Agenda item - Shared Services

Attached is a report outlining the principles of shared services, together with reports and business cases relating to the following services:

· Legal

· ICT

· Building Control

Cabinet AGREED:

(1) That the approach to shared services outlined in the report be endorsed.

(2) That approval be given to the establishment of a Joint Committee without delegated powers to oversee the delivery of shared services.

(3) That the Leader be confirmed as the Council’s representative to this Committee and a deputy be appointed.

(4) That the proposed sovereignty guarantee in paragraph 36 of the report be approved, subject to the inclusion of the words ‘and users’ after ‘residents’ in the third sentence and the same sentence being amended to reflect that the commissioning or delivery of services together was specifically designed not to change how residents and users experienced services, unless there was an improvement in services.

(5) That the approach to cost sharing principles and partnership agreement as outlined in the report be approved.

(6) That the approval of the final partnership agreement be delegated to the Chief Executive in consultation with the Leader of the Council.

(7) That, subject to the approval of the business cases for ICT, Legal and Building Control Shared Services, formal consultation commences with Trade Unions/Staff Council and affected staff on 24 July 2015, closing on 1 September 2015.

(8) That the business cases for ICT, Legal and Building Control be approved and the Executive Director (Corporate Services) be delegated to make decisions and to take steps which are necessary, conducive or incidental to the establishment of the respective shared service in the business case.

(9) That performance of the ICT, Legal and Building Control shared services be monitored monthly at the Partnership Board for Shared Services and the Joint Committee, for the first six months of the shared services.

(10) That the Legal Practice Business Plan for 2016/17 be available for scrutiny by February 2016.

Cabinet considered an overview report on shared services, together with three separate reports setting out the individual business cases for shared service proposals in respect of ICT, Legal and Building Control.

Councillor Simon Edwards, Deputy Leader and Finance and Staffing Portfolio Holder, presented the overview report which set out the overall framework that had been taken to develop these shared services proposals with Cambridge City Council, Huntingdonshire District Council and South Cambridgeshire District Council. He highlighted that, as part of the governance arrangements, it was proposed for a Joint Committee to be established to oversee the operation of shared services that would be supported by an officer Board. Councillor Edwards stated that the Leaders of the three Councils would make up the membership of the Joint Committee, but emphasised that it would have no delegated decision-making power. He referred Cabinet to the sovereignty guarantee set out in the report which supported this.

In terms of the sovereignty guarantee, is was agreed that the third sentence should be amended to reflect that that the commissioning or delivery of services together was specifically designed not to change the experience of services, unless there was an improvement in those services. This meant that those using the service should experience the same level of service or an improved service, but not a reduced service as a result of this collaborative working. It was also suggested that the term ‘users’ as well as ‘residents’ should be used within the same sentence. This was also agreed.

The following points were noted during discussion on the overview report:

· a question was asked as to how the shared services arrangements already in place and taken forward over the last few years, as referred to at paragraph 10 of the report, had performed. Councillor Mark Howell, Portfolio Holder for Housing, referred to the Home Improvement Agency and acknowledged that some unexpected cultural differences had been experienced which did have an initial impact. Shared values and outcomes were now in place and he was of the view that lessons had been learnt as a result of this particular shared service which should have a positive impact on developing and implementing new shared services. Councillor Edwards reported that shared payroll and internal audit services were working well, with the Council’s Corporate Governance Committee content with the internal audit service in particular;

· a question was asked as to why these proposals had not included a pilot scheme to test their success before committing to formal arrangements. In answer to the question it was noted that it would be difficult to run pilot schemes for these shared services proposals. Pilot schemes would have created unnecessary uncertainty amongst staff and it was important to be assured that clear structures were in place to provide opportunities as part of the proposals for each service;

· some of the shared services proposals were hybrids, effectively halfway between a district and unitary authority, so clarity around who was responsible for what would be important. Councillor Edwards agreed that the shared services proposals were hybrids, but cited the joint waste service with the City Council as an excellent example of where it made sense to work together to make savings, improve efficiency and deliver improved services. He also emphasised the importance of the sovereignty guarantee in respect of each Council maintaining its decision-making power for each of the shared services proposals;

· South Cambridgeshire District Council maintained a tradition of keeping services as close as possible to communities, residents and service users and a concern was expressed that this could be lost as part of these proposals. Councillor Edwards felt that services would continue to be delivered in the same way, or improved, as a result of the shared services proposals;

· there should be elected Member involvement in the recruitment of senior positions to shared services. Councillor Edwards confirmed that elected Members would be involved in the recruitment processes of senior positions for each shared service, which had recently occurred with a senior appointment to the joint waste service;

· a question was asked as to why these three significant service areas would be amalgamated into formal shared services simultaneously. It was suggested that the ICT shared service should be embedded before any of the others were put in place. Councillor Edwards reassured Cabinet that a lot of work in the background in relation to ICT had already taken place. Councillor Peter Topping, Portfolio Holder for Corporate and Customer Services, accepted that there were dependency risks between these proposals but said that they would be managed very carefully. He also added that these shared services would not all commence on one day, but would consist of a series of managed activities between the autumn and April 2016;

· a question was asked as to why the same governance model that was in place for Local Government Shared Services had not been included as part of the proposals for these shared services. It was noted that the Local Government Shared Services model included devolvement of powers from each partner Council through a formal joint committee, with delegated decision-making power. The proposal as part of the shared services for Legal, ICT and Building Control, at this stage, was to retain decision-making powers within each partner Council so that the joint committee was only advisory.

Councillor Peter Topping, Portfolio Holder for Corporate and Customer Services, presented the business case for shared legal services and the rationale for the establishment of a Practice was noted as follows:

· to enable a reduction in the externalisation of legal work through the broader sharing of legal capability;

· to increase output from lawyers by managing non-lawyer work away from them;

· to create a single point for commissioning legal services to improve value for money from the process of externalising legal work;

· to increase the opportunity for income generation by offering legal services to public and voluntary sector bodies;

· to improve staff recruitment, retention and development.

Discussion ensued and the following points were noted:

· the three partner Councils had three different cultures, with the City Council supporting urban needs, South Cambridgeshire District Council supporting rural needs and Huntingdonshire District Council supporting a mixture of the two;

· each Council currently benefited from legal officers who were familiar with each respective authority and understood historical cases. A question was therefore asked as to whether consistency would be lost as a result of the shared service proposal. Councillor Edwards was confident that this would not be an issue and that sound legal advice would be provided by any professional officer from within the legal shared service at any time;

· the City Council appeared to have significantly more legal professional staff than the other two Councils, which meant that the City Council would make more of an efficiency saving resulting from the shared service proposal. A comment was made that South Cambridgeshire District Council, with its smaller workforce, was being penalised for being more efficient and so a question was raised as to the modelling used. Councillor Edwards reminded Cabinet that the City of Cambridge was very different to rural South Cambridgeshire, with huge commercial estates to manage as well as dealings with University and College estates;

· the main driver behind the shared services proposal was to make the service more resilient and to provide better opportunities for staff currently within each of the individual Councils’ legal teams.

Councillor Peter Topping presented the business case for the shared ICT service and the rationale behind the proposal was noted as being to:

· create shared applications systems and technical infrastructure to facilitate wider shared service delivery for all Council services;

· reduce overall costs;

· increase resilience and capacity and improve staff recruitment, retention and development.

The following points were noted during discussion:

· there were savings to be made from the technical changes as well as from staffing through amalgamating systems and being in a stronger position to negotiate with suppliers;

· a question was raised as to what provision had been put in place for ongoing maintenance and upkeep of legacy servers in order that information could still be accessed going forward. Councillor Edwards provided Cabinet with an assurance that technical considerations such as this would be managed as part of the transition.

Councillor Robert Turner, Portfolio Holder for Planning, presented the business case for the building control shared service which would enable each partner local authority to undertake its statutory duty in implementing and enforcing the building regulations in their respective areas, whilst providing a more sustainable and resilient business model for future service delivery and cost effectiveness. It would also enable the development of a five year business plan to generate additional income and create efficiencies which would support enhanced competitiveness in a commercial market.

A question was raised in relation to the sovereignty guarantee in respect of the user experience, as it was suggested that the experience of users would change should officers not be retained on the sites of their existing local authorities. The point was made that Building Control Officers were often away from the office on-site in any case, but that there would be ways of ensuring they could be contacted through technology and remote or mobile working.

The Scrutiny and Overview Committee, at is meeting on 7 July 2015, endorsed the recommendations to Cabinet as set out in the Shared Services Overview report and in the shared Legal, Building Control and ICT services reports. The Committee also recommended:

· that performance of the Legal, Building Control and ICT shared services be monitored monthly at the Partnership Board for Shared Services and the Joint Committee, for the first six months of the shared services;

· that the Legal Practice Business Plan for 2016/17 be available for scrutiny by February 2016.