Shared Services Briefing

This briefing highlights many of the issues facing councils, and asks whether ultimately, shared service arrangements and partnerships increase the likelihood of full mergers.

It is important shared management commands staff support from each authority. Picture: metamorworks/Adobe Stock
It is important shared management commands staff support from each authority. Picture: metamorworks/Adobe Stock
  • Neil Merrick
  • Local Government Information Unit, (December 2018)

Since 2010, as austerity has bitten into public services, more councils have looked towards sharing, or partnership, as a means of saving money. Besides financial benefits, there are other advantages to be had, including the opportunity to recruit more experienced staff, and even create new roles, with a stronger employment base. Services may be improved, either through innovation by more effective in-house teams or contracting out. There are also pitfalls to avoid around gaining buy-in from staff, lines of accountability and geographical challenges.

Why councils share

Research by the Local Government Association suggests the number of councils in England working in partnership has increased steadily this decade.

District councils are most likely to share the majority of, or all, services including shared management teams.

Research by Cardiff Business School, published in January 2018, identified 18 partnerships involving English districts where management is shared. Most of these were established after 2010.

It is less common for county councils to be involved in shared services, though partnerships exist for individual services. Devon and Somerset run a joint trading standards department with Torbay Council and Hampshire provides HR and payroll services for Oxfordshire and three London boroughs. Essex shared a chief executive with Brentwood District Council until six years ago. Brentwood now shares some services with Basildon, another district. Oxfordshire County Council and Cherwell District Council have shared a chief executive since October 2018.

Shared services in large urban areas are also uncommon. The tri-borough partnership in London involving joint delivery of adult social care, children’s services and public health ended in 2017, although elements remain between two of the partners (see practice example).

It’s not all about money

Sharing services can help local authorities to save money through economies of scale, less duplication and increased purchasing power. However, there are wider benefits, including:

  • Recruitment of more experienced staff
  • Redesign of services with improved working practices
  • New commercial solutions

Since merging departments between 2010 and 2016, Suffolk Coastal and Waveney councils have sometimes recruited more specialist and experienced staff. These include a full-time conservation officer and a head of communities, whose salary is partly paid by the local clinical commissioning group.

It is important for councils to have integrated policies, including shared customer service standards, so the joint organisation functions effectively. Staffordshire Moorlands and High Peak have been sharing services for 10 years, even though they are in different counties. The fact that each has similar geography and centres of population makes such an arrangement logical as well as effective, according to its chief executive. Rather than split each service department, the authorities chose a single base, or hub, for each function.

What have councils learned?

Retain council sovereignty

Some shared arrangements struggle to get going because of fears that one council will be dominated, or swallowed up, by the other. It is not unheard of for councillors to claim that senior managers spend too much time in the partner authority rather than their own and use such squabbles for political ends.

But by and large there seem to be few major disputes between councillors (or for that matter officers) about how much time or energy is devoted to each authority. In some cases, it may be an equal split, but not always. For example, in Adur and Worthing, Worthing Council pays 60 per cent of running costs and therefore expects its residents to receive a similar proportion of services.

Unless there is a merger to form a single local authority, staff in councils with shared management will generally hold a contract with one council or the other. Yet shared management must carry the support of employees from each authority, with the culture of the two councils reflecting the shared approach.

Working with elected members

Local authorities that share services must be aware that practices in each council may be different. Chief executives must be impartial in dealing with the leaders of each council, and it helps if individuals get along socially.

New styles of leadership

Chief executives and other senior staff are advised to adopt a shared, not a directive, style of leadership, according to one shared services training expert.

To some extent, council leaders may see themselves as having less power than before, as they share a chief executive and other managers. Also, depending on the structure at each council, individual managers could end up with a less senior post in one authority than the other.

Another expert said that senior staff and councillors should use an “adaptive” style of leadership. This can be a challenge when recruiting staff, as people coming from councils without any history of partnership working may take time to get used to the shared approach.

Must it mean merger?

No. There is no reason why councils that share services, or even management teams, should merge. The Cities and Local Government Devolution Act 2016, which created the framework for combined authorities, made it easier for councils to merge. The creation of Somerset West and Taunton Council will, say the existing councils, save at least £500,000 per year. But not all councils that share services and management teams wish to merge. In the case of those in different counties, it would be tricky if not impossible. However, it often boils down to the size of each authority, local geography and the will of elected members and officers.

What is the future?

While shared procurement may be the most productive form of shared service arrangement from a financial perspective, it does not realise all the benefits that can stem from sharing back office functions. In some cases, as one director observes, shared management with fully merged departments may lead to councils “punching above their weight”, able to recruit more experienced staff for posts or services that might otherwise be unviable.

Where sharing leads to new solutions and better services, it is unlikely that many residents are going to object. Staff may also welcome the opportunity of working flexibly, as well as experiencing life in more than one organisation.

Read more in CYP Now's Shared Services Special Report

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