The merger of three London councils will result in the loss of 500 jobs, with IT staff facing “consolidation”, it has been revealed.
In a document seen by Computerworld UK, Hammersmith & Fulham Council, the Royal Borough of Kensington & Chelsea and Westminster City Council have outlined detailed merger proposals to help them reduce costs over the next three to five years. These include “rationalising” IT teams around the areas of systems development, networks management, direct service delivery and strategy.
“There is certainly scope for the consolidation of staff in IT, by merging similar functions and reducing duplication in some strategic functions. Not all of these are tied up in outsourced contracts either,” according to the document, entitled ‘Tri-borough proposals report: bold ideas for challenging times’.
It continued: “There is room for some reduction in duplication to yield savings of around £400,000 per annum, in total equating to a reduction of 10-12 posts excluding schools ICT support.”
The three Conservative-led councils announced plans to share services to avoid cuts to frontline services, and maximise buying power in the IT marketplace, last October. This was in response to the government’s Spending Review cuts, which reduced funding for local government by 7.1 percent a year over four years.
The councils estimate that their IT proposals, from streamlining IT workers, to rationalising data centres, to moving to cloud-based managed services, will help them achieve savings over three years of £3.3 million, which will overlap with each individual council’s plans to realise savings of more than £3 million during the same period.
“Our estimate of savings over five years is more significant at £9.6 million when we can realise the full benefits of consolidated procurement and contracts after existing arrangements have expired,” they said in the report.
According to the document, IT staff could be cut in a number of areas, including school IT support and line of business IT support.
Around 30 staff currently operate as three separate IT teams providing IT desktop, application and network support to primary schools. The report claims that it should be possible to provide the “same or even better service” with a single, smaller team, and fewer management overheads.
“There are specialisms in collaboration tools (Sharepoint and web mainly), records management, geographical information and infrastructure support, which could be consolidated and yield some headcount reductions whilst improving capacity and capability,” the report added.
However, it admitted: “It is in this area where each council is very different and consideration will need to be given to the extent to which outsourced and in-house services differ in terms of total service cost.”
In order to achieve savings in the area of unified communications, the councils are examining the adoption of a converged networks approach, which it said could be done through point-to-point solutions, via the cloud or a public service network. It said that the Public Service Network, London Public Service Network, Government Connect and the NHS spine are all external networks that could be used.
The report said that Westminster recently identified cost reductions of 20 percent on current services, and a possible further 10 percent on those not yet transitioned, after procuring converged network managed services. Based on this, the councils believe they could save between £700,000 and £1.1 million each year on the current total network cost across the three boroughs.
By sharing services, the councils also want to cut down the number of data centres they currently use, from “at least six” to just two data centres over three years. Around four of the data centres currently sit on council premises, with the rest as outsourced managed services.
The councils said that this strategy will lead to the councils moving to cloud services during 2013-15, after existing investments, such as Kensington and Chelsea’s recent “considerable” investment in its primary data centre, expire.
Meanwhile, the councils plan to move some of its information security management services into the cloud, and at least halving the costs of separate network security and employee authentication through consolidation.
“We will need to move to cloud-based managed services with two-factor authentication, ideally based on a London-wide implementation of Employee Authentication Service (EAS),” the report said.
A spokesperson for Kensington and Chelsea said, however, that the merger plans were not yet finalised: "Kensington and Chelsea is in the process of looking at the possibility of sharing a range of services with neighbours in Hammersmith & Fulham and Westminster. Nothing has been finalised and no further comment can be made until all three councils have had the opportunity to scrutinise the proposals."
Nonetheless, Socitm President Jos Creese, who is also CIO of Hampshire County Council, supported the London councils' merger proposals.
"In my view, we will see many more examples like this, and this trend is both welcome and overdue.
"Smaller public service organisations can only sustain their services and remain solvent in the face of cuts by joining up with others, and technology is the key to this. IT allows teams to work together and share information, services to be delivered more efficiently with less intervention, and staff to be more productive," said Creese.
He added: "I hope this will go much further and lead to integration of a whole range of public services at a local level - councils, public protection, health and central government services delivered locally."
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