Shared ServicesA private sector perspective

Geraint Williams, Strategy Manager, BT Education and Local Government

North West Centre of Excellence Stakeholder Event – 8th June 2005

Interpreting the Gershon agenda

Drivers Opportunities

• Transactional Services

• Frontline services

• Corporate services (Back Office)

• Procurement

BT direction of travel LG direction of travel

Shared Service

s

• 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-AuthorityDemand from 2+

LAs is aggregated and procured

Revenues & Benefits

Local Authority to Local Authority

LAs sell services to other LAs

ICT Services

Inter-Agency2+ agencies

aggregate demand to procure

Local Authority and Primary Care

Trusts

Intra-AuthoritySharing 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 CountyCouncil

Mid-Suffolk DistrictCouncil

Other DCs Other DCs Other DCs Other DCs Other DCs

# of councils

Tot

al C

ost o

f sha

ring

serv

ices

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 models Local 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-change

QualityCost

Value for MoneyPublic Value

(SMEs, Economic Regeneration, Social Inclusion)

EITHER OR

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

Partners Commercial Constructs Engagement (at different levels)

Application (i.e. R&B)

Theme Partner

Agency / Private Sector

Function (e.g HR) Private sector

Shared Services Partnerships

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

Governance Local Authorities

Constructs & Partners

Reputation LAs /Public Services

Trust Voluntary 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 VALUESHAREHOLDER

VALUE

How do you reconcile the two?

Build on previous learning experiences to bind together both requirements – vision, leadership,

detail

Thank you

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