Services: Scottish Executive Consultation
Briefing No.137 May 2006
This briefing provides an overview of the Scottish
Executive's latest consultation on Shared Services, released in
May 2006. This document, entitled: A Shared Approach to Building
a Better Scotland, highlights the Executive's vision of shared
services across Scottish public services.
Shared services can include corporate support
functions such as human resources (HR) and payroll as well as
some operational processes such as the collection of council tax
or client management. The Scottish Executive believes that such
services may be more efficiently carried out on a shared basis
rather than each individual public sector organisation having
its own services.
The Scope for Shared Services
The Scottish Executive identified shared services
as one of the five key work streams they wished to take forward
in the June 2004 launch of their Efficient Government Initiative.
The use of shared services is expected to play a significant role
in the delivery of a long-term target of £1.2bn annual cash savings
This consultation document sets out the Executive's
proposals for taking forward shared services across Scotland.
It claims to provide evidence to support their view that shared
services can release significant efficiency savings for investment
in front line services, but equally highlights the potential for
shared services to drive up service quality and consistency.
The Executive believes that shared services could
provide potential savings of between £250m and £750m across the
whole of the Scottish public sector.
The consultation paper identifies two main areas
in which there is a potential for shared services:
- Support functions: such as accounting, payroll, human resources
as well as Information and Communications Technology (ICT).
- The common operational processes and systems that underpin
front line services and which are duplicated across multiple
organisations. This would include issues such as council tax
collection, housing benefit, client management, education admin
and customer contact systems etc.
The Scottish Executive aims to develop shared
business support functions and common business processes that
are more independent of the traditional structures and boundaries
that exist within the public sector. They claim this will be more
adaptable and better able to meet the needs of the joined up and
customer focussed front line services that will be the focus of
the debate on public service reform over the coming months and
The Executive has already initiated a number
of complementary work streams in support of their reform objectives.
To deliver a shared services strategy an implementation group
is proposed reporting to the Efficient Government Steering Group.
This will be supported by service based groups and cross service
The paper sets out an indicative timeline. Early
delivery includes a range of NHS and NDPB projects by 2008. Local
government and the broader objectives have a longer timeline to
Implications of Shared Services
UNISON Scotland supports joined-up government
and is always willing to look at innovative service delivery options.
The strength of the Scottish Public Sector Model is that these
options are available when public bodies operate in co-operation
not competition. However, shared services models have significant
problems that are not covered in this consultation. It was not
so long ago that the same management gurus promoting shared services
were arguing for decentralised support services! What comes round……
Many of these problems were originally highlighted
in P&I Briefing No. 10 back in 2001 largely based on our private
sector experience. These concerns include:
- Less personal service, both for users and for the staff. Disadvantaged
groups in particular lose out when services are delivered remotely
- Loss of experienced staff and their knowledge, particularly
- Devaluation of the essential administrative tasks staff undertake
- Devaluation of the service provided in the eyes of the public.
- Alleged savings are not always realised. In particular workload
is shifted from support staff to front line supervisory staff
- Complex delivery of public services needs staffing by people
who understand the working of the whole organisation
- De-skilling of administrative staff can lead to their de-motivation
and a high turnover.
- Not all of the new technologies are proven and can often come
at a high cost.
- Particular problems that cannot be resolved at the front line
have to be shifted to a line manager.
Shared Services can lead to a whole range of
difficulties that need constant monitoring. Trade union involvement
The paper highlights the importance of early
and continuous communications with staff and engagement with their
trade unions. Unfortunately that didn't include this consultation
paper which could have been more comprehensive with trade union
input. There is also a comment that best employment practice should
be used in handling staffing reductions including a presumption
against compulsory redundancy in favour of natural wastage, supported
by retraining and redeployment.
UNISON Scotland would have obvious concerns about
any job losses and changes in employment terms and conditions
and would want to ensure that the union is involved in all discussions
at the earliest opportunity.
Other than staffing the weakest aspect of the
paper is on shared service structures. The paper vaguely describes
the options of public, private or hybrid models. There is little
discussion of the EU procurement rules that have caused problems
for NHS shared services in England and in some Scottish local
authorities. A related concern is the potential loss of democratic
accountability and the additional costs if council services are
bought in from an external supplier. Off shoring is not mentioned
– or ruled out.
The paper also highlights that investment is
needed to realise any savings from shared services. It states,
according to past examples, an average ratio of upfront investment
to net annual return of 2:1. In other words, £60m investment is
needed to produce net annual savings of £30m.
However, later in the paper the Executive reveals
that other sources of investment would have to be looked at including
public service organisations' budgets, prudential borrowing and
private sector investment.
Further Information Action for
The full consultation paper can be found at:
P&I Briefing 10 http://www.unison-scotland.org.uk/briefings/shared.html
This is an important issue that could impact
on thousands of members jobs.
Discuss and consider the implications of the
paper for your branch and send views to Dave Watson by 12 June
Contacts list: Dave Watson email@example.com
Kenny MacLaren firstname.lastname@example.org @ the P&I Team 14 West
Campbell St Glasgow G26RX Tel 0845 355 0845 Fax 0141-307 2572
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