Since the last decade debate about public sector technology and provision has regularly featured the term shared services. With public sector cuts at the core of the current government’s policy as it seeks to reduce the deficit following the bail out of the troubled banking sector, the need and desire to take shared services to the next level is important to business technology leaders in local authorities. One organisation has pioneered the shared service delivery in East Anglia, but as its head of operations tells CIO UK, the IT vendor community is holding back the development of shared services and the adoption of cloud computing.
LGSS is one of the largest public sector shared services organisations in the UK. Run by Cambridgeshire and Northamptonshire County Councils, LGSS also provides services to several other East Anglian and Midlands authorities. Set up in October 2010 LGSS has over 1100 staff and claims to provide the public purse with £11m worth of savings.
A full range of public sector departmental services are provided by LGSS including finance and investment planning, HR strategy and people management; workforce services, employee relations, payroll, pensions, property management, procurement, audit, legal, project management and IT.
Director of OperationsRocco Labellarte, CIO for LGSS explains that in forming LGSS the two local authorities took advice from the Queen’s Council and came up with its existing partnership where work is delegated by each member to each other for legal ease.
“We have one set of priorities, no roadmap, but a long dialogue,” Labellarte says of operating model. “We don’t make a profit, but we cover our costs by doing a lot more, we automate, simplify the services and then with the extra capacity this creates we can take on more work from other authorities.”
Labellarte has been with LGSS from its inception having started his local authority career as Northamptonshire County Council Head of IT in October 2009. He and the senior management team of LGSS are passionate about the need for public sector reform.
Vice chair of the LGSS, Councillor Andrew Langley says: "We have proved the case for sharing services and are actively engaging with other public sector organisations to see how LGSS could benefit them. As LGSS grows so will the economies of scale and all parties will benefit from the reduced costs."
“In government we have to stop being idiots, we are all very similar. For shared services to work we have to be able to aggregate more of our technology, not just networks.
“The appetite for shared services is growing. I passionately passionately believe that the next wave of shared service will be about the integration of authority services. IT should be driving that change. The integration isn’t about cuts, it is about working together.”
But that appetite is being starved by technology providers.
“Suppliers have no interest in aggregation. I have come from the vendor world, I have played the vapourware game,” he says of his career past.
“With the public sector they have an attitude of get one signed up and then move on to the next.
“We as authorities we could do so much with the cloud, but the real problem is that most cloud solutions rely on a contract with a single entity,” he says.
The concept of legal entity, which is common in traditional client server licence models is creating a major blockage to the adoption of cloud computing, both in the public sector and the enterprise market. Organisations cannot rationalise and share in the way vendor marketing departments would have you believe when their single entity agreements prevent it. This is of particular concern in the public sector where the need to rationalise yet not reduce the standard of service is of primary importance.
As technology contracts stand today, the creation of a shared service to allow local authorities to cut costs is very difficult, but also very lucrative to the vendors.
LGSS has three datacentres and believes it should be able to consolidate its technology footprint within these, but the organisation is facing costs of up to £15 million for this consolidation, something Labellarte cannot justify in the current economy.
LGSS doesn’t take for granted how difficult it can be for local authorities to merge parts of their operations. Labellarte describes the process as being like the process of marriage as the partners move from being single to engaged, living together and then marriage.
“It’s not easy, it’s hard work getting these big organisation round the table, working together and designing solutions that will work,” he says.
As a partnership LGSS has a single Oracle platform, hosted by Fujitsu that both Cambridgeshire and Northamptonshire use and make savings from.
“It has worked incredibly well. But in the case of IT, as similar as the organisations might be, you cannot just throw them together or treat it like a hostile take-over. So you have to walk a fine line, as the teams have pride and ways of doing things,” he says.
“We as local authorities provide citizen services with support from taxpayers. You can only do citizen services like social care locally, the same for environmental and transport needs, but IT is just the fourth utility,” Labellarte says of the important role local authorities play in our national community, but also the need for IT services to those authorities to be no different to the way they consumer electricity.
“Take care systems, for example: there are only a limited number on the market, but every authority seems to have a very different example,” he says of the overly customised landscape in UK authorities, in part created by the vendors, their licensing models and sales techniques.
“The key driver for shared services in the government is a reduction in back office operating costs. The second driver is to improve the quality of service,” but it is clear from talking to LGSS that the drivers for cost reduction and improvements in service are being hampered by a technology industry that has for too long seen the public sector as a cash cow. Asked if push comes to shove and authorities will be bold and move away from stalwart providers like Oracle and Microsoft Labellarte thinks it just may happen – out of necessity.