Elected member workshop
- 1. Shared Services Elected Member Workshop 8 November 2010 Introduction On 8 November, an invited group of Leaders and Lead Portfolio Holders participated in a half-day facilitated action-learning style workshop focusing on the future of shared services – building on the most successful and/or innovative examples of emerging thinking and practice both within the Local Authority family (across areas and tiers) and outside of it (across partnerships). Those attending the workshop, (the majority of whom already had experience in this area of work), wanted to take stock of progress and learn from each other as well as to consider the support needs of the wider sector. The group’s initial take on the issues that needed to be explored included how to help build partnerships between districts and counties; how to engage the wider public sector; and arrangements for governance and accountability. Other objectives for the session included feeding the output from the session into the shared services workstream; pushing the profile of this work - “being big, loud and bold”; and identifying barriers and blocks to change and how to overcome them, including what not to do. The importance of making connections to other related areas of work was recognised; and in particular, the work one of the other Productivity workstreams is leading on in relation to ’shaping markets and new models for service delivery’, (e.g. looking at employee owned, mutual and social enterprises). It was also felt to be important in discussions about governance and accountability to take account of the changing partnership working landscape (both in relation to existing entities such as Local Strategic Partnerships and also new entities such as Local Enterprise Partnerships). Similarly, the implications of ‘Community Budgets’ and the ‘Local Integrated Services’ pilots would also be relevant to shared services and would therefore need to be considered. There was also some interest in using this ‘group’ as a “voice for the workstream” Page 1 of 7
- 2. Rationale for sharing services: While it is expected that sharing services will yield substantial savings over time the “real benefit” and one that it is important to communicate is improved services Experience: There was a mix of experience amongst participants – for some this was the “start of an exploration”, for others this was an opportunity to build on existing practice. Amongst those present there was a range of experience of different shared services ‘models’ - such as shared CEO and management teams, (in some cases between councils of different political control); and collaboration with other parts of the public sector including integrating health and social care with the NHS (e.g. via joint strategic commissioning) Some emerging ‘models’: There are a range of approaches to service delivery that can be explored and there was interest in these, and as indicated above, in making connections to the “new models” workstream. For example: • Shared commissioning between councils e.g. Hammersmith & Fulham, Westminster and Kensington & Chelsea • Taking account of aspirations to move things closer to communities and neighbourhoods (e.g. Cambridgeshire and Swindon) • Moving towards a ‘one public sector model’ e.g. Swindon is looking at one HR team for the whole of Swindon • Creating a shared business platform e.g. Cambridgeshire and Northamptonshire • Social enterprises and working with partners to wrap the service around the person – e.g. Swindon • Mid Suffolk along with Babergh DC and Ipswich BC have joined to start a Shared Revenue Partnership as from April 2011 and are actively looking for a fourth partner Shared Management across councils: An increasing number of councils are, or are considering, moving to shared CEO and shared management arrangements. For example: • Vale of White Horse District now have shared management below the top four tiers (with South Oxfordshire) • Mid Suffolk are heading towards a full merger – including political sovereignty with one of their neighbouring districts (by April 2013) Page 2 of 7
- 3. Learning about how to make shared services work (success factors) There were a lot of lessons that people were able to share. The dominant themes were the importance of leadership from the top, good working relationships based on trust and a shared strategic vision; building political support within the administration and amongst non-executive members; and having a robust focus on change management. Merging top teams, early in the process helps provide strong leadership and avoids the potential conflict of interest that might arise if separate teams were in place. With clear political and managerial leadership it becomes possible to focus on change management i.e. how to get from where we are to where we want to be and how we embed the change. There are several aspects to this. One is the appointment process, which has to be on the basis that the best person gets the job, but all parties need to be sensitive to the fact that this can lead to a disproportionate number of people from one authority being appointed which can, in turn, lead to concerns about a “takeover” rather than a joint endeavour. Not surprisingly perhaps this seems to be more of a concern to those that are sharing with a larger authority. For the same reason it was observed that sharing at the same tier was often easier than across tiers – although the similarity of services also plays a part. Change management also involves building deeper commitment across organisations otherwise the deal could unravel if, for example, there is a change in Leader or in political control. At the same time there needs to be a “human” fit between the organisations, so an important part of this commitment building is about relationships. The Leaders of South Holland, Breckland and South Hams all said that good working relationships had been key in terms of enabling them to be more ambitious with their plans. In practical terms changes to shared management and services may be a ‘one way street’ because of the costs of unpicking it. However it will probably be helpful in winning support to show that in theory a deal could be unpicked if needs be (i.e. there is an exit strategy). In the end we need to accept however, that we’re entering new territory, where there are lots of unknowns and some of the new successful ways of working that will emerge won’t all be planned in advance. Engaging members rather than officers in what could work has the dual benefit of helping to build support and ensuring that decisions are not affected by people’s personal concerns about their careers. It’s worth trying to achieve “quick wins” too that demonstrate the benefits and thereby help to win hearts and minds (including non-executive members). Moving to a shared CEO and ‘Top Team’ was identified as one such “quick win”. Another good way to win hearts and minds (in that it can help build both experience and support) is to start with the non-politically sensitive services first (i.e. don’t start with services like planning!). Page 3 of 7
- 4. Those present highlighted the benefits of ensuring that Scrutiny plays a key role. For example, Cambridgeshire and Northamptonshire used a joint scrutiny committee to examine all of the services in scope for sharing to assess which of the two councils was the strongest performer for each and based their recommendations on who should provide what on this. Other learning points that were raised were: • We must profile the expected savings over time • It may be better in some circumstances to outsource the service on a joint basis • Some services benefit from centralisation, where it is possible to gain economies of scale (e.g. back-office) others need to be personalised and devolved to as close to the user as possible. • Be careful about language e.g. what is meant by “senior managers” – it could mean just the ‘top team’ to one Leader/CEO, but the top three tiers to another. It would be helpful to agree a common set of definitions. Barriers and Burdens/Blocks to change The main barriers related to issues of governance and accountability, including both real and perceived threats to the sovereignty of members (and sometimes officers) to determine what happens in their area. There is therefore a related issue of engaging and taking non-executive members with you. There are also technical issues notably about: • IT – lack of compatible systems. However there was also a view that whilst it’s helpful to have IT in common we shouldn’t allow it to get in the way of doing things – it can always be brought into line later. (Of course this in part depends on the services concerned). • Conflicting legal advise about new joint entities.1 Profiling savings can be a problem. Often it is necessary to spend money up front to gain the benefits later – ‘invest to save’ (examples were given from 1 Councils considering a ‘joint venture’ model should read the Treasury’s guidance note - Joint Ventures: a guidance note for public sector bodies forming joint ventures with the private sector, HM Treasury March 2010. The Treasury notes that this approach is particularly relevant for entering into arrangements with the private sector. The Treasury highlights that the approach is valid when ‘parties have complementary objectives and share a view of the nature and scope of its activities and the JV’s longer term objectives and benefits’. European Procurement rules will normally apply, but where the joint venture is entirely controlled by public sector entities, there is within ECJ Case Law an exemption from the public procurement rules known as the Teckal exemption. However, the exemption is narrowly construed and: • Authorities need to have the same control over the joint venture as they do over their own departments; and • The joint venture must be supplying its services to the controlling authorities. Some Local Authorities have opted for a Member Committee model instead of a Joint Venture model (to avoid any legal ambiguity). Page 4 of 7
- 5. Cambridgeshire and in some of the background papers from Herefordshire). This is likely to be particularly problematic at a time when funding and resources are being reduced. In terms of choosing which areas of provision to share there were different views. There was a general consensus that you can “do what you like” with the Back Office services, as there would be little political or public opposition (and there were gains to be made from centralising/standardising many such services - economies of scale). However savings, (and indeed improvements in provision), are usually much greater in Front Office services, but these are a lot more sensitive and also raise issues of centralisation versus localism and personalisation. It is in this area – focusing on users and outcomes that the benefits of collaboration with partners can be greatest but, as the group discussed, there are considerable governance challenges to be overcome. The group decided to work in two sub-groups on two important issues: • Governance and accountability (including keeping non-executive members engaged and cross public sector working); and, • Two tier working Governance and accountability Since members continue to be politically accountable they need to feel that while services may be shared, they retain the right to determine policy, hold providers to account and gain redress for their constituents. The key question therefore was how to make this work when services are shared, what changes do you need to make? The key elements of what participants felt good governance might look like in this situation included: • Some joint Cabinet meetings (informal and formal) • Joint and separate Scrutiny of the services; including allowing call in on any part of what’s being done • Some joint Council meetings • Joint Management Teams These structures need to be supported by: • Clear communications and informal briefings after every Cabinet Meeting for members and officers alike • Good cost and performance information, with clear standards e.g. set in terms of outputs. It was recognised that different authorities could contract for different levels of service and this could be paid for and assessed accordingly. It was also felt that benchmarking performance against what is considered good performance would help assess how well a service was being delivered. While governance and accountability for the performance of services shared between local authorities is important, it is also vital to focus on “wrapping services” around the customer and collaborating across the public sector to do so. Total place demonstrated that this is central to users’ experience of public services and is where there are big savings to be made. Page 5 of 7
- 6. Those present acknowledged that both the Health and Policing reforms would add to the complexity (e.g. engaging with GPs and the introduction of directly elected Police and Crime Commissioners). Governance arrangements across a range of public service providers will be needed to manage collaboration such as that proposed for Community (Placed-Based) Budgeting, and this needs to be developed as soon as possible. (However, Local Government needs to ’hold the ring’ as they have the democratic mandate.) While good structures and processes are helpful, cultural elements will always play a central role in how collaboration works and it is important to use the opportunities that arise from the kinds of structures and processes outlined here to build trust between those involved. Two tier working This could involve district to district as well as district to county and might involve use of parish/town councils and working alongside other local partners such as GPs. As outlined above the biggest issue vis-à-vis district to district sharing is the issue of sovereignty, (technical issues are a “lesser concern”), and in relation to district to county sharing it is of districts feeling that they are being treated as “second class citizens”. Ways of overcoming this were felt to be to start with areas of “low political flack” such as HR or Legal and not to rule out the possibility of a district taking on some of the county services where it makes sense to do so, (e.g. possibly Trading Standards), in order to build trust and stronger working relationships. Sharing between upper tier authorities is more straightforward but still needs attention to be paid to governance arrangements. For example Cambridgeshire have somewhat mitigated concerns about their arrangements with Northamptonshire by strengthening the role Scrutiny has played in their process. Going forward… Developing the initial business case: It was felt best not to rule things out but rather to put everything in the ‘melting pot’ and to seek to make decisions vis-à-vis what to share on sound business rationale, not politics. Some thoughts about sensible approaches at this stage were: • Cabinet/MT agree the final overall business case/options • Develop a basic service specification service by service • Develop trading, commissioning, procurement and income models • Don’t just consider one approach e.g. outsourcing to the private sector when it may be more appropriate to look at opportunities to outsource to each other, or to new social enterprises etc Page 6 of 7
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