Addressing regional inequalities
Andrew Borland, Chief Innovation Officer at the Virtual Engineering Centre (VEC), University of Liverpool discusses the importance of levelling up for growth.
Don’t bottle out of sharing
Since the advent of Gershon, we have seen much activity in local government setting up joint purchasing agreements, streamlining processes and cutting back-office admin staff – all of which has taken much of our political and managerial energy.
But next on the agenda is the challenge of coming up with longer-term savings by sharing ever-more services, using transformational IT, and finding new ways of working. This will require even more vision, innovation and determination.
The momentum must not be at the expense of missing out on further quick wins. We must avoid the temptation to find an efficiency and then stop. And we must continually broaden the search for operational efficiency from the parts not reached yet, even if our formal Gershon target has been reached.
There are areas, however, where savings have reached a plateau, and this inevitably leads to consideration of new approaches, such as adopting shared services.
The list of possibilities is endless. For example, for HR, we are all introducing self-service, but should we also look at sharing HR advice with LSP partners and other boroughs? And how about energy procurement? All councils have saved considerable sums by better procurement, but are we all looking to pool our procurement capacity and systems to deliver better and faster intelligence, and even greater economy?
Sharing services can take different forms, such as centralising within an organisation, collaborating with others, and sourcing internally or through the market. Sometimes such arrangements are primarily to continue what you are doing more cheaply, and occasionally, it is more a commercial opportunity to provide services to others. There are, of course, obstacles – agreeing common specifications, differing performance and resources deployed, synchronising decision-making cycles between departments or organisations, overcoming fears about loss of direct control, and investing up front to deliver savings later on.
But in a world where local authorities are increasingly enablers to deliver community aspirations through engagement and partnership, it does not feel as strategically important for each council to need its own finance or legal departments to close the books or write contracts.
Or put another way, local authorities are about elected councillors making priorities for their area, but surely groups of authorities could share their back-office functions that are not so directly important to building a sense of place?
There are examples which pre-date the Gershon agenda. Barking and Dagenham – together with three of its neighbours – has let a contract to radically improve waste disposal, recycling and diverting more waste from landfill.
In other respects, the four boroughs are sovereign, but the shared team and expertise we employ for this contract far exceed anything we could achieve individually.
In London, the regional centre of excellence is creating the conditions for collaboration through research, benchmarking and testing, and supporting many joint borough projects.
But still the spread of framework agreements, information-sharing and smarter common processes outweigh organisations bringing in shared services.
Potentially, the flexibility afforded to local government to collaborate means that real local choice can be exercised.
But this needs to be a reality, or the arguments for prescription and reorganisation – even with the loss of flexibility – will seem more appealing to central government.
Local accountability and the ability to redirect efficiency savings into priorities is local government’s strength, and certainly appears more attractive than the one-size-fits-all health system.
Maturing the Gershon agenda to share services is an opportunity too good to miss in the years ahead. w
Rob Whiteman is chief executive of Barking & Dagenham LBC
