Local authorities need to put shared services at the heart of their plans in delivering the £83bn public spending cuts to be announced by the Chancellor in his comprehensive spending review announcement this week.

As local councils and government departments brace themselves for budget cuts of up to 25%, sector experts at law firm Browne Jacobson believe significant savings could be achieved by local authorities simply working closer together in sharing both back office functions and front line services.

Research commissioned by the firm recently showed that some senior public sector managers believed up to 12% of their budgets could potentially be saved by sharing services.

Dominic Swift, head of the public sector team at Browne Jacobson, commented: 

"Sharing services is one of the options that local authorities should be seriously looking at when they decide how best to manage the cuts they will soon be asked to make. Significant savings can be achieved, especially if councils look at the opportunities to merge both back office and front line services."

Traditionally, shared services have focused on back office functions with Browne Jacobson's own survey of 178 senior public sector managers showing that less than half were looking at front line services.

The firm's survey also revealed that two thirds of public sector managers (65%) were concerned about a lack of financial resources, while 59% identified insufficient manpower as key barriers to implementing shared services. More than half of managers (53%) questioned also stated workforce opposition as a major obstacle.

But according to Dominic Swift attitudes are changing and he cites the Lichfield and Tamworth Refuse Collection Partnership as an example of how front line services can be successfully shared and major barriers overcome.

The combined cost of the waste collection service provided by Lichfield District Council and Tamworth Borough Council was in excess of £4m a year before the two councils formally merged their operations earlier this year. As a direct result of joining forces the new partnership is expected to make more than £3m in savings over the next five years.

Swift added: 

"This example shows that when councils truly work together real financial savings and service improvements can be achieved without the need to establish complex arrangements or employ significant resources at the outset. Neither of these authorities could have achieved these levels of savings and innovation in service delivery in isolation. It is the type of partnership approach other councils could very easily emulate.

"It also proves that some of the major barriers to shared services that existed two years ago are being overcome. With any efficiency programme it is important that managers stress the benefits of shared services, particularly to front line staff, who need to appreciate that in order to deliver 'more for less' greater innovation and local collaboration has to be key."

Andrew Barratt of Tamworth Borough Council commented:

"Having clear priority and commitment at the highest political and management level from both authorities was a critical part of delivering the joint service project and this support enabled all elements identified in the proof of concept study be delivered, both within a very tight timescale and achieving the anticipated efficiencies."

Keith Gordon of Improvement and Efficiency West Midlands (IEWM) added:

"The days where control lay within one Council and the risks with the private sector have long since gone. If Councils wish to flourish and continue to respond to customers needs in this new challenging financial environment, they will need to develop partnerships and new operating models both with other the public sector organisations and equally importantly with the private sector that put customers at the forefront of the agenda."

A copy of the research conducted by Browne Jacobson in 2008 can be accessed by going to www.brownejacobson.com/sharedservices

For more information about Browne Jacobson, please visit their website here: www.brownejacobson.co.uk