Merged services puts councils on track to save millions

25 June 2012

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25 June 2012 | David McAlonan

Three local authorities in central London say they are on track to achieve tens of millions of pounds in annual savings by jointly providing public services. A CPO involved with the project told SM other authorities should follow their example by putting individualism aside and collaborating.

Westminster City Council, The Royal Borough of Kensington & Chelsea and the London Borough of Hammersmith & Fulham published One Year On this month, setting out the progress of the ‘tri-borough merger’.

The merger kicked off a programme of combining service provision across the three Conservative-run councils, primarily in the areas of library, adult social care and children’s services. The three are currently looking at merging some corporate functions such as IT, facilities management and human resources. There are currently no plans to combine the corporate procurement divisions but this is subject to review.

The overall programme is partly in response to an expected funding gap of around £100 million between 2012/13 and 2014/15 in total. The progress report stated that £1 million of gross savings had been achieved in 2011/12 and that the merger is expected to produce almost £8 million during the current financial year. By 2014/15 the local authorities plan to save just over £33 million annually, which they want to increase to £40 million the following year.

David Loseby, who was chief procurement officer at Westminster in the run-up to the merger, said: “It should be seen as an exemplar for lots of other authorities up and down the country. The message needs to be out there that people need to start putting aside their individualisms and other personal beliefs in order to make more gains in terms of collaboration and more effective use of the public purse.”

The savings result from both a reduction in headcount and enhanced procurement practices such as greater bulk buying and a proposal to jointly commission the Central London Community Healthcare NHS Trust to provide adult social care. As part of a commitment to halve the number of senior and middle managers in the combined service areas, the number of posts has fallen from 62 to 34, while Hammersmith & Fulham and Kensington & Chelsea now share a single chief executive.

It is estimated that the costs of implementation – to be shared between the boroughs in proportion to their savings – will amount to more than £6 million in total during the first two years, excluding the cost of redundancies. And the expectation is that combined service provision would lead to non-cashable benefits like shared expertise, improved retention of specialist support and increased trading opportunities with other local authorities.

The trio’s longer terms plans for joint provision include the appointment of a single director of public health. There is currently no intention to combine the councils’ housing, planning or electoral services.

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