Don’t diss the districts

January 4, 2007

Chris Lesie, Director, NLGN
Guardian Public

Shared services are currently one of the main topics of conversations across the public sector, particularly as local government looks to tighten its belt and deliver the savings expected by Gershon and CSR07. Yet the results of these ventures can be imprecise and variable, with relatively few clear cut successes to date. NLGN’s forthcoming research paper, The Politics of Shared Services, outlines the underlying political and cultural obstacles that these projects face, on top of those that come with any large-scale business change. The report will show that while many are positive about this agenda there are significant challenges and a few myths about shared services which need tackling.

In two-tier authority areas, District Councils considering shared services have their own specific issues. For example, many Districts have less exposure to the private sector partnerships, outsourced service provision and arms-length control systems that shared services can require. Districts can also lack the funds and resource for large-scale change. Nevertheless, District Councils are increasingly recognising the potential savings achievable from shared services and are engaging enthusiastically with the agenda. But, if this arm of the local state is disengaging from direct service provision, acting instead as a enabling agent for citizens and services, are the current local government structures now necessary or appropriate? For example, if revenues and benefits and being delivered from a semi-independent shared services facility, a large proportion of a District Council‘s function is removed from its direct control. Some District Councils see this as a threat to their status or independence and are subsequently avoiding sharing services, particularly with their larger neighbours. Others are consequently embracing it in a cleverly enthusiastic way, teaming up with other District Council’s to stave off the geographic amalgamation of services at a county or regional level.

This is an interesting strategy, arguably delivering the economies of scale of larger or unitary councils and allowing District Councils to focus on their higher political priorities and more pressing local community needs. However, this could be seen as little more than a short-term strategy to avoid the difficult downstream questions about structures. A strategy based on tactically fencing-off cohorts of common interest rather than maximising the potential of shared services for meeting citizen needs is not necessarily constructive in the long-term. A change of perspective is needed.

A core argument for retaining small District Councils is their close proximity and responsiveness to community interests. The sharing of core service activities between District Councils will test this argument. District Councillors must now prove that there remains a need for a small-scale client function. This argument must develop to show that the added-value Districts offer beyond direct service provision justify their independence and that a change in these structures would sacrifice the benefits they currently bring.

This echoes the tensions that often surface in the polarised argument between localists and Gershonists – whether there is a mutual exclusivity between tailored, customer-oriented services and those who want to squeeze efficiencies and productivity from service provision structures. At NLGN, we believe that these are not mutually exclusive goals. Exploring the component parts of service production repeatedly demonstrates that joint-working can be beneficial in many areas, though there remain other elements where local and face-to-face transactions cannot be eliminated. In fact, these personal relationships should be enhanced and prioritised in some areas and shared services in certain services should free councils, councillors and resources to do just this.

Shared services should not only be the preserve of those wanting to reduce the tax base, they should allow resources to be freed for reinvestment in the higher quality, intensive end of local delivery which will really impact on the lives of the people that need it.


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