A study for the LGA by consultancy Drummond MacFarlane found that five projects using shared services had made a cumulative saving of more than £30m between April 2007 and March 2012 by cutting jobs, integrating IT, improving procurement and using property more effectively.
The report, “Services shared: costs spared?” said that the set-up and integration costs of sharing had been modest, with less than a two-year payback period for all the services analysed, while the arrangement provided at least the same level of performance at lower cost.
It noted that “baseline financial and performance information is essential to make the case for change and track the benefits of shared services in terms of efficiencies and service improvements”.
The report also stated that expanding established shared services for other public-sector partners was a useful way for councils to generate income and gain efficiencies through economies of scale.
Peter Fleming, chairman of the LGA’s improvement board, said that most English local authorities were sharing services. “Councils are the most innovative and efficient part of the public sector. This report demonstrates the kinds of steps they are taking to save money and improve services,” he said.
To download the LGA report, visit bit.ly/S6NCYc