Three councils in London have announced plans to merge their services in light of the government’s Comprehensive Spending Review.
Hammersmith & Fulham, Westminster City Council and Kensington & Chelsea said that they are looking to share ‘every major service’ in order to avoid cuts to frontline services.
Funding for local government was cut by 7.1 percent a year over four years, in this week’s Spending Review, as the government announced its proposals for cutting the nation’s debt. In addition, analysts said yesterday that there will be a fundamental transformation in the way local authorities buy IT services from now on.
“We have agreed to progress plans to share every council service between our three councils,” the council leaders Stephen Greenhalgh, Westminster council leader Colin Barrow and K&C leader Merrick Cockell said in a joint statement.
“This may include merging services to reduce duplication and drive out needless cost. While we won’t rule anything out at this stage, we expect to focus quite quickly on a few major areas where sharing and merging services is viable and good for the public.”
They added, however: “There are a number of areas, such as core democratic services, where we are unlikely to merge provision.”
The councils will be setting up working groups to explore the merger of all three councils’ corporate services, children services, environmental services and adult social care.
When asked if corporate services includes IT, Westminster’s CIO, David Wilde told Computerworld UK: “We are talking to each other, yes.”
The working groups are due to report their recommendations in February 2011, but meanwhile, H&F and Westminster have already started looking at merging their education services.
Previously, Wilde said that Westminster was planning to launch a new ERP system, known as Project Athena, in 2012. Project Athena came out of a London councils initiative known as Capital Ambition, and aims to align corporate IT systems across the 32 London boroughs.
“Why have 10 instances of Oracle [for example] when you can have one, which will be used by a lot of others?
“Buying at the enterprise level is a more cost-effective level, rather than just the finance or HR department and so on buying what they need,” Wilde said.
The three council leaders insisted that merging services will become a growing trend, yet the final offering could still remain local.
“We want to stress that local priorities will still be driven by local people,” Greenhalgh, Westminster council leader Colin Barrow and K&C leader Merrick Cockell said in a joint statement.
“Our plans may be the first of their kind, but sharing services in this way can no longer be viewed as a radical concept. It will soon become the norm for local authorities looking for innovative ways to keep costs down while delivering high quality frontline services.”
Local Government Secretary Eric Pickles commented: “This is exactly the sort of innovation that will help councils to protect hardworking families and the most vulnerable. By sharing back office services, they’ll be able to protect the frontline – and even improve the choice and services that’s on offer to local residents.
“Sharing services is just one of the options open to councils to ensure they are making the most of every pound they have, alongside moves to become more transparent, improve procurement and cut out waste.”
H&F provided some more details about its cost-saving measures, saying that it had saved £55 million over the last four years. It estimated that following the spending review, it will need to find another £65 million in savings. The council expects this to result in the loss of 700 jobs, but said it will reveal precise details about cost-saving measures in December or January.
Furthermore, in an effort to save £28 million over the next financial year, H&F said its measures will include cutting senior management costs by £570,000, and selling council buildings to reduce its historic debt, which currently stands at £133 million.