Christie Eleison V

From blog hits, it’s clear that dissection of the Christie Report makes less than riveting reading for our readers. But we make no apology for this instalment—nor for one more to come (anorak it may be, but it matters, guys). In the first four parts we’ve examined: the state we’re in (I); the recommendations (II); medicine for the NHS juggernaut (III); and public sector workers’ increasingly bolshy stance (IV). What we are considering today is, given ‘parity of esteem’ between government and councils, if “physician, heal thyself“ is a plausible, or even sensible, directive to councils.

Councils have a poor record of self-analysis and none on constructive reorganisation. They fought both 1976 and the 1996 UK-government-driven re-organisations tooth and nail. Since then, the net number of senior managers, which ballooned under the expanding budgets up to 2008, has failed to drop in the more stringent times since. And, while setting up Arm’s Length Executive Organisations (ALEOs) has shown some new thinking in places as diverse as Glasgow and East Lothian, the bulk of council business is still integral and by departments congruous with the council area.

After the 2007 change in most council administrations (and given a boost by the subsequent financial debacle) many councils formed local task forces to explore shared services (ELBF around Edinburgh and Clyde Valley Partnership around Glasgow). There were also efforts at national co-operation like Scotland Excel to combine purchasing and joint efforts for Stirling/Clacks and East/Midlothian to share back office and central control of Education and Children’s Services. All this was supported by CoSLA, the Improvement Service and the Scottish Government.

So, four years on, where are the victories, the better services, the streamlined delivery, let alone the savings? So far, bupkiss; zilch; nada. Stirling and Clacks have tied the knot and East/Midlothian may do so this year but any impact will be seen next year. Scotland Excel has a staff over 100 and is indeed driving down the cost of paper clips but councils still insist on buying big Tonka Toy trucks with their own special fixtures so worrying about the pennies while the pounds flood out the door makes SE’s £3.7m cost look like spend to spend more than to save.

But most telling has been the total failure of shared services—where one council provides all the service to another for a charge (ideally less than the original service cost). While Scottish Borders does get many roads contracts from elsewhere, nothing like a real shared service exists. Why 32 payroll departments or housing advice or welfare rights or a myriad back-office functions need be repeated in every city hall across Scotland is unclear. But ask a director and they will say “my department’s very efficient and we would not get that service from somewhere else”. Ask, if it’s that good then, why it cannot be sold as a service to another council and you get “they require a different specification and it would cost us money to run two systems”.

Despite three years of dire warnings from government and their administrations about budget cuts, it is not the staff—bolshy or no—who are the problem. It is the Heads of Service (on £80k+), backed up by their Directors (on £100k+) who, having enjoyed cushy 5% increments to budgets for a decade simply seem incapable of appropriate action. Across Scotland, we pay council senior management teams £100m; we are not getting our money’s worth. Drastic as wholesale government intervention may be, heads will need to roll pour encourager les autres. Public service management, never having seen calamitous times, badly needs a crash course in dealing with them.

About davidsberry

Local councillor, tour guide and database designer. Keen on wildlife, history, boats and music. Stood for the Scottish Parliament 2011; lost by 151 votes.
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2 Responses to Christie Eleison V

  1. There are two broad ways of ‘doing’ shared services, one is scale sharing.

    Literally putting together all of a similar function under one roof to achieve ‘economies of scale’. The belief is that this will allow jobs to be shed and perhaps even buildings to be sold. The reality of the savings is that once the buildings have been sold the savings are small. There is a massive difficulty in getting these sorts of sharing to work (despite the tall claims of many shared service advisors). Almost all of the evidence is based upon estimates and surveys (instead of real hard evidence) produced from the within the shared services industry or produced by those who will benefit. The New Local Government Network (NLGN) for example, representing over 20 shared services providers (probably funded by them) produces seriously flawed reports supporting sharing. The McClelland Review of public sector ICT infrastructure in Scotland is also flawed using economies of scale to support its arguments. It has been known for a long time that economies in services come from flow not scale. None of these severe criticisms of shared services were reflected in the McClelland Review.

    Often sharing is based upon standardization of services turning them into transactions. In services resolving people’s problems standardization is anathema to quality. It makes the service less able to absorb the variety inherent within demand. In the McClelland Review uses these arguments to say that the unit cost per call or transaction can be reduced. Often when this cost focused approach to service is used unit costs can appear lower, whilst it can take 10 or 20 units to actually get the original problem solved. True cost becomes hidden by measures unrelated to purpose.

    That non of these important issues have been explored is shocking. More shocking will be the political impact when these service organizations begin to malfunction because these arguments have been overlooked.

    In service economy is in flow. You never start by sharing but by study and redesign against purpose. This re-focusing unlocks massive improvements in quality and massive reductions in costs. It is at this point you will know if the service is right or ready for sharing.

    Not doing it this way will lock-in massive costs in the form of failure and waste. Additionally they will fight to undermine localism.

    Politicians I believe want to do the right thing but they also want to save money quickly. If you do it the scale way you will save some money and yet break many authorities and services (and those receiving services) on the back of a ‘cost-saving’ wheel.

  2. Pingback: They Also Serve | davidsberry

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