To assist in the facilitation of collaborative working in
- local government
- north
Local authorities are, in addition, leading the way through the WLGA’s Regional Partnership Boards with regional co-ordinators appointed to each board, which is also being funded to 2008 by the WAG’s Making the Connections Improvement Fund.
It is one thing for public bodies to investigate whether shared services can deliver savings on paper, but it is another matter for new structures to be put in place to facilitate this. There are political, commercial and legal reasons, among others, that factor in the decision-making and implementation process. Some would say that politics and, most importantly, self-interest would hold things back.
However, comfort may be taken that there are a range of legal structures available to deliver shared services, which can reflect and protect the levels of control and the like of the participating public bodies. It is simplest to group these structures as three basic models.
The collaborative model
Local authorities, for example, working together and delivering services on behalf of other authorities is not new. A number of highways agency agreements date back years and there are a number of authorities sharing service provision from waste through to internal audit, procurement, joint purchasing and customer relationship management services.
There are a number of models which are available within the collaborative umbrella, including:
l sharing assets between local authorities or other authorities and public bodies — for example neighbourhood premises for local authority and healthcare services;
l seconding staff under relevant sections of local government legislation to other local authorities and health authorities and/or joint appointments on a full-time or part-time basis;
l creating a joint committee with its own constitution, so that functions are delegated to the committee and then may be sub-delegated to a sub-committee or officer of one (or more) of the authorities.
Collaboration may involve some or all of these ways of working. Any collaborative arrangement should still be documented as to how costs are shared and who will be responsible for what. However, we would recommend a high level agreement in the form of a memorandum of understanding, concordat, protocol or accord rather than labelling it as a ‘contract’ to avoid the connotation of a contractual arrangement which then brings in public procurement issues, different VAT treatment and other complications.
While an administrative arrangement relies upon public law, it is important to be clear about the operation of the shared services — how long are they intended to last? How will costs be shared? What happens if one partner wishes to withdraw — should the whole arrangement be reviewed? What are the remedies for non/poor performance — arguably this is withdrawal rather than the liquidated damages-type provisions more commonly found in a contract — or should there be active management of performance to ensure some improvement in the near future? What happens to staff and assets in the event of withdrawal/termination should also be covered — for example, should staff be offered priority redeployment opportunities in each of the partner authorities, with a view to minimising costs and liabilities, in the event that arrangements cease?
The contractual model
This is where the relationship constitutes a formal contract between public bodies, or a straight outsourcing of services. Local authorities are very familiar with this model through their contracts with the private sector, so this model can have the advantage that template contracts may exist, and remedies in case of an issue down the line are contractual and clear. However, case law has long since established that even public to public service contracts are subject to the European Union (EU) procurement regime. Such contracts may therefore need to be procured via the Official Journal of the EU and VAT needs consideration.
The corporate model
Local authorities frequently form and participate in companies, but usually do so either with non-local government parties, for example, from the voluntary sector or private sector or individually, without any form of joint venture. The creation of a joint venture company with other local authorities is relatively uncommon yet, with the experience that many authorities across the UK have gained of service delivery through a separate corporate entity and the potential benefits which might arise from service delivery outside of the formal local government structure, some councils are exploring this option as an alternative to either purely administrative or contractual collaboration.
The few shared service examples have not yet been in existence in
Bridgette Wilcox is a commercial partner at Eversheds.