Care taken when merging council corporate functions can deliver more than just economies of scale, as shared service partnership LGSS has discovered
Gus de Silva moved from category manager in procurement at Northamptonshire County Council into policy work at Cambridgeshire City Council to help merge all professional, transactional and operational services.
His cross-council experience helped identify the differences and develop the procurement team for the shared service partnership LGSS, which became fully functional four years later.
It saved £6.5m in its first year, and £5.7m in 2015/16. Last year, after Milton Keynes joined the partnership, total savings had reached £8m.
LGSS has no legal identity, operating under the separate councils, with one board. It is a partnership “with a spirit of working together”, explains de Silva, now supply chain and commercial development manager at LGSS. “Contracts are done with one of the partners, naming the others.” Recognising the differences is key to the success of the partnership, says de Silva, across the different councils as well as categories. Social care’s wellbeing services, such as smoking cessation advice, might be tendered together, but the authorities will procure separately. HR services on the other hand are harmonised on a common platform, as are IT and finance.
Initially staff worked for just one council, said de Silva: “The guy looking after construction in Northants may be snowed under, but if you asked Cambridgeshire to give some help, they might not understand the system.”
Now teams are structured by discipline, so staff working together can be based in different locations, employed by different councils under different terms, and with different software levels. “It is worth it for the customers’ benefits,” de Silva feels. “We have collective experience.” Staff retention is also high. “Now we have high, medium and low structures of staffing levels,” he adds. “So people can grow within the roles.”
LGSS worked with other organisations for a new mobile phone contract, saving about £800,000 in 2014/15. “We went to market with our own strategy. Usage and calls are particularly high because of the way we work. Most of the management are running around with a laptop and phone – it needed to be seamless.”
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Recognising the differences is key to the partnership’s success, says Gus de Silva. “Cambridgeshire is quite a strong economy, with high levels of tourism and a university, while Milton Keynes is strong on retail. Northamptonshire struggles a bit more economically.”
LGSS is one of the UK’s largest public sector shared services, and is used by other public sector organisations that do not have the procurement expertise. This has enabled greater economies of scale.
The team is particularly proud of its innovative procurement for regional foster care. “We took on the risk – there was a cost,” says de Silva. “But we delivered a massive contract, done in a way that suited all the authorities. It has become a model for procurement.”