Have shared services reached the tipping point?

Three significant factors may have pushed public sector shared services into real viability?

Over the next 12 months we will be able to judge whether 2011 was the 'tipping point' year for public sector shared services. If it is, then three significant factors will have contributed to it.

First, the publication of the shared services map by the Local Government Association. It shows that 219 councils areengaged in 143 partnerships and evidenced that more than 80 of them are up and running, and have made cashable savings of over £80m to date.

This case study of public sector success was added to by the Universities UK report, Efficiency and effectiveness in higher education, which gives examples of over £100m cashable savings in shared service projects over the past five years. For many this evidence of success and 'banked savings' has been the missing element which has heldsome bodies back from exploring partnership working as an option.

The second event was that shared service project management became a profession. During the year more than 400 leaders and senior managers in local government, fire, police, higher education and further education stepped onto the shared service architect's programme, the first module in the postgraduate certificate in shared services at Canterbury Christ Church University. Those who complete the programme can request to be recognised as shared service practitioners. A number of those have gone on to undertake the full, six-month, postgraduate certificate and will become recognised as shared service architects.

Sir Merrick Cockell, LGA chair and leader of Kensington and Chelsea council, presented the first postgraduate cohort with their graduation certificates in July. Talking to the group, Cockell stressed the importance of training and developing the shared service skills and knowledge of both members and senior managers so that they can deliver the benefits of shared service activity effectively and rapidly. In December, the second cohort received their certificates from Baroness Hanham, Parliamentary Under Secretary of State at the Department for Communities and Local Government. Baroness Hanham echoedCockell, emphasising that shared services can be complex to develop and deliver, and that building public sector shared service skills and knowledge is very important to the success, and rapid delivery, of partnership projects.

The third change has been the announcement by the chancellor in his autumn statement that the government will introduce a VAT exemption for shared services, between organisations in further and higher Education and charities. The inability of these sectors to reclaim VAT on partnership activity has been perceived as a major stumbling block. The chancellor's statement came on the back of more than £16m in partnership seed-corn grants being released into partnership projects during the year by the Higher Education Funding Council for England, the Association of Colleges, the 157 Group and the Learning and Skills Improvement Service. Full story see http://www.guardian.co.uk/public-leaders-network/blog/2012/jan/06/public-sector-shared-services-tipping-point?newsfeed=true