Date Fri 10 June 2011

Public service factories are not the key to reforming public services, says UNISON

UNISON, Scotland’s largest public service union, today warned of the high cost of setting up ‘public service factories’ in a bid to save councils cash.

The union said shared services are not providing the answer to modernising public services and warned that services will suffer as a result of the top-down approach to change.

Dave Watson, UNISON’s Scottish Organiser, said: “Co-operation between public services is essential, but that doesn’t mean setting up vast public service factories or bringing in the private sector. Shared services are often pushed by private consultants as a way to improve services and save money. However, these schemes come with huge upfront costs and evidence shows that initial savings are not delivered in many cases – so we would warn against the belief that there is a pot of gold to be released through shared services.”

The drive towards shared services, both within organisations and between them, is based on economies of scale and a view that front and back office functions should be separated.

However, there is increasing evidence from the UK and internationally that this approach is wrong. Few services actually delivered in this way have realised the claimed savings and real costs are simply displaced onto frontline services.

There is also a massive increase in transactional costs as systems drive activity rather than addressing user demand. UNISON believes services should be organised so that staff who meet users are able to deal with most of their needs, without artificially splitting the work up.

The union has also been critical of the Clyde Valley Review, which has involved no consultation with either trade unions or with the staff who deliver services.

He continued: “Bright ideas are never the result of discussions which take place in a darkened room. For positive changes to happen, managers have to adopt a bottom-up approach and involve staff in decision making.

“Job concerns are sometimes hailed as the reason for shared service failings, however, this is simply not the case. We fully support partnership working and efficient delivery of services, however, we are sceptical as to whether this type of shared service will deliver savings and, most importantly, whether it will deliver a better service.”

ENDS

Notes to editors

UNISON Scotland’s briefing on shared services is at www.unison-scotland.org.uk/briefings/100611Bargainingbriefingsharedservices.pdf.

The international experience in America and Australia, and the experience in the rest of the UK, is that the savings rarely materialise, and when they do they come in the medium to long term after a lot of capital has been put in to drive the changes.

John Seddon, author of Systems Thinking in the Public Sector, has outlined many examples of how listening to service users and staff leads to improved services and cost savings. In one example, it shows how managers at GHA completely redesigned their rent arrears system after listening to staff who actually work on the system - resulting in rent arrears being reduced by £7.99m. www.systemsthinking.co.uk

The UK National Audit Office report indicates that so far projects have taken five years to break even. (www.nao.org.uk).

The Clyde Valley Review is a consortium of 8 Clyde Valley councils (East and West Dunbartonshire, North and South Lanarkshire, Renfrewshire and East Renfrewshire, Glasgow and Inverclyde) which has been reviewing the potential for shared services. This review is being led by Sir John Arbuthnott, who has developed an inverted triangle model to show the costs of services. This model shows that there are very few savings to be had from ‘back office’ functions.

For further information contact Trisha Hamilton, UNISON’s Communications Officer, on 0141 342 2877 / 07939 478 461 or Dave Watson, UNISON’s Scottish Organiser, on 07958 122 409.

Index