Midlands councils to save £1m each through shared services

Nottingham City Council and Leicestershire County Council are investing in a shared services project which will eventually see finance, payroll and human resources all being shared.

Nottingham is replacing its IT systems to aid sharing the services. The systems were about to be unsupported and in need of replacing, but the spend attracted criticism from local press, which portrayed the move as wasteful expenditure “typical of the public sector”. Nottingham CC’s Chief Executive Carole Mills-Evans said: “The extra money being invested up-front in this innovative project … reflects the councils’ ability to make good, sensible decisions to expand the scope of the project as it develops so that it is fit for purpose.”

Going forward the shared services will see £2m of savings across the two councils, who appointed a head of shared services last Summer. Mills-Evans added: “By broadening the scope of the project, we have built in the option to expand it to include other councils – reaping further public sector savings.”

A recent study from the Local Government Association and Localis found that sharing a chief executive had resulted in £3.5m-worth of savings over three years for one council, and laid out recommendations for councils looking at sharing the function.

Alex Thomson, Chief Executive of Localis, commented: “In these tight financial times, the public sector needs to think creatively about how it operates in order to extract maximum value for taxpayers. Local government has long been in the vanguard of developing innovative approaches to public service delivery, including sharing staff between organisations. Whilst shared management is not a panacea, it has been, and can be, very successful in certain areas.”