Shared services saving councils millions

Although shared services are saving councils money, it is not enough to make up for the cuts to local government funding, according to a new report from the Local Government Association.

Services shared: Costs spared provides provides the first detailed analysis of five shared service arrangements. In total the five saved £30m across the lifetime of the arrangement, which includes sharing back office functions and working together to deliver frontline services.

However, the report found that while councils are achieving significant savings through shared services, it falls short of matching the 28% cut in local government funding over the current spending review period.

The report, produced by Drummond MacFarlane for the LGA, also found that the set-up costs for merging services is cost-effective and has less than a two-year payback period. Shared services have also provided the same or better levels of performance and benefit from wider business transformation such as improved use of IT and assets.

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