Staff and shared services

More councils are seeing the benefits of sharing services. The government recently estimated that 17 per cent of councils share services but nearly half have considered the option.

Money can be saved and services streamlined and a greater area covered by sharing services. Staff costs may also be reduced but it is here where councils have to be particularly careful.

The Employers Organisation has just produced guidance for staff issues. It outlines several different approaches to sharing such as informal arrangements, joint commissioning, use of third-party agencies and multi-project collaboration.

These different approaches all have their own strengths and weaknesses. For example, the report finds that informal arrangements are inexpensive and have little or no staff loss or displacement but yield few efficiencies. Meanwhile, third party bodies may involve little or no job losses as the new agency takes on more work or has staff transferred to it but councils considering this route will have to look at TUPE laws and pensions.

So what are some of the workforce issues that need to be considered?

• Councils have a statutory duty to consult on changes that may lead to redundancies or the TUPE laws operating. HR needs to be involved in the process early on. Local authorities involved should also have a joint plan about talking to and involving staff in the changes and have a positive attitude to the involvement of trade unions.
• Additional costs at the outset of the project will be incurred such as extra legal or HR staff, which may reduce eventual savings.
• There will be costs in staff changes. These may be in the form of secondments, redundancies or early retirements.

Secondments have been adopted by some councils’ PPP schemes and allow the staff to move back to the original authority with their terms and conditions intact. But few staff savings result.

Redundancies and early retirements should be evaluated when setting up a joint scheme as the costs may outweigh the savings. There are also legal considerations including time of notice, negotiations and morale of the wider workforce.

Also where two authorities or more are involved in joint processes the existing terms and conditions should be harmonised to prevent different contracts and prevent distrust among staff.

Recruiting staff to the new services must be done with care and sometimes a third party should be used such as consultants to prevent any bias. While ring fencing posts for the new services is a way of reducing disruption it must be done without bias.

A well planned HR strategy should help overcome most problems but councils should communicate and involve staff in changes to ensure that any that do arise can be health with fairly and equitable.

• Shared Corporate and Transactional Services in Local Government from www.lg-employers.gov.uk