.
there's a very wide range of different projects -				SSON: Moving on: the future form and structure
we've already talked about the drivers, and it				of shared services in the UK is, it appears, going
really depends on what you want out of your				to be determined in large part by competition
project. One of the frustrations that we heard at				between authorities, in a lot of areas. How do you
the national launches that we did of our review,				see local shared services existing in the UK in,
was that there wasn't enough benchmarking of				say, two or three governments' time?
the actual outcomes. And a lot of people said to				Ray Tomkinson: Two or three governments'
me "how do we judge whether this has been a				time, that's interesting. So that'll be two
success?"				Conservative and one Labour... I suppose my
One of the problems is that if you produce a				thinking goes like this: I think that in 15 to 20
much more efficient service, which is more				years' time you will see a patchwork quilt across -
attractive to the general public (if it is a				certainly the local government sector; I'm not
front-facing service, which more and more are) is				quite so sure about the central government
that it will actually be used more. And as a result				sector. And what I mean by that is you will have
you're getting better value, in terms of hits, but				a group of statutory authorities that are all
the cost of the service may actually go up. So it				geographically based - whether that's a county or
is quite a complicated job to benchmark and I				a district - there will be differences across the
think it requires some very clear outputs to be				country.
identified at the outset, and to look for				Secondly they will have different types of shared
comparable projects.				services in different areas. There will be some
SSON: Tony, you've got a wide variety of				that will be public-public; some that will be
services you need to benchmark...				public-private; and some that will be public-public in
Tony Isaacs: Yes, that's right. I can concentrate				terms of different sectors: health will have joined
really around the CRM system, because all the				in; the police will have joined in. Because the
information we've got is via customer services,				pressures of the CAA regime coming from the
and improvements we've made to that around				Audit Commission mean that all public sector
the CRM system. What we've done is take				organisations in geographical areas have got to
benchmarking as a very serious exercise in its				think whether it's better to work together than to
own right, and what we've sought to do is to get				work separately. And as a result of that I think
customer insight by using different databases,				you'll get a really different appreciation across, and
information from the CRM, information from				in some areas there will be very heavy private
MacFarlane - the telephony system - and pool all				involvement and in other areas probably none.
that information among all the partners. And what				Dominic Swift: Basically I think it'll depend a little bit
we've done then is to say "ok, concentrate on				on the nature of the shared service, to be
the areas that we want to concentrate on" and				honest. Sorry - I keep coming back to that point
to make sure that we do improve the services				really. It struck us during the course of the work
that we are seeking to improve. We have got				we did that there are two different forms of
what we call an Improvement Forum, which is a				shared service: the ones which perhaps have
relatively recent creation and which is proving to				been more prevalent to date, which have been
be very successful as well. And that's looking at				the sort of back-office, IT function - ICT-reliant
the way in which the CRM in particular can add				functions - and then the front-office function. Now
value to the whole process of improving				they have very different possibilities in terms of
customer services.				partners. If you look at the front office it is a
We are concentrating as well on a variety of				locally-delivered service and therefore your
different access channels, so we've got the CRM				partners are chosen by geography, and
system, we've got telephone contact obviously,				geography alone: they can't be chosen by much
face-to-face via our one-stop-shops - we've got				else, other than if you go to some sort of
eight of them at the moment, with another eight				call-centre arrangement. But the other services
planned for next year. We've got kiosks as well.				can actually be amalgamated a lot more and with
But also I think most significantly, in the next few				less sensitivity to geography.
months or so what we're looking to do is drive				So I think there are going to be some quite
ourselves forward with web self-serve, and look				different groupings and possibly some legal
to try to move people more towards that means				authorities who particularly drive the delivery of a
of accessing services. And I think that will be a				good service who perhaps sell to a very wide
double win because the customer will benefit				range of local authorities: health, via police, all of
greatly from that in terms of speed of service,				these are potential customers for them. And then
but also we will, because we'll drive down the unit				on the local basis it's going to be a lot more down
costs, and that quite clearly is a key method of				to politics and the dynamics between the
making savings.				politicians as to how well their shared services are
SSON: In the private sector a great deal of				going to be run, and I think some of the political
benchmarking goes on between individual				difficulties we have in Nottinghamshire, where I'm
companies and organisations, and as a result you				based, may make it quite challenging to get some
have the idea of world-class et cetera. Is it a				of those local shared services off the ground.
pipedream to suggest you might be able to get				SSON: Tony, I know this is something you've
similar systems set up in the public sector, in				been thinking about, and obviously as quite a
which every region and every locality has its own				successful service provider it must be on the
pressures?				agenda. So let's put you on the spot: do you think
Peter Telford: I don't think it is and I think the				you will be at the forefront of a successful selling
benefit of the public sector is, by and large we're				of services in the next couple of years?
not competing with each other, and therefore				Tony Isaacs: Yes I think I do in the next couple
people are much more willing to share information				of years, but if you're talking longer-term than
and the assumptions that sit under that				that I think - and I hasten to add that this is my
information to try to help each other along. And				own personal view - the likelihood is that there will
I'm quite heartened by that kind of culture. I think				be an increase in unitaries. And there could well be
the difficulty with the private sector is that it's				in Warwickshire as well. I can put forward a very
usually wrapped in commercial connotations and				rosy picture in some ways - but at the same
costings as well, which makes it very difficult to				time you've got nagging at the back of your mind
unpick to ensure you are comparing like with like.				all the time the difficulty that there is in actually
Albeit that said, the difference is that there is				creating successful shared services - and I think
much more evidence when you can find it and it's				that's from a political point of view as well as the
much more prescriptive in terms of service levels				straightforward business-case point of view.
than I would suggest you would find in the public				I think there will be more and more unitary
sector.				authorities, to be honest. And I wouldn't be
Dominic Swift: I'm very interested to see whether				surprised if even Warwickshire eventually ended
there can be some sort of worldwide benching or				up with two unitary authorities rather than the six
benchmarking which really does define the				authorities we've got now. I think it's almost
success of projects. I'd be very interested in				inevitable, and I think the government will continue
understanding more of what Tony's doing and				to apply the screws, demand more and more
how the measurement takes place, capture of				savings year upon year, and the consequences will
information and then the dissemination of that, to				be that it'll almost be inevitable that there will be
actually judge how that service is being delivered				more.
and where the successes are - and where

Democracy

SSON Roundtable Debate - UK Public Sector Shared Services - Where Now and Where Next?