Shared services could save councils millions, says LGA

Analysis by the Local Government Association has predicted that local authorities will save hundreds of millions of pounds over the next decade through collaborative working such as sharing chief executives, merging back offices and joint procurement. The LGA said that it has identified more than 200 shared services projects either already running or under consideration, with some individual projects saving in excess of £3m annually. Local authorities are actively examining different ways of saving money due to the substantial cuts to their budgets, said the association. However, it warned that because budget cuts are "heavily frontloaded", many of the projects will not be implemented in time to help minimise the short-term impact on frontline services. According to the LGA, the predicted savings from the 200 shared services initiatives that it has identified are in addition to various measures already introduced by councils which delivered a total of £3bn worth of savings between 2005 and 2008 and £1.7bn in 2008-09. Its figures for 2009-10 suggest that local authorities made efficiency savings equivalent to around £4.8m each day. The association's analysis also identified a number of individual councils that have or will make substantial savings through collaborative projects. These include Nottingham and Leicestershire councils, which are expected to generate savings of £2m annually through sharing HR, payroll and finance services; East Lindsey and South Holland district councils, with predicted savings of more than £30m over the next 10 years through merging five back office functions; and both North and North East Lincolnshire councils, which have jointly saved more than £1.4m since 2006 through joint procurement of items such as telecoms equipment. David Parsons, improvement board chairman at the Local Government Group, said: "Our analysis reveals a number of impressive and innovative ways that councils are sharing services and saving millions of pounds. The measures we have identified won't be appropriate in every local authority. Every council has a different structure and residents needs vary from location to location. However, the thinking behind them can be used across the sector to identify and evaluate opportunities." The group launched a shared services and management guide on 22 March, setting out how councils can approach the issue. This article is published by Guardian Professional. For updates on public sector IT, join the Government Computing Network here.