Sharing services saves taxpayers £840 million

New analysis by the Local Government Association (LGA) has revealed that more than £800 million of taxpayers’ money has been saved by councils sharing services.

Shared services form an essential part of modern daily service delivery and have become business-as-usual for most councils as they seek to meet the needs and aspirations of their local residents and improve performance and efficiencies. The latest shared services map from the LGA highlights 555 individual shared service arrangements across the country, resulting in £840 million of cumulative efficiency savings.

Ranking highly across all the cash savings through shared services arrangements was the use of co-procurement, closely followed by shared back office services and management teams. There has also been a rise in councils sharing their counter fraud provisions, pooling their resources and widening their focus in the prevention of fraud which has resulted in some very significant savings over the last few years.

According to the LGA, shared services are moving towards collaborative transformation - creating new, better, lower-cost ways of working that put the resident, tenant or patient at the heart of the service. This has not only proven to save money, but also ‘reframe the relationships between councils and blurs departmental boundaries’.

Paul Bettison, chairman of the LGA’s Improvement and Innovation Board, said: “Shared services are no longer just something the most innovative councils do, but have instead become the norm for councils to improve services, increase resilience and save money in times of significant change, reinforcing councils’ reputation as the most efficient part of the public sector.

“But while councils have done an outstanding job in making efficiency savings in the face of severe budgetary pressures, there is only so much they can do. Efficiency savings alone will not plug the £5 billion funding gap facing local government by 2020. Without new funding, local services could soon reach a point where there is nothing left to share or collaborate with.”