PLC Public Sector reports:
Recent press reports about Slough Borough Council’s decision to pull out of its proposed shared services partnership with Cambridgeshire and Northamptonshire County Councils highlights the difficulty in bringing a shared services project to fruition.
However, a close review of the underlying papers also reveals why action is needed by whoever wins the General Election to give local authorities the power and confidence to use the power of well-being (or introduce an alternative such as the proposal for a power of general competence put forward recently by the Local Government Association).
Northamptonshire County Council’s cabinet paper in support of the shared services project makes it clear that the preferred method for delivering the shared services project was the creation of a joint venture organisation wholly-owned by the partner authorities – “by Local Government, for Local Government”. However, the paper goes on to state that following the LAML decision:
“Leading Counsel has advised that the proposal to establish a company for the provision of support services is unlikely to be regarded as meeting this test and therefore would be unlawful.”
In light of this advice, the recommended way forward is for the authorities to establish a joint committee to deliver the project with the longer term aspiration that, following the necessary changes in law, a separate, publicly-owned joint venture company be set up.
A closer review of the paper highlights the various benefits the authorities can expect to receive. Obviously, the focus of these benefits is on saving money. However, numerous additional benefits are also highlighted, some of which are set out below:
“Expanding current best practice service delivery models that exist within perhaps one of the Partner Authorities.”
“Supporting a change in the Partner Authorities’ culture.”
“Providing a vehicle to deliver services to other organisations – LGSS [the shared service delivery organisation] could use its capacity to deliver services to other organisations, such as our geographic District & Borough Councils, cost effectively supporting the wider local public service economy and supporting the emerging “Total Place‟ agenda.”
“Freeing-up management capacity within the Partner Authorities – to focus on their core business and transformation priorities.”
Without commenting on which vehicle (a joint committee or a separate company) would provide the best platform for delivering the project (both options have their advantages and disadvantages), it seems wrong that a project that can be expected to deliver such a step change in service delivery at these authorities – whether back office or not – cannot get the legal sign off to be run in the way that the local authorities themselves wish to run it.
With all of the political parties accepting that there will be massive spending cuts to come, it is inevitable that some of these will bite even further into already heavily pressurised local authority budgets. If local government is expected to deliver these cuts and maintain services, whoever forms the next government must give more power to local government to chose how to deliver its services.
Whether or not the party (or parties!) forming the next government respond to this need, it is clear that shared services and joint working will continue to be hot topics for local government lawyers. At last week’s Solicitors in Local Government Weekend School the numerous issues which can arise from such initiatives were hotly debated at various sessions on procurement, Total Place for lawyers, joint ventures between councils and the private sector, and joint working arrangements, and the effects of the LAML decision could still be felt reverberating round the lecture rooms of York University.