Thursday 21st June, 2012

In a move which underlines the need for careful planning prior to implementing shared service operations, Hambleton and Richmondshire councils have announced that they are going to stop sharing some existing services including IT and other "back office" operations. Two neighbouring councils in North Yorkshire have agreed to "separate" some existing services after deciding that the existing arrangement wasn't working. The councils initially started sharing services in 2009.

Hambleton said that there had been "no big fall out" between the two authorities, but it was looking at new ways of providing services. The council added that "It took over two years to set shared services up so we cannot dismantle it within five minutes – nor would we want to. Some of the services will remain shared as that will be the best way forward for the authorities."

This latest move away from sharing the whole gamut of services an organisation provides,  raises questions about the merits of wholesale shared service implementation and whether it's necessarily the best and most cost effective way forward for all local authorities. A number of councils in the Cotswolds recently revealed the challenges they had trying to get their cross-border collaboration off the ground.

Despite this, a number of other local authorities have found sharing services to be an effective way of making savings. London tri-borough councils comprising Hammersmith & Fulham, the Royal Borough of Kensington and Chelsea and Westminster, have announced in a 'one year on' progress report that they are on course to save £40m a year by 2015-16 by combining services and management costs.