London-wide shared services

Author: Local Government Chronicle - Apr 8, 2010

Ambitious plans for all 33 London authorities to share financial and HR systems are being floated to finance directors, in a bid to make substantial savings.

Barking & Dagenham and Croydon LBCs are spearheading the "pan-London financial systems proposal", which could save tens of millions of pounds in IT costs alone if they can sign up enough boroughs.

The councils are hoping to sell the plans to other boroughs at a meeting on 18 April. Board papers from Capital Ambition, London’s improvement and efficiency partnership, indicated there was already interest from other boroughs, including Havering and Lambeth LBCs.

Capital Ambition has so far contributed £250,000 in funding to carry out a feasibility study.

The board papers said savings would come through reduced procurement costs, improved relationships and negotiating positions with key finance system suppliers and reduced costs through more efficient processes.

A single framework would also "increase the feasibility of other shared and collaborative arrangements", the paper added. With the project in its infancy, a figure for savings has not been calculated but the cost to a single borough of upgrading an HR and financial IT system - which must be done every few years - can be at least £1m, while signing a new contract can be as high as £8m.

The councils have also consulted the Society of London Treasurers and the paper said participating authorities would be expected to pay £50,000 towards the project.

Croydon deputy chief executive Nathan Elvery, left, said: "The hypothesis is very simple. There have been a number of examples of these projects already but rather than try to do something between two authorities, the ambition is to do something between all the authorities in the capital."

Barking corporate director of finance & commercial services Tracie Evans said: "It’s an ambitious project and will take a leap of faith but there are savings to be made in terms of procurement, licensing and economies of scale."

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