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With this week's CSR setting the agenda for more transformational working, The MJ and Eversheds invited leading local government lawyers to discuss the future pattern of shared services, and the obstacles to achieving them. Heather Jameson reports As local government faces the dilemma of how to cope with the cuts ahead, every area of council expenditure is under the spotlight – but none more so than the central services. The MJ and law firm Eversheds recently gathered together some of the leading lights of the local government legal world to find out if they could shed any light on the solutions. It is clear that all local authorities are in different positions in terms of where they are with shared services, but it is also obvious there has been far more talk than there has been action on the issue. However, the lawyers around the table also understand the obstacles are not legal but cultural. It is the barriers put up by politics, people and organisations which are standing in the way of change. Some of the councils represented at our debate are looking at cutting costs through shared services and even management mergers – some within their own legal departments. But while local authority management teams are in favour of the moves, the reality is it needs a great deal of commitment to drive through. As a result, it is the ‘less ambitious' projects for single services which are more likely to be driven through – the quick-wins and easy options. What are left are the more difficult changes which will shift the shape and culture of the whole of local government in the future. The current financial climate and change of government has created a perfect storm to move things forward. But is the sector ready? As one participant points out: ‘The political will varies. Often the chief executive thinks it's a good move and then, when one gets down to head of service level, they are more wary.' Even then, the will to shared services is less motivated by a shift in culture than it is motivated by cash. ‘The political will comes entirely from the financial situation.' It is perhaps not the best situation in which to win hearts and minds. For another participant, the move towards sharing services is more decisive. ‘Politically, there is a real push. No bets are off. But I'm still unconvinced about the business case.' Instead of just sharing services, some around the table want to do something bigger and more ambitious. ‘If you turn this round and ask, Can we use this for revenue building, then I am interested.' Many councils are looking at how they can potentially charge to do the legal work of some of their partners, not just joining up with other local authorities, but also other public services and the voluntary sectors in their area. ‘Is there an opportunity for legal teams to be looking in that direction rather than shared services with other councils? That's what I would be interested in,' says one participant. While it is agreed there is ‘no one-size-fits-all solution', there is an interest in the possibilities, with different councils opting for different solutions. ‘We have to look at each service and see if they are appropriate for shared services.' As another debater says: ‘It's very exciting.' But the barriers are big. ‘People start getting very territorial.' And there are difficulties for the legal teams to address too. ‘Employment law hasn't really caught up with this issue.' Legally, one can't be employed by two different organisations. As a result, the legal barriers to working across two councils are difficult, or one council must take precedence in the employee contract – shifting the balance of employment. ‘What's striking is how old this legislation is.' The power of general competence is just around the corner in the next local government Bill, but while it may help in some instances, the group agrees that the legal issues are not really the problem. Most of the barriers can be addressed if the will is there. ‘Most of us can use the existing well-being powers to do almost everything we need to do. General competence will be good to have, but not necessary.' But another debater adds: ‘I think it's still worth having'. He highlights the recent London Authorities Mutual Limited case as an argument for the new power. For chief executives, legal services are not necessarily going to be their first port of call when it comes to saving cash. ‘We need to think, are there bigger wins available?' It is also important to maintain a focus on the real reason councils are here – rather than running a business. ‘There's a bit of a risk around shared services. The council wants to save money and look after residents. The service wants to go out and get more business.' Another participant advises: ‘Look to be proactive or it will be forced on you.' He suggests his colleagues are ‘opportunistic – not predatory.' For example, he suggests that if a neighbouring authority has a retiring director, he would explore the possibility of joining up. But he wouldn't be launching a take-over. And, as several London boroughs look to join up key services, someone suggests: ‘There must be a reality that if certain London boroughs work closely together and it works well, that's got to be a driver for moving towards cutting the number of London boroughs, or at least to give them shared services.' The legal departments are all currently looking at their costs and examining how they can do better. But, as one delegate around the table points out: ‘A key element of showing value for money is that we can help reduce demand.' Social care has been a prime example of this, where the cost of legal and social services soared in the aftermath of the Baby P case. ‘It's an area where politicians and senior managers are not willing to take risks.' One lawyer outlines a vision for a future where the legal processes are outsourced. ‘Lots of authorities have a shared service to do the bulk of the day-to-day services, such as Section 106, but retaining in-house lawyers for big corporate issues.' Another debater suggests there is an issue in what everyone is trying to achieve: ‘It's about the culture you have in legal services. Are you going to add value or are you going to add to my costs?' As with all services in the current climate, all costs and values will have to be examined. And, as someone asks: ‘Do the public really want more lawyers, or do they want more frontline services?' In attendance: Mark Hynes, Director of legal and democratic services,Lambeth LBC Chris Guy, Head of legal and democratic services, Basingstoke and Deane BC Deborah Collins, Strategic director of communities, law and governance,Southwark LBC Andrew Maughan, Head of legal services,Camden LBC John Suddaby, Head of legal services and monitoring officer, Haringey LBC Ann Charlton, Head of legal services, Surrey CC Quentin Baker, Head of legal services,Cambridgeshire CC Judith Barnes, Partner, head of local government, Eversheds LLP Huw Jones, Partner, HR practice group, Eversheds LLP Steven Smith, Partner, real estate, Eversheds LLP Michael Burton, Editor, The MJ (chair) Heather Jameson, Deputy editor, The MJ

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WHITEHALL

How to prevent shared services

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