Scottish Councils consider £155m shared services plan

Seven Scottish councils have published a business plan for sharing back office services, including IT, in a bid to make £30 million in annual savings.

The Clyde Valley councils looking into the £155 million-plan include East Renfrewshire, West Dunbartonshire, East Dunbartonshire, Inverclyde, Renfrewshire, Glasgow and North Lanarkshire councils.

By sharing support services of IT, finance, payroll, HR and revenues and benefits, the councils hope to achieve up to £30 million a year in savings after the first five years, rising to more than £34 million after 10 years.

Around 60 percent of the savings would be achieved through the back office sharing, while the remainder would be delivered by sharing more professional and specialist parts of council services.

“The [shared services] model allows us to improve our processes, increase our economies of scale, and pool our resources to invest in modern, proven IT solutions that help simplify, standardise and automate manual processes.

“It will reduce duplication in the procurement of IT solutions, reduce infrastructure costs and allow us to provide more online services to our staff and customers,” Lorraine McMillan and John Mundell, chief executives of East Renfrewshire and Inverclyde Council, respectively, wrote in the introduction to the business plan.

There are currently 552 IT professionals employed across the Clyde Valley councils, with IT costing a total of £58.4 million.

East Renfrewshire and Inverclyde councils are leading the development of the support services workstream, while other councils are developing business cases for waste management, health and social care and social transport.

Councillor Jim Fletcher, leader of East Renfrewshire Council, said: “[The shared services business case] presents significant financial savings for the councils involved that will continue to help protect essential frontline services and jobs.

“Each council taking part would benefit directly from the shared support services proposals and the more councils involved, the greater the savings for each council.”

If the business plan is agreed, the new shared service will operate as a public body owned by the participating councils. A management team will also be appointed to manage the transfer of services.

If all seven councils take part in the agreement, between 2,000 and 3,400 staff could be transferred to the new organisation.

The shared services proposal will be presented to councils towards the end of the month, with councils expected to indicate their involvement by the end of September 2011.

Other councils and public bodies will also be able to join the shared services agreement at a later date.

Public sector IT managers' organisation Socitm recently welcomed the shared services recommendations of the McClelland Review of public sector IT infrastructure in Scotland, and pledged support for the recommendations.

Copyright © 2011 IDG Communications, Inc.

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