Shared Services: The Great Sell Off

The decision of Cornwall Council’s Cabinet to approve the proposal for ‘Shared Services’ has angered many Cornwall Councillors outside of the Cabinet. The information on the proposals has been limited to those who are not in the Cabinet. If the information to back-bencher’s is limited, you can bet the information for the public is even worse.

The Cabinet’s reason for this sell-off is to save money, and create jobs. At face value, you can understand those reasons, but look behind the words, and you get to think how will this be done? Take for example Stuart Roden’s view as Unison spokesperson.

“We don’t see how it’s possible to protect and create jobs, make savings of 20 per cent-plus, improve services and make a profit for the shareholders of private companies. The whole thing does not stack up.”

A private company’s first (and probably only) loyalty is to their shareholders, unlike a public sector, whose loyalty is to the tax-payer. So how will they save money? It is quite simple; staff and pay. Even the Director at Cornwall Council who is leading this plan said in an interview:

On the scenario referred to as “the J curve” could see fewer jobs in Cornwall before all the new jobs were created.

I am sure the 1000 or so staff which will be ‘transferred’ are really happy with the scenario of the J-curve. Worse, and from my understanding, those staff that are transferred would not be able to apply for internal jobs at the Council either!

So what is being offered to the private sector (corporate)? The list certainly made me wince when I saw it.  Well, here is the list:

  • HR – payroll, employment support
  • Finance Transactional – invoice processing and payment
  • Income – billing and collection of council tax, business rates and other sundry debts
  • Benefits – Housing/council tax benefit, financial assessments for adult care, free school meals
  • Customer contact – Call Centres, channel migration and web enhancement
  • Face to Face – Libraries, One Stop Shops, Registration
  • Operational Support – training, systems and general administration,  scanning and archive services

How do you feel with Libraries; One Stop Shops; Benefits, including housing; adult care, free school meals; customer services being run by a private company? A lot of spin has been said about this not being privatisation, but it is, as you are giving these services to a private company to run.

Even the Council Tax we pay to Cornwall Council will be given to a private company to collect and run. How is that possibly right? It will be the same for Business Rates. I would like to see how sympathetic this private company is to those who might find themselves in financial difficulty. I think we all know the answer to that.

Professor John Sheldon HERE and points out:

“Literature on shared services show that all of the ‘evidence’ for sharing comes from estimates, projections (to make the savings sound big) and surveys. No of which represent actual evidence. Additionally all of the evidence is being generated from within the shared services industry (IT software sellers, private BPOs and consultancies). In recent years thinktanks have become vehicles to wash the evidence clean of any bias, reports been produced that are flawed and do not take the facts into account or are based upon reports from those services already sharing”.

Or from The Guardian (just one of many articles on the folly of shared services)

Southwest One, the joint venture between IBM, Somerset county council, Taunton Deane borough council and Avon & Somerset Constabulary, was launched in 2007 with a plan to save £192m by sharing back office functions. So far it has recorded a pre-tax loss over its three financial years, with the latest loss peaking at £16.5m.

Yet managers claim to have made £3.3m in cashable savings. Clearly I need to learn something about accounting – how can you make “savings” at the same time as filing such major losses? It is also reported that a problem with the accounting system has led to duplicate payments worth up to £772,000 and £12.9m in outstanding debts. Meanwhile Southwest One leaders maintain that it can still achieve the promised savings for its partners.

I am certainly not happy, and I am in the process of doing something about it.

2 comments

  • Richard Glover

    Fully with you Andrew. However, when you’re talking here about “private sector”, actually what you mean (quite correctly) is “corporate”. Worried about share price, yield, “efficency” and growth at any cost.

    Private sector in the Cornwall sense is very different: many small businesses, caring deeply about their place in the community, often to the detriment of their profit margins.

    As the largest corporate by far, Cornwall Council has more in common with BT than even the largest company in Cornwall. It also tends to behave like the big, bad, corporates when what we really need is a strong public service leadership…

    This decision by Cabinet, like many recent strategic decisions and “economic strategies” being made in their name, misses the point.

    Good luck with the campaign; let me know if I can help.

  • Martine Knight on Facebook

    The rich will get richer and the vulnerable will not get the services they need!

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