Service delivery: a shared concern for councils?

Shared services are on the agenda for Scottish local authorities. Jackie McGuire looks at the collaborative progress being made in the drive for efficiency savings.

In the current economic climate, shared services – which is essentially a generic term covering everything from collaborative working between authorities to wholesale outsourcing of service delivery – are being held up as one of a number of measures that public bodies ought to be considering as a means of cutting costs.

Having been slower to embrace the concept of shared services than their English counterparts, Scottish local authorities are now looking at available options with renewed enthusiasm. A report commissioned by the eight Clyde Valley councils, which include Glasgow City and North Lanarkshire Councils, urged councils to adopt models of integrated service delivery in certain key areas over the next five years.

The report, issued by a committee chaired by Sir John Arbuthnott, recommended that the areas in question should include roads maintenance, back office, and waste management. In terms of waste management the report recommended sharing use of a waste treatment facility, joint recycling arrangements, and looking at government funding for a Clyde Valley-wide solution for non-recyclable waste.

Arbuthnott points to the fact that the eight councils spend sums approaching £155M per annum on, and employ a total of 1,400 FTE operatives in, waste management services, and that achieving 10% efficiency savings in this area would deliver significant financial benefits. The question is whether shared services can deliver those efficiencies, and whether Scottish local authorities, including the Clyde Valley councils, are up for the challenge.

Too far down the line
Glasgow City Council, which had earlier embarked on the procurement of a long-term contract for the provision of residual waste treatment had proceeded too far with the procurement exercise to pull back in the light of the report. North Lanarkshire Council has indicated that it will review its proposed strategy. Scope for collaborative working between Scottish local authorities has been impacted upon by the number of single authority waste management projects that are under way. The pan Ayrshire initiative, and the open-minded approach that has been observed at North Lanarkshire suggest that all is not lost.

Brodies LLP recently commissioned an Ipsos MORI survey, the results of which suggest that there may well be additional scope for shared services in waste management, including more outsourcing to the private sector. The survey of Scottish local authority chief executives and senior finance officers indicates that collaboration on waste management is already relatively common in Scotland.

Around 38% of those interviewed indicated that their authority already collaborated in waste management services, while 15% collaborated in the provision of refuse collection services. The report also indicates that in future there will be more collaboration. Some 15% of those interviewed indicate that at present they outsource 15% of waste management to the private sector, with 31% indicating that they are considering outsourcing these services. According to the survey these figures suggest that waste management services are more likely to be outsourced than other services.

In general the figures tend to suggest that if the private sector can deliver efficiency savings then Scottish local authorities are quite prepared to engage their services. One of the biggest perceived barriers to outsourcing is a general concern about loss of openness and accountability.

A well defined service specification accompanied by a good contract will go a long way to resolving that issue, but so too will strong performances on the part of contractors, and good contract management by an intelligent client.

Jackie McGuire is head of the public sector services group at Brodies LLP

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