Three London councils pursue combined services in bid to save £35m a year
Three London boroughs have set out radical proposals for combining back office and management services, claiming the shake-up could deliver up to £35m in savings a year.
The plans unveiled by Hammersmith & Fulham Council, the Royal Borough of Kensington & Chelsea and Westminster City Council include legal services.
If given the green light, it is thought likely that Hammersmith & Fulham and Kensington & Chelsea – which already share a monitoring officer – would combine their legal departments first.
Between them, the three authorities employ 70 lawyers, 19 legal assistants and 31 support staff. Their current legal spend is more than £10.8m, divided as follows:
- WCC: £4.8m (includes internal, external spend and counsel fees)
- LBHF: £3m (in-house plus counsel)
- RBKC: £3m (in-house plus counsel)
“Key areas for potential savings are in combining legal advice, rationalising external suppliers and creating a stronger intelligent client function,” the report said, adding that a 10% saving would equate to £1m and a 20% saving to £2-3m.
“Further work is required on the structure that will best optimize the opportunities for savings, looking at both internal and external options,” the report suggested.
The package of proposals, which will be discussed at the councils’ respective cabinets over the next 12 days, would see the number of chief executive posts reduced from three to two.
Children’s and education services would meanwhile be combined under a single director. Assessment of children at risk will still be done on a borough basis, but specialist functions and management will be combined.
Adult social care will also be combined with a single director in charge of commissioning services. The councils said discussions were also underway with Central London Community Healthcare NHS Trust “about working closely with GPs in providing integrated community health and adult social care services across the three areas".
Staff involved in the provision of social care services could transfer into one or more new joint units alongside NHS staff with similar responsibilities, the report said. It added: “This will promote closer working; providing opportunities for smarter procurement and the delivery of more co-ordinated and less wasteful service to those in need.”
A tri-borough library service – but with individual council branding – has been suggested, with a future option of transferring the service to external management (“perhaps through a charitable trust”).
A number of other services will be operated on a tri-borough basis, including IT, HR, facilities management and insurance. Some environmental services will initially be combined only across two boroughs, including leisure, highways, transport and parking correspondence. A recommendation has been made to the three cabinets that they look at moving towards a single management team for the “environment family of services” in the future.
Six other services are under consideration for future integration. They are: customer services, waste management, street cleaning, contingency planning, CCTV, environmental health and parks management. The three councils believe there is an opportunity for a future joint procurement in waste management, the largest area of spend in environmental services, but this will not be “until some years hence”.
The following services are viewed as unsuitable for integration:
- Planning
- Licensing
- Housing and regeneration
- Culture
- Policy/communications
- Governance
- Housing benefit services.
The plans envisage major savings in management costs. According to the report, the aims are to: reduce the number of middle and senior managers overall by 50%; reduce overheads on direct services by 50%; and ensure that by 2014/15 the costs of overheads and middle and senior management are a smaller proportion of total spend than in 2010/11.
A so-called “Sovereignty Guarantee” has been signed by the three councils and is intended to safeguard local autonomy, responsiveness and identity. The three authorities will also retain their own councillors and decision making processes.
Detailed implementation proposals will be drawn up if the councils’ respective cabinets give the plans the go-ahead. Consultation will then take place with staff, unions, residents and community leaders.
The proposed timetable would see the changes phased in from May 2011, “with long-term interim appointments in key areas to provide continuity during a period of change”.
Cllr Sir Merrick Cockell, Leader of Kensington & Chelsea, insisted that the councils were committed to localism. Combining services would increase their ability to respond and engage on local issues and ensure a greater share of resources going to the frontline, he said. “These proposals offer significant opportunities to save many millions of pounds for our taxpayers.”
Cllr Stephen Greenhalgh, Leader of Hammersmith & Fulham, rejected the suggestion that the authorities were setting up a ‘super council’. “We are creating three slimmer councils with combined resources and expertise,” he argued. “Our residents should not notice the difference except in areas such as adult social care where there will be a marked improvement because we are able to fully integrate health and social care.”
Philip Hoult
