Glenn Hammons on LGSS, local authority clients and thinking differently

Glenn Hammons is head of corporate finance at Local Government Shared Services, the shared service between Cambridgeshire and Northamptonshire County Councils.

Room 151: Can you tell us about your role in LGSS and across the four client councils you support?

Glenn Hammons: Two years ago with the creation of LGSS I became its head of corporate finance. LGSS is a shared service across Northamptonshire and Cambridgeshire County Councils so I was responsible for a range of similar functions across the two counties. Then 12 months ago as LGSS started to take on new clients I was appointed to be East Northamptonshire’s Section 151 Officer, then six months ago Norwich City Council joined the team as well. So the role has dramatically expanded and throughout that time I have been responsible for the full range of corporate finance activities including treasury management and pensions. I’m also deputy 151 at Northamptonshire County Council too. The LGSS deputy head of corporate finance, Caroline Ryba, is Section 151 at Norwich City Council and deputy Section 151 at Cambridgeshire. It’s a unique position for a local government finance officer to have responsibility over county and district functions. I get to see it from both sides and often end up
arguing with myself!

Room 151: Is there anyone else who manages finance in as many councils as you
do?

GH: Not that I am aware of. But it is all part of the changing face of local government. There is less resource out there so you have to work differently. It is only a matter of time before others are doing similar things. The plan is that over time LGSS will expand further to take on further services and councils. As I am the head of service it is up to me to make sure that treasury management works properly across all of those four councils.

Room 151: How do you run treasury management across the four councils?

GH: We have a bespoke policy for each council because each council’s capital investment position and risk appetite is different. Levels of cash are different, investments are also different. We work on the basis that we try and get as much consistency as possible across the councils’ TMS. We try and make sure that the “base of the cake”, as it were, is the same, but we recognise that we need to tailor each strategy, “the icing on the top” according to each council’s risk appetite and unique local issues. It is quite a balancing act to pull off but certainly from the feedback that we have been receiving we seem to be achieving it.

Room 151: What is the base bit of the cake?

GH: There are different strands, one is making sure that the treasury team managing strategies for all of the councils (that’s one team managed through one line management route) is building best practice across all the councils to drive efficiencies and promote the best bits of all the councils and roll them out. So in terms of people we’re using the skills and knowledge that has been built up to apply the generic aspects of the treasury management strategies.

In terms of the types of investments the authorities are doing, in Cambridgeshire there were a number of money market fund investments. In Northamptonshire there wasn’t, so we have been able to take the learning from Cambridgeshire and apply that to Northamptonshire so that there is a common suite of money market funds and one team working with them and making the investment decisions on behalf of both authorities. We have a relatively small number of funds that we tap into at any time. The counter to that is within Northamptonshire where there was a lot of work that had been done on proactively managing the debt portfolio, taking on different loans than just the traditional PWLB. We’ve used that knowledge and applied it to the Cambridgeshire side of the portfolio. Last year we explored the potential of bond financing. That didn’t quite happen at the end of the day, the price of the bond increased to above where PWLB was so it wasn’t the best answer to the problem. But the background, the work, achieving credit rating etc, that was all done and if the market changes we could tap into it in the future. Cambridgeshire now has a credit rating.

Room 151: How big is the team?
GH: People doing treasury day-in-day-out are four, supporting two county councils and Norwich. The majority of the team is at Northampton but we have a member of staff with responsibility for treasury management in Norwich.

Room 151: Is it difficult to manage?

GH: It is certainly a challenge! Particularly in terms of balancing all of the workloads and understanding each of the client’s needs. Then there are all the other functions within the team (pensions, financial strategy, monitoring & control, financial reporting, capital) and managing all that is challenging just in
one organisation but trying to do it across a number of organisations adds to the complexity.
But you have to change the local government mindset. I have been concentrating on this over the last 18 months within my team. Traditionally you provide services to one council but you have to change and think about it across a number of clients. You have to get people to work differently, think differently,
share what they know, create the best way of doing things to go forward. It is rewarding although it is challenging.

Room 151: There is this interesting debate on how much is too much for shared services. What do you think? Is LGSS planning to take on more councils?

GH: The strategy is to take more on. But we recognise that over time there will be changes to the structure of how things are managed. We are future-proofing the structure moving forward so that when more authorities come onboard we can adjust so that service levels aren’t compromised. As you will have seen from recent press releases it is highly likely that from April we will have Northampton Borough Council joining LGSS. They’re the biggest borough council in the country and there should be savings of almost £10m over the next five years.

Room 151: Is future-proofing going on now?

GH: Yes, it has been going on since the creation of LGSS. The main aspects I have focused on is making sure that the team can work in the new world: dealing with multiple clients and getting as much of the the service offering the same then creating the bespoke elements as each council needs require.

Room 151: What other ways of working across the councils are similar?

GH: To be honest we have integrated the whole way the teams on treasury and pensions investment work. We have a pensions team working out of Northampton supporting both the Northamptonshire and Cambridgeshire pension funds. They work in a similar environment where they work closely with their pension services colleagues, the members on the pensions board/ committee, the advisers and the fund managers. We also have integrated and jointly managed teams for financial strategy, monitoring & control, financial reporting, capital and projects.

Room 151: How much do you think LGSS has saved across the councils since creation in October 2010?

GH: Since its launch, LGSS has continued to grow to a business worth over £83m providing best-practice professional and transactional services to organisations across the public sector. As well as achieving £11m banked savings in less than two years through LGSS which feed through to sustain front line citizen services, the two founding councils have also benefitted from improved quality of services and a much broader pool of people with whom to deliver service improvements.