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Councils behind Orbis Public Law shared service to develop ABS business case

The four councils behind the proposed Orbis Public Law shared legal service are to put together a business case for establishing an alternative business structure (ABS).

The plans for an ABS emerged as the full council at Brighton & Hove last week agreed a recommendation from its Policy & Resources Committee to establish a joint committee to act as the governing body for Orbis Public Law, and to appoint the Lead Member for Finance & Resources to be a member of that committee.

Orbis Public Law will also comprise the legal teams at East Sussex, Surrey and West Sussex County Councils. It is due to come into effect on 1 April 2016, subject to due diligence. An unnamed district council had been included in discussions about joining the service, but it would appear that this is not going to happen, at least not at this stage.

The background to the various proposals is contained in a report prepared ahead of a meeting of Brighton’s full council on 28 January and a report and business case prepared for a meeting of the Policy & Resources Committee on 21 January.

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The full council report noted: “Although [Brighton’s Legal Services team] is a high performing service, it is operating at near capacity level with limited resilience. The challenge in terms of capacity will be further accentuated over the coming years as the service has to deliver significant savings at the same time as when the demand for the service is likely to increase.”

A number of options had been considered, namely: remaining as an in-house service; outsourcing; shared services (Orbis); and shared services (Greater Brighton).

The in-house option was deemed to lack resilience when a savings target of 30% over four years was set. The option of outsourcing the function as part of a joint venture with Worthing and other local authorities meanwhile “was not successful”.

The report continued: “The option of a shared service based on the Greater Brighton area was considered, but this would have required a great deal of co-ordination and leadership which was not achievable within the timescales and, in any event, this option is not incompatible with the Orbis initiative, as the GBEB [Greater Brighton Economic Board] option could be pursued from within Orbis Public Law.”

It said that relationships between Brighton & Hove, East Sussex and West Sussex had "always been good" and the Orbis Public Law initiative built on this by taking it to a higher level and bringing in additional authorities.

“The combined service with the four authorities creates a strong geographical block within which Orbis Public Law can operate and reach out to other clients,” the report suggested.

The combined gross revenue budget for the four authorities is reported to be £10.6m with an additional spend of £2m on advocacy and specialist advice. Around £1.5m of external income is generated each year.

The combined workforce at Orbis Public Law will be an estimated 232 staff including 130 solicitors.

The aims of the service are stated to be to:

  • deliver a 10% saving over three years for each of the four constituent authorities;
  • create a resilient, flexible single legal service with a critical mass of expertise; and
  • provide a quality, cost effective service for customers.

The option to progress the Orbis Public Law option was the unanimous view of the senior management of Brighton & Hove's legal team.

On the proposal to develop a business case for an ABS, the full council report said: “It is proposed to set up an ABS to work alongside Orbis Public Law through which legal services could be provided for public bodies beyond the core service provided to the councils.

“Expected changes to the Solicitors Regulation Authority Rules mean that such services could only be provided through an ABS, not by the authorities themselves. Without such a vehicle the ability to generate external income will be severely restricted. It is intended to use the regulated company only for work that the authorities are not permitted to undertake themselves. There are likely to be set up and running costs associated with the company.”

The local authority shared service ABS could be jointly owned by each of the constituent councils of Orbis Public Law, but would need to comply with propriety controls set out by the SRA, the P&R Committee report said. It is not proposed that the ABS will directly employ any staff but the councils will make available professional and support staff to enable the ABS to perform the legal work it has been given.

At the moment the only local authority-owned ABSs are run by HB Public Law, Buckinghamshire Law Plus and LGSS Law. The Cabinet at Essex County Council has backed plans for Essex Legal Services to apply to the Solicitors Regulation Authority for an ABS licence.

READ OUR SPECIAL REPORT: THE LEGAL DEPARTMENT OF THE FUTURE

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