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Shared Services

Shared Services - latest excuse for a business case

Clyde Valley shared services We now have the latest excuse for a business case for the Clyde Valley shared services project.

Our briefing on the initial business case is on the UNISON Scotland website and sets out a range of concerns. The latest version addresses few of these issues. The claimed savings are based on some very broad assumptions.

Throughout the document there are some very suspicious neat rounded numbers or percentages that give the clear impression that detailed work has not been done. There is also only a limited sensitivity analysis.

A big part of the claimed savings come from 'self-service' delivery systems. Well you don't need a massive shared services structure to introduce this and all it does is to displace support service costs to operational staff.

It is therefore a paper saving that takes staff away from service delivery. Other costings are very optimistic and in particular redundancy costs.

They assume only 25% of the staff reductions will be achieved by redundancy. Given lower staff turnover and other factors this is an obvious under estimate.

An important factor would be office location, but again the document is very vague about actual locations, referring vaguely to a 'distributed model'. No vagueness about the big budget for 'specialist expertise', or in plain English, consultants.

Even with these optimistic assumptions the financial savings are still low for the investment required. There is no Equality Impact Assessment. Apparently this can wait until April 2012, after the decisions have been made!

Same applies to environmental and climate change assessments, statutory duties that are just ignored. Another key issue is the organisational model. The business case rejects the obvious best solution, a joint board, on the most spurious of grounds.

The assessment uses some highly subjective judgements to weight the analysis in favour of a public/public company model. This is despite the strong track record of joint board structures in Scotland (e.g. Tayside Contracts) and the legal problems under procurement law of the other options.

They still brush over the VAT and Corporation Tax issues with the company options. A cynic might conclude that this is being done deliberately to push it into the private sector as a second stage operation, claiming 'legal problems'.

The main argument against a joint board is the unknown attitude of the Scottish Government. This is frankly bizarre as the Scottish Government has spent £millions trying to get shared services going and is almost certainly going to be supportive.

Possibly the weakest aspect of the business case is the workforce aspect. The document talks about engaging the workforce and even quotes from the Christie Commission report. As the business plan was developed without any staff input this is a bit rich.

What the Christie Commission report highlights is the importance of bottom up service design. This proposal is a classic top down, one size fits all plan that ignores staff and service users. If the authors had read all the Christie report this is explained very clearly in s.4.47. 80% of transactions using this type of service delivery model relate to failure demand i.e. sorting out mistakes.

Rather than ensuring that when someone turns up for a service they are met by staff who can help them through it. In summary, this is simply the wrong approach to service design. Even the private sector panel commented that it has big risks with size and complexity. Councils are asked to take this risk in return for at best modest savings. Even those savings are unlikely to be realised due to optimistic assumptions and cost displacement.

This plan has 'Edinburgh Trams' written all over it.

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