Councils must innovate to meet need for savings, says expert

IT contacts expert Clare Murray of Pinsent Masons, the law firm behind Out-Law.com, said a proposed shared IT services agreement outlined by two London councils highlights the need for councils to "look more innovatively in terms of how they source their technology and support services in order to deliver front line services".

Islington and Camden councils plan to merge their existing IT teams into one to create a new shared information and communications technology (ICT) service by April next year. In a statement the authorities said the move will help them make £4 million worth of savings a year.

Murray said that similar shared service agreements are likely as local authorities look to realise savings in the face of cuts in funding from central government.

"There are increasing demands of councils all over the country to provide adult and childcare services so councils are looking to back office functions to realise savings," Murray said. "Many of the 'easy' cuts that could be made to council's operating model since the economic crisis hit have already been made, and suppliers have also been pushed to cut their prices. This means councils must think more radically about where they can achieve efficiencies whilst retaining the ability to function effectively."

"Shared IT service agreements are a way for councils to pool resources but also to achieve the scale and buying power they need to making savings in procurement of new technology," she said.

Murray said, though, that there are a number of challenges facing local authorities that enter into shared IT service agreements.

"The best chance of making a success of shared service agreements is if the local authorities collaborating have the same strategic objectives and same operational priorities," Murray said. "Different organisations will have different priorities and this can create an issue for multiple councils running or procuring technology. Issues can arise where there is not a common understanding and alignment on the type of technology they need to buy, the cost they are willing to incur for that technology and on the risks they are willing to accept in how and when they implement it."

"Alignment of this nature is challenged by the changeable political landscape in local councils which can see priorities change with alterations to the administration following elections," she said.

One challenge presented by shared IT service agreements is often in operating different legacy IT systems across different local authorities and managing change, Murray said. In those cases councils have to evaluate whether it is best for staff to move onto a single system that IT teams or their suppliers can manage, but this will require further difficult questions, such as how they share the cost, risk and responsibility of migration and integration, , she said.

"The best chance of success is where there are common system requirements and strong communications between local authorities and their suppliers," Murray said.

Murray said that the need to realise efficiencies is prompting some local authorities to look at new ways of increasing their revenues. She said innovative joint venture agreements are among the options some councils have explored as a way of commercialising the services they provide.

The proposed Islington and Camden councils shared IT services agreement need to be approved by members of both councils. Votes on the issue are scheduled for later this month.

Theo Blackwell of Camden Council said: "Both councils have a long history of collaboration and share similar objectives, so it makes perfect sense to come together to provide an improved service at a lower cost. In the future, the joint service may also be able to generate income for both councils through selling its combined expertise."

Andy Hull, councillor in Islington, said the planned partnership is "a good example of how, in the face of unprecedented challenges, we are innovating and coming up with genuinely transformative solutions".