Shared Support Services Partnership Business Case

1 Purpose .............................................................................................................................. 3

2 Executive Summary .......................................................................................................... 3

3 Background and Approach ............................................................................................... 4

4 Baseline Budget ................................................................................................................ 5

5 Preferred Option - Partnership Model .............................................................................. 6

Formal Support Services Partnership .................................................................................. 7

Financial Model ................................................................................................................. 10

Informal Partnership Working ............................................................................................ 11

Organisational Impacts ...................................................................................................... 12

6 Service Design ................................................................................................................. 12

Shared Information and Technology Services ................................................................... 12

Shared Human Resource and Payroll Services ................................................................. 14

Shared Facilities Management Services ............................................................................ 17

Shared Print and Design Service ....................................................................................... 19

Shared Business Improvement Service ............................................................................. 22

Customers ......................................................................................................................... 22

Quality, Performance and Resilience ................................................................................. 22

7 Alternative Options & Future Considerations ............................................................... 23

Alternative Partnership Models .......................................................................................... 23

Hertfordshire County Council Shared Human Resource Services ..................................... 24

Shared Managed Services and Outsourcing ..................................................................... 24

8 Financial Case ................................................................................................................. 24

Financial Savings .............................................................................................................. 24

Implementation Costs ........................................................................................................ 25

Savings and Investment Profile ......................................................................................... 27

9 Transition and Implementation Approach ..................................................................... 27

Consultation with Staff and Unions .................................................................................... 27

Timeline and Approach ...................................................................................................... 28

10 Risks ................................................................................................................................ 31

11 Legal Considerations ...................................................................................................... 32

Human Resource Considerations ...................................................................................... 33

Procurement ...................................................................................................................... 33

Equalities ........................................................................................................................... 33

12 Conclusion ....................................................................................................................... 34

Appendices ................................................................................................................................. 35

Appendix A – Baseline Budgets ........................................................................................ 36

Appendix B - Partnership Principles and Key Characteristics ............................................ 39

Appendix C – Partnership Agreement Summary Outline ................................................... 41

Appendix D – Current Senior Management Structures ...................................................... 43

Appendix E - Orphaned Services ...................................................................................... 47

Appendix F – Services List ................................................................................................ 48

Appendix G - Savings and Investment Profile .................................................................... 52

1 Purpose 1.1 This business case assesses the options and preferred model for support service partnership

between East Herts Council, North Hertfordshire District Council and Stevenage Borough

Council.

1.2 The assessment of partnership options follows the decision in 2011 by each authority’s

Executive / Cabinet that sharing could be a viable option for the support services. A decision

is now required on whether to deliver the following services in partnership:

� Information and Technology (IT)

� Human Resources and Payroll

� Facilities Management

� Print and Design

� Procurement

� Estates 1

� Health and Safety 2

� Business Improvement 3

2 Executive Summary 2.1 Analysis of the options demonstrates that partnership would deliver benefits to all three

authorities with estimated net revenue savings in the region of two and a half million pounds

over 5 years, shared between the three authorities.

2.2 There are significant benefits for all three authorities working in partnership for the delivery of

core services which support the front line. Partnership enables robust and resilient services,

greater expertise, economies of scale which retain key service standards at a lower cost.

2.3 Partnership offers a unique opportunity to maintain the close relationship with the rest of the

services within each authority whilst maximising these benefits and obtaining levels of

efficiency not achievable individually as three authorities.

2.4 A combination of formal and informal sharing arrangements are proposed, taking into account

the authority’s business and individual service requirements.

� For the majority of services in scope (IT / Human Resources and Payroll / Facilities

Management / Print and Design / Business Improvement) a formal partnership is

proposed. Governed by an Officer Board and retaining the existing individual authority

Member and Scrutiny arrangements. The services would be located in Letchworth and

Stevenage hosted by North Hertfordshire District Council and Stevenage Borough Council

with onsite presence at all three authorities and home working arrangements where

appropriate. It is proposed that there is a single employer for all staff in the partnership,

which is Stevenage Borough Council.

� For Procurement, informal shared service arrangements are proposed, with greater

collaboration between the procurement teams in the three authorities, providing resilience

benefits and maximising joint procurement opportunities.

� For Estate Management and for Health and Safety informal shared service

arrangements are proposed between East Herts Council and North Hertfordshire District

Council only, giving greater resilience for both authorities.

1 For East Herts Council and North Hertfordshire District Council only

2 For East Herts Council and North Hertfordshire District Council only

3 For East Herts Council and Stevenage Borough Council only

3 Background and Approach 3.1 There are a growing number of shared service arrangements elsewhere in the Public Sector.

The recent Local Government Association study and update of the national Shared Services

Compendium identified 219 Councils engaged in 143 shared service arrangements resulting

in greater than £150million efficiency savings from completed and developing shared service

arrangements.

3.2 The three authorities have a successful history and good track record of working together for a

range of services. Established shared services include CCTV and Building Control

partnerships and most recently the Shared Internal Audit Service (with Hertfordshire County

Council and two other Districts) and for East Herts Council and Stevenage Borough Council

the Revenues and Benefits Partnership.

3.3 There are also other successful partnership arrangements in place within Hertfordshire, the

Watford and Three Rivers partnership in particular delivers a similar range of support services.

3.4 The approach to exploring partnership opportunities is based on best practice from

Improvement East, Shared Services Architects and other authorities who have successfully

implemented shared services. In summary, the roadmap for considering partnership options

is:

3.5 Project assurance has been ensured by applying the lessons learnt from previous shared

services and similar organisational changes, and by bringing in external expertise where

required in particular financial analyst and human resource consultant.

3.6 Work has been undertaken by a joint programme team established for this purpose which

brings together staff from the three authorities and external experts. The team reports to a

joint Programme Board comprising of the Chief Financial Officers from each authority.

3.7 The preferred model for shared support services has been developed by the Programme

Board and senior management teams in each authority, based on proposals developed

through workshops and analysis undertaken with the specialists nominated by each authority.

3.8 Workshops undertaken in 2011 analysed the current services, established the commonalities

and differences between the services in each authority and identified potential future options.

3.9 Following the Strategic Business Case and agreement in October / November 2011 that

sharing could be a viable option for the support services further engagement has taken place

which included analysis of the following:

� Suitability of different IT infrastructure models, and design of a potential single IT data

centre, implementation timescales and costs

� Suitability of a business partnering model for Human Resources

� Harmonisation of the Print and Design services across the authorities

� Analysis of Facilities Management contracts and contract management arrangements

� Suitability of formal and informal sharing arrangements and delivery model options

� Financial savings, resilience and other benefits which shared services delivers

4 Baseline Budget 4.1 The baseline budget for the support services has been jointly agreed by the authorities. The

budget and potential savings options have been analysed to ensure a like for like comparison

taking into account the commonalities and differences between the support services in each

authority. The few assumptions in each authority’s Medium Term Financial plans for future

years have also been taken into account in the analysis.

4.2 The financial assumptions for creating the business case have been made using 2012-13

budgets for the services in each authority. The baseline costs for the services in each

authority differ, reasons for this include:

� Changes over recent years to deliver efficiency savings. In particular for East Herts

Council Human Resources, North Hertfordshire District Council IT and Facilities

Management services and for Stevenage Borough Council IT services.

� Different organisational business requirements and headcount. The headcount for

Stevenage Borough Council in particular is almost double the other two authorities with

in-house services for Housing, Grounds Maintenance, Street Cleansing, Refuse and

Recycling.

� Different delivery models and the degree to which contract services are in place, in

particular for Stevenage Borough Council and North Hertfordshire District Council building

compliance services (within Facilities Management) and for East Herts Council

recruitment services (within Human Resources).

4.3 The table below summarises the controllable revenue costs of the services.

Controllable (Direct Revenue) Costs: Formal Shared Service Proposals

Costs £000’s (rounding has been applied)

Service EHC NHDC SBC Combined

IT £762 £560 £713 £2,035

Human Resources and Payroll £238 £452 £577 £1,266

Facilities Management £499 £182 £370 £1,051

Print and Design £389 £338 £377 £1,103

Business Improvement n/a n/a £315 £315

Subtotal (formal sharing) £1,888 £1,532 £2,352 £5,770

Procurement £43 £18 £72 £133

Estates Management £132 £107 n/a £239

Health and Safety £46 £41 n/a £86

Total: £2,109 £1,698 £2,424 £6,228

4.4 Some of the support services manage significant additional costs including capital and

corporate revenue costs such as premises, training and ICT systems. ‘Appendix A – Baseline

Budgets’ outlines the direct and managed costs for each service.

5 Preferred Option - Partnership Model 5.1 This section sets out the proposed model for delivering the support services. Implementation

costs, approach and timeframes are set out in the ‘Section 9 - Transition and Implementation’

below.

5.2 The proposals are for formal sharing for the majority of the services, with informal sharing

proposals for Procurement, Estates Management, Health and Safety.

5.3 The foundation for the preferred option is the Partnership Principles and Characteristics

agreed between the three authorities, taking into account the service specific requirements,

organisational fit and relationships with both frontline and other internal services. These

principles are set out in ‘Appendix B – Partnership Principles and Key Characteristics’.

5.4 In summary the proposed formal partnership model is for:

� Governance through an officer board, with the existing Member arrangements retained in

each authority

� Senior Management structure consisting of two Heads of Shared Service

� Services located in Letchworth Garden City and Stevenage

� A single employer for all staff within the partnership

5.5 The support services have been considered as one single unit due to the interdependencies

between the services, options at a senior management level and to enable cross-over

between the services. Sharing of existing good practice and the ability to retain, afford and

share key expert skills are also important. A single partnership maximises these benefits for

all the support services.

Formal Support Services Partnership

5.6 The preference is to deliver the following services through a formal partnership:

� IT

� HR and Payroll

� Business Improvement 4

� Facilities Management

� Print & Design

5.7 The partnership would operate as a single shared service, with teams delivering the services

on behalf of the three authorities.

Governance Arrangements and Partnership Model

5.8 The overall partnership model and the governance arrangements have been considered

carefully by the management board of each authority. A single shared service provides

resilience at a management level and encourages cross over between the support services,

leading to efficient business processes.

5.9 The proposed management arrangements are for an Officer Board, comprised of one

Director from each authority and with decisions taken by these lead Directors for each

authority, given that the current local government arrangements do not allow for delegation to

a joint officer board. The board will direct the delivery of the shared support services, maintain

a close relationship with and report to the Senior Management board5 in the partner

authorities.

5.10 The existing Member arrangements will be retained and Members with portfolio

responsibility for the support services will work as currently with Directors and Heads of

Service. Proposals relating to the services would be taken to Cabinet, Executive or other

Committees.

5.11 The services will be subject to Scrutiny and other call in arrangements within each authority,

and it is agreed that all partners will be notified prior to any scrutiny review.

4 For East Herts Council and Stevenage Borough Council only

5 East Herts Council’s Corporate Management Team (CMT) & Senior Management Team (SMG) / North Hertfordshire Council’s

Senior Management Team (SMT) / Stevenage Borough Council’s Senior Management Board (SMB) and Senior Management Team (SMT)

5.12 These governance arrangements are similar to existing arrangements and it is expected that

strong relationships will continue to be maintained between the Heads of Services, Members,

Management Boards and wider management teams. The proposed model is flexible and

provides the opportunity to adapt to meet the future and changing requirements of the

authorities.

5.13 The governance arrangements will be established through a partnership agreement between

the authorities, this will be agreed by the Chief Executive and Directors of each authority, in

consultation with relevant Portfolio Holders, as part of the transition to shared services. An

indicative outline of the protocols are set out in ‘Appendix C – Partnership Agreement

Summary Outline’

Senior Management Structure

5.14 The proposed management structure is for two Heads of Shared Service, reporting to the

Shared Services Officer Board. The diagram below sets out the indicative management

structure:

Officer Board

Working closely with the management

board of each authority.

Head of Shared Human

Resources & Organisational

Development Services

Human Resources,

Organisational Development,

Payroll

Facilities Management

Information & Technology

Business Improvement

Print & Design

Head of Shared Facilities, IT,

Improvement & Print Services

5.15 This senior management arrangement is both robust and appropriate for these services in the

current financial climate. The Heads of Shared Service will work closely together to provide a

unified approach to delivering shared support services to the partner authorities.

5.16 It is envisaged that the Shared Heads of Service will be supported by strong management

teams in each of the services, allowing the Heads and their managers to operate effectively

across the partner authorities. The shared service management teams will provide resilience

and the appropriate balance between professional and broader management skills.

5.17 For Human Resources in particular the proposed move to a Business Partner model provides

significant resilience, maintains the close relationship with the business and enables flexibility

to provide management support at a level appropriate to each authority.

Financial Assessment – Proposed Management Structure

5.18 The current management arrangements differ in each of the authorities. ‘Appendix D –

Current Senior Management Structures’ sets out the current senior management

arrangements for Chief Executives, Directors, Assistant Director, Head of Service and first

reports responsible for the support services.

5.19 The total cost of the current Head of Service (and equivalent) senior managers in the three

authorities is set out in the table below. These represent the costs of the four senior

management posts considered directly in scope of shared support services.

Support Service Senior Management (Head of Service and Equivalents)

On-costed costs £000’s (rounding has been applied)

EHC NHDC SBC Combined

Senior Management Cost £76 £76 £154 £306

5.20 The proposed move to Heads of Shared Service would result in an estimated saving of

£144,000 which equates to 47% of the total senior management combined costs. The

majority, £99,000, of which is attributable to changes to the senior management for Human

Resources and Payroll services.

5.21 Some of the authorities also have management (Head of Service and Equivalents) posts

considered to be ‘affected’ by the proposals. For the purpose of this business case these

posts are excluded from the assessment of senior management costs.

Employer

5.22 It is proposed that all staff within the partnership are employed by a single employer,

Stevenage Borough Council which is the authority where the largest proportion of staff

would be located.

5.23 There are significant benefits of a single employer model, compared to separate employers for

each service. A single employer model enables a common approach to management of staff,

with all staff within the partnership working under a single set of policies, promoting good team

dynamics and working relationships. In addition, roles which cross over between the services

(both management and operational roles) are more effectively managed without the additional

complexity of two or more employers.

Location and Host Authorities

5.24 The employer and location options have been analysed, taking into account both the service

delivery requirements and the potential impacts on staff. The proposed locations minimise the

impacts on staff whilst enabling the potential economies of scale to be maximised.

5.25 A dual location for the support services is proposed, with:

� IT, Business Improvement, Human Resources and Payroll located in Stevenage

hosted by Stevenage Borough Council

� Facilities Management, Print and Design located in Letchworth hosted by North

Hertfordshire District Council

5.26 Each service will have a ‘hub’ at the above location with appropriate onsite presence

maintained across all three authorities. Remote working and site visits will ensure that

customers in each authority are fully supported and business requirements are understood.

For Facilities Management in particular there is a long term need for operational staff to

continue to be located on site at each individual authority.

5.27 Home working will be maintained where this is currently a part of someone's contract of

employment, or potentially introduced, subject to the needs of the service and taking into

consideration staff requirements.

5.28 The timing of staff relocation is recognised as a critical factor for both staff and for business

continuity, this will be carefully managed through the transition and implementation.

Financial Assessment – Proposed Location

5.29 The three authorities are each in discussion with Unions regarding disturbance policies for

staff. The financial and other relocation impacts are being reviewed and are subject to these

negotiations.

5.30 Analysis has been undertaken based on the proposed policy. This analysis indicates that the

proposed dual location (of Stevenage and Letchworth) result in estimated disturbance

payments in the region of £15,000 per annum. This projected cost is based on the proposed

inter-authority policy and therefore should this not be agreed, this cost may be greater.

5.31 The assessment assumes that working from home is an appropriate option for some staff and

that the location for a proportion of the Facilities Management staff remains unchanged.

There are potentially one off and annual costs associated with introducing home working

arrangements.

Future Growth Options

5.32 The proposed partnership model is scalable and offers opportunity for future growth, with

opportunities to add additional services or new partners in future years should the authorities

choose to expand the partnership.

Potential Future Separation of the Partnership

5.33 The potential future separation of the partnership has been considered and key impacts

identified, based on the scenario of one or more authorities wishing to leave the partnership:

� Staff related impacts and the potential need to transfer staff between authorities, the

implications and approach would be dependant on the departing service / authority and

would be assessed at that time.

� IT infrastructure impacts and the possible need to purchase, or transfer, equipment and

software to the departing authority. It is recognised that this would be complex with

possible costs incurred by the departing authority and / or the remaining authorities.

� Data and IT systems would be relatively easily transferable to the departing authority

should this be required.

5.34 These impacts would only occur if one or more authorities chose to leave the partnership and

will be detailed in full in the partnership agreement.

Financial Model

5.35 In summary it is proposed that the direct budgets for the services are held by a single

authority, with the managed budgets retained by each individual authority.

5.36 The direct budget, including all staff related costs, relating to the shared service are held by a

single authority, Stevenage Borough Council.

5.37 The budget holding authority will provide accountancy support to the shared service which can

be can resourced within existing accountancy resources.

5.38 Accountancy processes will be streamlined to minimise duplication within the partnership and

the authorities. Key accountancy processes, including authorisation and approval processes,

will be outlined in the partnership agreement.

5.39 The managed budgets relating to each service would continue to be owned the by the

originating authority, with spend directed by the relevant Head of Shared Service. Budgets

managed in this way would include:

� IT application support and maintenance costs

� Corporate training budgets

� Premises costs, including contracts or rates relating directly to specific buildings

Informal Partnership Working

5.40 The preference is to deliver Procurement, Estates Management, Health and Safety through

separate informal partnership working arrangements. Informal partnership working is

considered appropriate for these smaller teams.

5.41 There are currently no proposed changes within this business case to the employer or location

for these services.

5.42 The services are currently robust, with good practice evident in all three authorities. However,

each service is small, with in some cases individual officers delivering the service which

present resilience risks for the future. Informal sharing is suitable for these small teams of

specialists, building upon the existing professional relationships and mitigating the reducing

resilience.

5.43 East Herts Council and North Hertfordshire District Council already share a procurement

officer and the proposed new wider collaboration will enhance this arrangement and also

provide additional capacity.

5.44 The key benefits of informal sharing for these services are increased resilience within these

smaller teams and increased opportunity to share best practice.

5.45 The key principles for the informal partnership arrangements will be:

� The Procurement services will seek to maximise joint procurement benefits, in particular

on the facilities management and other contracts managed through the shared service.

The teams will seek to lever greater buying power by combining the requirements of three

authorities, continuing to ensure that the contracts deliver the quality of service required

by the authorities.

� Sharing Estates Management6 best practice will be a key focus, in particular for

optimising income (and usage) from the estate. Enabling the specialist officers to work

more closely together supports this and also creates opportunities for economies of scale,

in particular in the maintenance and management of asset register data and IT systems.

� Health and Safety7 services which combine local expertise and the ability to react quickly

to local situations with shared best practice providing further assurance and resilience.

The service will work closely with the proposed shared Facilities Management service to

monitor staff impacts of building related health and safety

6 In East Herts Council and North Hertfordshire District Council 7 In East Herts Council and North Hertfordshire District Council

5.46 The work to identify key sharing opportunities and establish an efficient approach to informal

sharing will be taken forward by the senior managers responsible for the services. The

arrangements will be reviewed regularly with options and proposals taken to the management

board in each authority, or the Shared Services Board as appropriate.

Organisational Impacts

5.47 The consequential impacts of the proposed move to shared support services have been

identified and reviewed by the management board in each authority. The degree to which

each authority is impacted differs and new arrangements are proposed which are suitable to

the individual authorities.

5.48 There are services in each authority which are affected by, but not directly in scope, of the

proposed shared service. These services which currently report into management roles in

scope of the proposed changes are referred to as ‘orphan’ services and are outlined in

‘Appendix E – Orphaned Services’. The majority of the orphaned services are managed

within specialist teams and there is a high level of confidence in the ability to move to the new

arrangements with minimal disruption or business continuity risks.

5.49 In addition, the new arrangements for the support services will need to be embedded within

each authority’s organisational culture, ensuring the support services continue to work closely

with and are viewed as part of the organisation.

5.50 A key aspect to this is identifying efficient and robust business processes for performance and

financial governance, internal customer interactions and building strong relationships with

management teams. This will be taken forward by the Shared Services Board working

closely with the wider management boards.

6 Service Design 6.1 The sections below outline the proposals for each support service within the preferred formal

partnership model. These proposals build upon the knowledge and expertise within each

authority and are underpinned by the move to shared senior management.

6.2 The proposals for each service are indicative only at this stage and the detail will be

developed following the move to shared senior management and in consultation with staff and

unions.

Shared Information and Technology Services

6.3 IT in each authority is responsible for the procurement, implementation and day to day

management of core infrastructure, such as servers and network links, as well as the support,

implementation and development of business applications, such as Finance, Environmental

Health, Council Tax and Benefits systems. Between them, the IT services support more than

1,400 desktops, Members IT and a varying range of other equipment such as telephones,

printers and audio visual equipment.

6.4 IT service managers are responsible for ensuring that systems meet stringent external

security requirements to protect data while also delivering resilient services that enable staff to

work flexibly and efficiently.

6.5 Although management structures for IT differ across the three partner authorities, all three IT

services work in similar ways and utilise similar technology, particularly at the core

infrastructure level.

6.6 The overall principles for a shared IT service are:

� A commitment to strong customer service delivered in part through a shared IT help desk

and improved opportunities for self service.

� A continued on site presence in each authority to support local IT needs

� A robust and resilient infrastructure which minimises the costs of day to day management

� A shared resource to deliver more efficient applications support and IT development work,

with flexibility for demand led development and delivery of project work.

� The potential for future move towards shared business applications as and when

applications require replacement or if business cases exist to procure joint systems sooner

6.7 The foundation of the partnership proposals is the development of a centralised data centre to

accommodate the IT for all three authorities. A high level design for a single data centre has

been developed by the three IT teams, using infrastructure technology that is similar to or the

same technology currently used by the three teams. The principles to be adopted when

designing the data centre are as follows:

� A common and simplified model making it easier and more cost effective to train staff and

provide resilience

� A reduction in the cost of managing the infrastructure day to day

� A reduction in future investment as work is done once for one large network rather than

three individual networks

� A service that is modular and scalable to provide flexibility for customers and which will

allow further services or partners to be included straightforwardly

� Transparency regarding cost and resource usage

6.8 An initial assessment, based on the high level design, is that the data centre would be

implemented by March 2014. There is a high level of confidence in this design, timescale and

related savings. Although the work to implement a data-centre is complex, it amounts to a

reconfiguration of technology which staff are already familiar with, rather than the

implementation or development of new technology.

6.9 The design options will be refined, detailed planning and risk assessments undertaken, and

the options reviewed by the programme board prior to the commencement of the

implementation project. The project will be supported by a technical IT Services Manager with

experience of delivering shared IT services projects.

6.10 The estimated revenue savings, including a proportion of the senior management related

savings are £460,6658 which equates to 23% of the baseline budget for IT. The main

dependency for the delivery of savings is the investment, in the region of £987,000, and the

time required to implement the data centre in full.

6.11 The implementation costs for the proposed data-centre are provided in ‘Section 8 – Financial

Case’.

8 £460,665 service related savings plus a proportion (£15,000) of the senior management related savings

6.12 In addition to the financial benefits each authority will further benefit through greater resilience.

Under these proposals there will be a much reduced risk of system downtime because larger

numbers of staff will be fully trained to support the key technologies upon which the new IT

network will rely. All three partners are currently reliant upon small numbers of technical staff.

6.13 It is proposed that shared IT is managed alongside Facilities Management, Business

Improvement, Print and Design, maintaining the important links between these services. An

indicative structure for Shared IT Services is summarised below, any proposals related to staff

changes will be developed following the transition to shared senior management and through

consultation with Staff and Unions.

Head of Shared Service

Shared IT Management Team

Shared Infrastructure Teams Shared IT Service Desk Shared Information Systems Teams

6.14 The IT services in scope of shared support services are:

IT Service Area IT Service Function

Cross Cutting Strategy and Management

Procurement and Contract Management

Service Desk

IT Project Management

Infrastructure Desktop / Mobile Equipment

Network and Communications

Infrastructure Management

Operations Management

Security

Business Applications

Database Administration

Application Support

Application Development

Systems Administration

These services are described in more detail in ‘Appendix F –Services List’

Shared Human Resource and Payroll Services

6.15 The Human Resource and Payroll service provides strategic and operational advice and

support in each authority. The services are responsible for policies on attraction, selection,

training, assessment and reward of employees. The service also supports the authority’s

leadership and culture, and ensures compliance with employment law.

6.16 The customers of the service are the Members and internal staff of the three authorities, with

approximately 1,480 staff in total.

6.17 The delivery model in the authorities differs with Payroll services in Stevenage Borough

Council managed separately to Human Resources. The method and approach to customer

interaction also differs across the authorities, with self service models in place to differing

degrees. However the same core service is delivered within each authority.

6.18 The core proposals are for shared a Human Resource and Payroll, based upon the following

key principles:

� Business partnering, with strategic advice and support from professional Human Resource

officers.

� Managing transactional and administrative elements of the service once for three

authorities, gaining economies of scale and increased resilience

� Learning, development and resourcing to ensure that skills of staff remain up to date and

relevant

� Focusing customer interaction through an advice line and self service to provide timely

access to information and advice, underpinned by a single Human Resources and Payroll

System

� Manage delivery of key organisational change through specialist project teams as required

by authorities individually or jointly.

6.19 The business partner model represents a shift in operational people responsibilities within the

service and, in particular, to managers in the organisation. It is a proven delivery model for

Human Resource services and reduces cost by focusing expert professional officers on the

more complex areas of service delivery.

6.20 A strong business partner team is key to supporting the senior management teams, with the

Head of Shared Service supported by senior business partners to provide dedicated support

to each authority.

6.21 Payroll and other transactional, administrative and routine processes benefit significantly from

the economies of scale achieved through shared services. The larger volume of transactions

processed within the shared services enables more efficient processing than is achievable

within the individual authorities.

6.22 Channelling customer interaction through an advice line and self service in the first instance is

the most efficient method of supporting customers and providing timely and accurate advice.

Clear escalation to business partners or other senior officers ensures that complex advice

needs are also met.

6.23 The development of staff skills, through appraisals, competency frameworks, training and

Investors in People are key to ensuring that the skills of staff remain up-to-date and relevant.

Planning and managing the delivery of training and learning once for three authorities

provides greater resilience.

6.24 It is recognised that the shared Human Resource service would need to be underpinned by a

single Human Resource and Payroll system that holds all data securely. The transactional and

customer interaction benefits in particular are reliant on this.

6.25 The estimated revenue savings, including a proportion of the senior management related

savings are £199,0009 which equates to 16% of the baseline budget for Human

Resources and Payroll. It is anticipated that the ratio between Human Resource and

organisational headcount would change as a result of the proposals.

6.26 A shared Human Resource and Payroll service would also enable further opportunities to be

explored, including:

� Jointly sourcing training, learning and development with current spend on corporate

training estimated at over £150,000 between the three authorities. In particular joint

specification of training, where business needs align, and further utilisation of the

Hertfordshire County Council led training framework present key opportunities.

� Options for combined procurement of services such as occupational health, employee

assistance and other external services required by the authorities.

� Review of recruitment, whether delivered internally or through recruitment contracts,

benefits from economies of scale - the shared service provides opportunity to consider a

wider range of models for recruitment. For East Herts Council in particular shared services

provides an opportunity for smooth transition when the framework agreement for the current

Manpower contract for recruitment services ends in 2013.

6.27 It is proposed that shared Human Resources and Payroll services are managed as an

individual service unit within the shared service, but that close relationships between

organisational change and Business Improvement is maintained. An indicative structure for

shared Human Resource and Payroll Services is summarised below, any proposals related to

staff changes will be developed following the transition to shared senior management and

through consultation with Staff and Unions.

Head of Shared Service

Business Partner Teams Payroll and Transaction Teams

Learning, Development and Resourcing Specialist Project Teams (as required)

6.28 The Human Resource and Payroll services in scope of shared support services are:

Service Function

Strategic Human Resource and Organisational Development

Service Management and Management Information

Human Resource Advice

Payroll

Reward

Learning and Development

9 £100,000 service related savings plus a proportion (£99,000) of the senior management related savings

Service Function

Occupational Health 10

Resourcing

Employee Relations

These services are described in more detail in ‘Appendix F –Services List’

Shared Facilities Management Services

6.29 Facilities Management are responsible for the buildings and building related services,

including ensuring compliance in terms of building related health and safety. Operational

buildings require the full range of facilities management services and other buildings in the

estate require fewer services, usually only building compliance.

6.30 The management arrangements differ across the three authorities: in East Herts Council the

service is managed alongside Print; in North Hertfordshire District Council it is within Finance,

Performance and Asset Management; and in Stevenage Borough Council it is within Property

and Estates. However, there are commonalities in the core facilities management services in

the three authorities.

6.31 A shared facilities management service enables shared best practice, process efficiency and

joint procurement to be maximised whilst retaining quality of service, shared management is

an effective way of embedding positive changes and establishing collaborative working as ‘the

norm’. A formal arrangement is proposed as informal sharing and collaborative working is not

an efficient way to realise these opportunities.

6.32 The key principles upon which the shared Facilities Management service would be based are:

� Joint procurement to give economies of scale and greater buying power, with some joint procurements already underway (and for North Hertfordshire District Council and Stevenage Borough Council, joint frameworks already in place) helping to build a positive starting point

� Site specific services, delivering operational facilities management including reactive maintenance locally through standardised processes at the standard required by each authority

� Shared compliance and contract management, working closely with the site specific teams to ensure contracts are fit for purpose, opportunities are realised and compliance standards maintained, retaining a high level of both compliance expertise and contract management skills.

� Joint service desk to provide support and advice to customers.

6.33 Site specific teams based locally in each authority will deliver day to day operational services,

with the benefit of shared best practice through shared management. In addition there is a

high level of flexibility for authority or building specific standards and services to be

accommodated.

6.34 The baseline budget for facilities management is £1,051,000 with a further £2,717,000

managed by the services. A large proportion of this managed budget relates to direct

premises and contract costs, including rates or long term contracts which are not currently

considered controllable.

10 For North Hertfordshire District Council and East Herts Council only

6.35 The estimated revenue savings, including a proportion of the senior management related

savings are £128,19511 which equates to 12% of the baseline budget for Facilities

Management. An additional £40,000 of contract related savings is also estimated but this has

not been included in the financial savings profile.

6.36 The direct budget savings identified include options for improving the efficiencies within the

following key areas, it is proposed that these be explored in detail by the shared Facilities

Management Team:

� Shared management and contract management, exploring opportunities for managing

contracts once on behalf of all three authorities including contract specification,

procurement, supplier management, invoicing and order processing. The Facilities

Management teams are already working jointly on procurement of cleaning contracts for

2013-14. In the longer term further reductions in contract costs are anticipated once key

contract renewal dates are reached.

� Building compliance, including longer term opportunities for review of the way compliance

work is contracted and options for taking a common approach for all three authorities. With

current compliance contracts for two of the authorities are due for retendering from 2014,

with options to renew for up to 2 years, it is an opportune time to consider joint procurement

options.

6.37 The contract related savings relate to a range of contracts including catering and vending,

cleaning and water coolers.

6.38 In addition a larger Facilities Management service with greater potential to employ specialists

will also enable the authorities to investigate and deliver savings in other areas which have not

been analysed as part of this business case, in particular these will include:

� Energy management, with current spend across the three authorities exceeding £350,000

� Building Health and Safety Compliance which is currently delivered through different internal and contractual arrangements in each authority, with current spend in the region of £400,000

� Postage cost volume discounts, by managing outgoing post once for the three authorities to maximise post service volume discounts. Outgoing post for the authorities is currently in the region of £200,000 per annum.

6.39 It is proposed that shared Facilities Management services are managed alongside IT,

Business Improvement, Print and Design, maintaining the links with IT and Print. In

particular the cross over between Facilities, IT and Print operational support may be increased

as equipment and technology changes. An indicative structure for shared Facilities

Management Services is summarised below, any proposals related to staff changes will be

developed following the transition to shared senior management and through consultation with

Staff and Unions.

Head of Shared Service

Shared Facilities Management Team

Site-specific Teams Shared Compliance and Contracts Team Shared Service Desk

11 £113,195 service related savings plus a proportion (£15,000) of the senior management related savings

6.40 The facilities management and building compliance services in scope of shared support

services are:

Service Area Service Function

Strategy & Management

Strategy and Management

Contract Management

Cleaning, Security & Caretaking

Building security and access

Porterage and ‘handyman’ service

Cleaning

Waste & Recycling

Building Management Meeting & committee rooms

Catering and vending

Utilities & Energy Management

Heating & ventilation control system

Non-public car parking

Office furniture and moves

Archiving

Building risk assessments

Service Desk Service Desk

Processing invoices and orders

Compliance and Maintenance

Repairs & Maintenance

Compliance (building related health & safety)

Post and Reception Post 12

Courier 13

ID Cards / Visitor Passes

Reception 14

These services are described in more detail in ‘Appendix F –Services List’

Shared Print and Design Service

6.41 Print within each authority is responsible for the provision and maintenance of printing

equipment for staff and bulk printing on behalf of internal and external customers, the service

manages the Print Polices (where these are in place).

12 Post for East Herts Council and Stevenage council only at this stage

13 Courier for East Herts Council and Stevenage council only at this stage

14 Reception for Stevenage council only

6.42 The customers of the print service are the Members and internal staff of the authorities, with

some additional work undertaken for external organisations including Parish Councils.

6.43 Print is managed differently in each of the three authorities. In East Herts Council the Print

service is managed within Facilities Management; in Stevenage Borough Council the Print

service is managed within ICT and in North Hertfordshire District Council the Print service is

managed alongside Customer Services. However, the Print services in all three authorities are

generally able to stand-alone in terms of operational management and duties.

6.44 The foundation of the proposals for shared Print and Design services is the move to a

centralised print service, delivering the specialist print and graphic design services

once for the three authorities.

6.45 The key principles upon which the shared Print and Design service would be based are:

� Centralising high volume printing, gaining economies of scale and resilience

� Managing print equipment and contracts once, gaining economies of scale and buying power

� Managing print and design within one service to increase resilience, maximising the utilisation of in-house print equipment and graphics skills, whilst maintaining each authority’s design standards.

� In-sourcing, print policies and process change to maximise the above benefits and minimise the need to outsource work to external suppliers. Flexibility to deal with high volumes at certain points in the year will be maintained.

6.46 Corporate print policies, aligned or common across the authorities, will ensure that service

standards, including confidentiality, are maintained and enable more efficient printing

arrangements throughout the authorities.

6.47 The estimated revenue savings are £209,10015 which equates to 19% of the baseline

budget for Print and Design. The main dependency for these savings is the investment

required to establish a central print hub, estimated investment is in the region of £45,000 with

some additional ongoing revenue commitments for software licences and leased equipment.

6.48 There is a high level of confidence in this model as the approach has already been adopted

internally within North Hertfordshire District Council where there is a strong, combined, print /

design service. Business processes at North Hertfordshire District Council are already

underpinned by established print policies, the cultural change required to successfully

introduce print policies is underway within Stevenage and, to a lesser extent, East Herts.

6.49 In additional East Herts and Stevenage in particular would gain significant resilience benefits

as a result of filling vacancies, regaining key skills and through the move to larger teams.

15 £194,100 service related savings plus a proportion (£15,000) of the senior management related savings

6.50 It is proposed that Print is managed alongside Facilities Management, IT and Business

Improvement, maintaining the strong links to both services. An indicative structure for

Shared Print and Design Services is summarised below, any proposals related to staff

changes will be developed following the transition to shared senior management and through

consultation with Staff and Unions.

Head of Shared Service

Shared Print Management Team

Shared Print Team Shared Graphic Design Team

6.51 The Print and Design services in scope of shared support services are:

Service Area Print Service Functions

Service Management and Cross Cutting Services

Print Management and Policies

Managing customer and supplier relationships

Maintenance and Incident management

Procurement of consumables

Stationery contract management

Graphic Design Design and Artwork

Local Devices Multi-Functional Devices,

Desktop Printers / Scanners

Large Format

High Volume Printing Internal bulk printing

Specialist printing

Litho printing

Controlled stationery printing

Print finishing, enclosing and mail out

Mail Merges

These services are described in more detail in ‘Appendix F –Services List’

Shared Business Improvement Service

6.52 The Business Improvement Service at Stevenage Borough Council delivers project

management and business and information analysis services to the organisation. The team is

closely aligned to the ICT function and has considerable experience of project managing the

implementation of major ICT projects and in working with back office service managers to

support the establishment of business cases, which in recent years have mainly focused upon

delivering efficiency improvements.

6.53 The team also supports the delivery of projects involving organisational change at Stevenage

Borough Council, such as recent shared services projects to deliver a Single Internal Audit

Service (SIAS) and a shared Benefits and Local Taxation Service between Stevenage

Borough Council and East Herts Council. In this regard, a close working relationship between

the team and Human Resources is important.

6.54 The key principles in delivering shared business improvement services will be:

� Ensure that resources continue to be made available to support the delivery of complex

ICT and other projects by maintaining the relationship between business improvement and

ICT and HR services within the partnership

� To enable East Herts Councils and North Hertfordshire District Council to commission

these services when required but without obligation to do so at this stage

� To review the operation of the service in 12-18 month’s time

Customers

6.55 The support service customers are the internal staff and Members of the authorities, in total

this is 1,480 staff. The services also have a small number of external customers, including

Parish Councils, other public organisations and contractors who manage leisure facilities such

as the theatre, leisure centres and users of the community centres.

6.56 Currently customer interaction methods vary across the support services, with formal service

desk arrangements in place for all the three IT services and approximately half of the other

services.

6.57 The approach of channelling customer interaction through a formal service desk, with online

Intranet self service, is recognised as the most efficient method and is considered suitable for

all the support services. It is anticipated that the majority of the shared service’s customer

interaction will be channelled through this method, with suitable arrangements in place for

Members, senior officers and unions and clear processes for escalation to professional

officers and for issues resolution.

6.58 It is proposed that a single Service Desk system is procured and deployed for each support

service. This minimises costs and enables a common approach to managing customer

interaction, in the longer term options for a combined support service desk (one for all

services) may be explored. The estimated cost of this system is £50,000 which is included

within the IT implementation budget.

Quality, Performance and Resilience

6.59 The support services all currently deliver to the standard required by each authority, with plans

in place to improve or change the quality where required. The standards of service required

are broadly similar across the authorities in particular for the core services which all authorities

have in common.

6.60 The current resilience levels have been assessed, taking account of the ability to continue to

service at same level, the impact of staff absence and of unanticipated urgent work. The

majority of the support services in the authorities currently have low or reducing

resilience levels. In the current financial climate this presents challenges which, without the

economies of scale and efficiencies achievable through partnership, may mean that service

standards can no longer be maintained at the required level. The aim of shared support

services is to increase resilience to a common and robust level for the future.

6.61 It is anticipated that the standards for each service will be reviewed with the

management teams and other stakeholders. No changes to service standards are planned

ahead of this review and it is anticipated that services will continue to deliver to the current

standards through the transition to shared services and in the early implementation stages.

This maintains business continuity by providing a stable environment.

6.62 The proposed approach for reviewing service standards with stakeholders includes:

� Introduction of key performance indicators to monitor service standards through the period

of change;

� Assessment with management teams of organisational requirements, current standards

and areas for change or improvement;

� Customer survey to provide understanding of what internal customers value about the

support services and to provide benchmark data for future changes;

� Assessment of good practice, practical and financial considerations;

� Assessment of options for moving to broadly similar service standards across the three

authorities, with flexibility to increase or decrease service standards to meet individual

authority business requirements (variations in service quality may be reflected in the cost

for that authority);

� Proposals for new service standards (where required), including performance monitoring

and reporting, escalation and feedback processes.

7 Alternative Options & Future Considerations 7.1 Overall it is considered that ‘do nothing’ is not a realistic option in the current financial climate.

The level of savings which each authority is required to make, combined with the current and

potential resilience risks mean that retaining the existing support service arrangements is not

considered a viable option.

Alternative Partnership Models

7.2 From a shared service perspective the key alternatives assessed in establishing the preferred

partnership model include:

� Sharing some but not all of the support services would impact the senior management

costs and in addition present risks to implementing unified and efficient support services.

� Alternative locations for the support services are available, however these increase the

level of impact on staff, service delivery and establishing an equitable partnership

� Less formal sharing arrangements for the majority of services would have a significant

impact on the ability to implement joined up working practices and efficiencies

Hertfordshire County Council Shared Human Resource Services

7.3 All three authorities already benefit from the joint arrangements established by Hertfordshire

County Council for Human Resource services, in particular the Reed training framework.

7.4 In addition Hertfordshire County Council have expressed an interest in potentially sharing

Human Resource and Payroll services with Districts. Partnership options built upon the

delivery model already in place for service delivery to County Council Departments. These

options, further utilisation of the Reed training framework and ongoing procurement of

Recruitment services will be explored in more detail following the transition to shared senior

management.

Shared Managed Services and Outsourcing

7.5 There are options for delivery of support services through the Serco Shared Managed

Services framework established in 2011 by Hertfordshire County Council.

7.6 Assessment of the Shared Managed Service options established that outsourcing the services

through this framework is not suitable at this stage for the scale and range of support services

proposed for delivery through partnership. This and alternative outsourcing options

arrangements may be reviewed in the future, once the benefits of joining together through

shared services have been achieved.

8 Financial Case

Financial Savings

8.1 The overall savings achievable from the preferred partnership model are 18% of the baseline

budget which exceeds the minimum benchmark of 10% established by the Programme

Board, with estimated savings in each service of:

Savings Summary

Costs £000’s (rounding has been applied)

Service Potential Saving

IT £460,665

Human Resources and Payroll £199,000

Facilities Management £128,195

Print and Design £209,100

All Services £996,960

8.2 There is a high level of confidence in these savings, which are considered to be prudent and

take into account the organisation and cultural change required to transition effectively to

shared services. It is anticipated that there may be further savings once the shared service is

established and common processes are in place.

Implementation Costs

8.3 The costs of implementing the proposed shared service arrangements have been estimated,

including staff related costs and initial investment costs. These costs fall within the following

three areas and are summarised in the Savings and Investment Profile (Appendix G):

� Cross Cutting Revenue Start up and Investment costs

� Capital Investment

8.4 Experience of organisational and business process change projects has shown that a

contingency budget is beneficial to support risk mitigation and enable rapid resolution of

issues which may arise through the transition and implementation phases. An appropriate

contingency and risk mitigation budget will be identified by the Chief Financial Officer of each

authority.

8.5 The budgets will be monitored and overseen by the Programme Board and through the

existing programme / project monitoring frameworks in each authority.

Cross Cutting Revenue Start-up and Investment

8.6 The initial start up and investment costs have been estimated at £698,00, in summary these

costs are comprised of:

Cost Area Costs

Redundancy Provision Provisional estimate based on the degree of change which might take place

£450,000

Staff Support Training and support for staff undergoing change, this is in addition to the corporate and service specific provision which each authority has in place.

£25,000

Disturbance Payments

Provisional estimate based on a draft inter-authority disturbance policy. These costs are subject to ongoing discussion with Unions, if the inter-authority policy is not agreed costs will change.

£30,000

Home Working Start-up

Based on the current North Hertfordshire District Council policy and the percentage of home workers within the support services. This option is selected as North Hertfordshire District Council is considered to have the most mature home working arrangements and does not presume that this policy would apply to all staff.

£31,500

Project Management

Costs of internal staff time, including backfilling to enable key specialists to support the programme and with provision for external specialists including HR, Finance and Legal.

£160,000

Print Start-up Relocation of print equipment £1,500

TOTAL £698,000

8.7 It is anticipated that some of the proposed changes will incur additional revenue costs, the

additional revenue would be phased inline with changes to working arrangement, licences or

lease arrangements:

Cost Area Annual Costs

Home Working Revenue Ongoing revenue costs to support home working (based on North Hertfordshire District Council Policy as above)

£11,200

Print Revenue Additional print solutions which may be required to establish the proposed print service including courier and software licences.

£20,500

TOTAL Annual Cost £31,700

Capital Investment - IT

8.8 The cost of implementing the proposed shared IT data-centre is estimated as £987,406.

These costs are kept to a minimum by reusing recently purchased technology from all three

authorities.

8.9 In summary the costs are comprised of:

Cost Area Costs

Hardware (Including: Servers, Networking and Storage) £596,135

Software (Including Hyper-Visor and Service Desk system) £222,271

Technical Resource (including backfilling) £169,000

TOTAL £987,406

An appendix breaking down these costs and detailing the asset life will be included in the final

business case

8.10 Analysis of the capital costs for the data-centre establishes that once the initial implementation

costs have been incurred, future capital commitments for the three authorities reduce. This

means that the longer the partnership between the authorities lasts, the greater the financial

benefit arising from a single data-centre. Costs would also reduce further should the

partnership grow in future years.

8.11 It should be noted that the costs quoted refer to investment in jointly owned data-centre

technology. Other future capital costs relating to local equipment such as PCs and lap-

tops or for licensing new business applications will be incurred in addition to the costs

quoted in this report. All future costs are based on the assumption that current technologies

remain in use, the authorities may wish to change technology to take advantage of

improvements and transformation within the industry.

Savings and Investment Profile

8.12 The predicted savings and investment been profiled over a five year period, inline with the

intended period of the initial partnership agreement. The savings and investment profile is set

out in Appendix G.

8.13 It is anticipated that the savings identified within this business case, from services designed

on the principles set out in Section 6 ‘Service Design’, would be delivered in full from Year 3

(2015/16). The anticipated deliver of savings timeframe is:

Savings Stream Anticipated Timeframe

Senior Management From 2012/13

IT Stream From 2013/14 continuing to 2015/16

HR and Payroll Stream From 2013/14 continuing to 2014/15

FM Stream From 2013/14 continuing to 2014/15

Print Stream From 2013/14 continuing to 2014/15

Additional information on the capital funding will be added to the final business case

9 Transition and Implementation Approach 9.1 The implementation approach has been developed following research into best practice,

implementation of similar shared services and the recent learning from shared services

projects undertaken by the authorities. Contingency has been built into the timeframes and

budgets. Regular reviews will be undertaken of the approach, resources and delivery dates to

ensure to ensure the required deliverables are achieved.

Consultation with Staff and Unions

9.2 The creation of the proposed shared support service partnership would require the transfer of

staff in the support services:

� Staff from East Herts Council and North Hertfordshire District Council would transfer to

Stevenage Borough Council.

9.3 There will be full consultation with the relevant trade unions, the Staff Consultative Forum

(SCF in NHDC) and staff in all three authorities. The consultation will be conducted in

accordance with the principles of each organisation’s Reorganisation / Organisational

Change Policies and will comply with the statutory requirements of the Transfer of

Undertakings ( Protection of Employment Regulations 2006 ( TUPE) and the Trade Union and

Labour Regulations) Consolidation) Act 1992 as amended by the Trade Union Reform and

Employment ( Act 1993.) ( TULRCA).

9.4 Consultation with staff and Unions is proposed to take place June – October / November 2012

on:

� The proposed transfer

� The approximate date of the transfer

� The reasons for it

� The legal, economic and social implications for affected employees

� The measures anticipated to be taken in relation to the affected employees. This will

includes the proposed location of the services, the proposed senior management

structure, the proposal to recruit to this prior to transfer, the single employer and the

transition arrangements and any further staff changes that may occur post transfer

� That the proposed transfer may result in redundancies prior to transfer

� The numbers and descriptions of any such employees

� The proposed selection method

� The proposed redundancy process and timetables

� The proposed method of calculating the amount of any redundancy pay

9.5 As well as consultation with the Trade Unions/SCF all staff will be consulted about the

proposed business case, the proposed transfer, and its implications. There will be

individual consultation with staff at key stages of the process. Heads of Service and

Equivalents will be consulted on the draft structure and job descriptions for Heads of

Shared Service and arrangements for recruitment and selection as they will be directly

affected prior to transfer. Individual consultation with other affected staff will take place

once the decision has been taken that this proposal will proceed.

9.6 The consultation process may result in feedback which alters the proposals. If that is the case,

the management board of each authority will be advised and the timing of any changes may

alter.

9.7 Subject to the outcome of the consultation, the staff may be transferred to Stevenage

Borough Council, the proposed date for this transfer is October / November 2012.

Timeline and Approach

9.8 The transition and implementation of shared support services will be undertaken in a phased

approach.

Transition Phase

9.9 This phase includes consultation with staff and unions, recruitment and selection of Heads of

Shared Service prior to transfer, planning and preparation for the proposed implementation

and each authority implementing new arrangements for orphaned services.

9.10 It is envisaged that the transition phase is completed with the staff transfer and that the

Shared Services Board will be formed shortly after this date.

9.11 At the point of transfer, and the completion of the transition phase, no change is proposed to

the structure of the support services below Head of Service and Equivalent level. Staff will

transfer in their existing jobs roles and teams and remain in their current location.

9.12 Subject to consultation and to a decision to proceed to shared support services, the key

milestones and deliverables for the transition phase are:

Transition Phase

Milestone / Deliverable Estimated Duration

Estimated Completion In

Consultation & TUPE Transfer 90 days October / November

Head of Service Recruitment & Selection 2 months September / October

New arrangements for ‘orphan’ services implemented

2 months September

Agreed scope and resources for IT, Staff and Accommodation changes (in preparation for implementation)

3 months October

Interim management arrangements agreed 2 months November

Partnership Agreement agreed 4 months November

Implementation Phase(s)

9.13 The implementation of shared support services will begin after the staff transfer and the

appointment of Heads of Shared Services, subject to consultation and a decision to proceed

to shared support services.

9.14 The changes will be managed within the framework of a single programme, reporting to the

Shared Services Board and the management board in each authority. The dependencies

between the shared support services implementation projects, wider organisational changes

and business requirements will be considered and monitored as part of the implementation

programme.

9.15 It is anticipated that the changes will be staggered, though some change projects will be

delivered concurrently. The following key implementation projects have been identified at this

stage:

� Service Design and Restructure(s)

� Single IT Data-Centre Implementation

� Combined Print Service Project

� Facilities Management Cleaning Contract

� Single Human Resource and Payroll System Implementation

9.16 The scope and definition of each project will be agreed and the projects formally

initiated following the appointment of Heads of Shared Service. Preparatory work,

including draft scoping of the IT, HR and Accommodation work and resources will be

undertaken ahead of this to avoid unnecessary delay once Head of Shared Service are

appointed. In addition, options exist to bring forward the start of some projects. These

options will be explored by the Programme Board in Summer 2012 and where appropriate

projects will be initiated early.

9.17 Subject to this detailed scoping the indicative milestones and deliverables have been

identified for key projects.

9.18 It is anticipated that the Design and Restructure of individual support services will be

undertaken separately. The risks related to each service and the dependencies between the

support services will be assessed and an order for service changes proposed to the

Programme Board and Management Boards of each authority.

9.19 The development of proposals for individual services will be undertaken with the management

teams in each authority and through consultation with staff and unions. It is anticipated that all

services will be reviewed within 6 months of the staff transfer.

9.20 The indicative timeline for service design and restructure review is:

Implementation Phase: Service Design and Restructure Project(s)

Milestone / Deliverable Estimated Duration

Interim management arrangements implemented 1 month

Options assessed Up to 6 months

Consultation on Proposed Structure 1 month

Recruitment & Selection 1 month

Embed new arrangements 3 months

9.21 The design options for a single IT data centre will be refined, detailed planning and risk

assessments undertaken. Options will be reviewed by the Programme Board prior to the

commencement of the implementation project.

9.22 The indicative timelines, based on the high level design established by IT managers is that the

implementation will take approximately 15 months. This timeframe allows staff training and

knowledge transfer to take place within the project timeframe and includes the following key

stages:

Implementation Phase: IT Data-centre Project

Milestone / Deliverable Estimated Duration

Initiation < 1 month

Phase 1 - Procurement and Project Start-up 1 month

Phase 2 - Build Core Infrastructure 4 months

Migration:

Phase 3 - Priority Deployment 4 months

Phase 4 - Full Deployment 4 months

Phase 5 - Monitoring and Completion 2 months

10 Risks 10.1 There are risks in implementing a shared service, which are summarised in the table below,

together with suitable mitigation. An appropriate entry will be made in each authority’s

strategic risk register, should a decision be taken to proceed with shared services.

Risk Mitigation

Failing to gain or maintain support from the top.

Support from senior officers and / or Members is not as strong as required. This presents difficulties in securing commitment to the vision and risks to implementation of the changes moving forward

The business case must be convincing. Through consultation and engagement with those at the top, understand their concerns and address them.

Ensure continued engagement with the management teams in each authority and manage the transition to and implementation of shared support services effectively alongside other organisational priorities.

Lack experience in partnership working

Poor cross-organisational and interdepartmental collaboration, with entrenched local interests and little commitment to work in partnership.

Develop comprehensive communications plan. Create opportunities for officers to meet and build common ground, focusing on areas of mutual interest.

Ensure that governance and management arrangements for the change are appropriate and communicated clearly.

Strong leadership from Heads of Shared Service with clear expectations of behaviours. .

Lack of appropriate resources

Appropriate resources which are essential for implementation, such as specialist IT, HR, Accounting or Legal staff are not available

The project sponsor and Programme Board are responsible for ensuring that adequate resources are made available to the project in a timely manner. Early identification of resources and key areas of risk will support this.

Recognise key dependencies on staff skills and make provision for backfilling and / or for bringing in external expertise if required.

Staff turnover increases and / or morale reduces in critical areas

Staff turnover and / or staff morale is impacted by uncertainties about the future. This could lead to shortage of knowledge and experience needed for managing the transition to or implementation of shared services, or to performance impacts within the services

Ensure timely and appropriate communications with staff about the change. Be clear how jobs may be affected by moving to a shared service / at the different phases of the change, focusing on the potential incentives and benefits in new working arrangements.

Redesign of service / business processes is poor or incomplete

Service delivery will be inefficient or performance may be impacted. Resources would need to be diverted to repair the situation.

Ensure that sufficient time and staff resource is allowed to prepare for and implement changes, including engagement with service specialists and with management teams in the partner authorities.

Risk Mitigation

Ability to adapt to changing organisational and business requirements

The service is unable to adapt to changing requirements, or to authority specific requirements.

Build flexibility into the future service design and financial partnership models, including tiered service quality options for demand led services.

Strong relationships with senior management teams in the three partner authorities, understanding of the responsibilities of both the services and of customers.

Technology is inadequate

Technology requirements are poorly or incompletely understood. This leads to extra time and resource in order to deliver satisfactory service delivery.

Recognise that IT is critical to the delivery of services and involve professional business and systems analysts, together with service specialists, users and suppliers in technology changes.

Scope and specify the IT changes upfront ahead of each change.

IT Data-centre Implementation

The infrastructure design or build is not resilient, or leads to live service delivery problems during migration.

The technologies proposed are generally well known.

Identify and resource lead technical officer role, including relevant technical skills and previous experience of similar shared IT service implementations.

During migration to a new shared infrastructure service availability and business continuity will be a key priority.

Slippage Unexpected events or poor estimates of the anticipated duration of activities delay transition or assessment of future options.

Apply rigor to the production and review of implementation plans. Include specialists on the project team, in particular IT, HR and business change professionals and reach agreement on projected timescales.

11 Legal Considerations 11.1 At this stage there are no known legal impediments to proceeding with the proposed shared

support services partnership.

11.2 The proposed transfer of staff will be subject to the provisions of TUPE which require that

employees employed in an undertaking prior to the transfer will transfer to the new employer

with continuity of employment preserved including all rights and duties under their contract,

with the exception of their pension rights. Any dismissal connected with a transfer is

considered to be automatically unfair unless it can be shown that there is an economic

technical or organisational (ETO) reason for the dismissal. As it is proposed to reduce the

number of Heads of Service in the new senior management structure it is likely that dismissals

on the grounds of redundancy will occur. These dismissals will be for an organisational reason

as there will be a reduction in the numbers of people employed, a change in the management

and organisational structure of the affected services.

Human Resource Considerations

11.3 In developing the shared support services proposals and approach to managing the change

external specialist Human Resources advice has been sought, to avoid a potential conflict of

interest on the part of the Heads of Human Resources all of whom are in scope of the

proposals.

11.4 The proposal does have Human Resources implications, although the authorities have

established in the past a variety of methods for delivering services.

11.5 The key implications relate both to considering a new model for delivery of the services and

also the impact on the staff groups concerned.

11.6 The implications relating to the different model will be dealt with through the development of

the governance and partnership agreement, in particular addressing the relationship between

the authorities and the shared service. There will be significant activities required to ensure

cultural and operational integration at the appropriate phases of the transition and

implementation.

11.7 Appropriate support to the staff undergoing this extent of change will continue to be provided.

Officers from the three authorities are working closely with the specialist Human Resource

consultants to ensure that all authorities fully meet their duty of care to staff, and both the

statutory requirements and requirements within organisational change / reorganisation

polices.

11.8 As part of the project team external Human Resources advisers are already contributing to the

approach for communicating and engagement with staff, which has been ongoing since mid

2011. The approach to consultation with staff and unions will be undertaken as set out in

‘Section 9 - Transition and Implementation’ above.

Procurement

11.9 The details of the governance and management arrangements are not yet developed but a

shared service arrangement in principle should fall outside of the EU Public Procurement

regime which, should they apply, would require the Council to tender for the service.

Equalities

11.10 The structure of the services and staff arrangements in particular have been considered with

regard to equal pay. The risks related to equal pay are very low whilst TUPE applies as TUPE

is a defence to any potential equal pay claims.

11.11 The equalities act applies and emphasis is placed on pay parity between men and women

and these implications have been fully considered. At the point at which service integration is

considered the equalities impacts with regard to equal pay will be carefully and fully

considered.

11.12 There are no general impediments which apply as a result of the proposals as they currently

stand but there could be individual cases where reasonable adjustment may be necessary,

these and other equalities impacts will be considered at the time they arise.

12 Conclusion 12.1 The analysis undertaken confirms that shared services is a viable option for these support

services and the proposed partnership arrangements demonstrates a robust service delivery

model.

12.2 A high level of financial savings and other benefits have been identified and are achievable

through the creation of a shared service. The same level of savings is not achievable by each

authority individually.

12.3 The shared service option poses risk, but these can be appropriately managed.

12.4 The proposed move to Heads of Services Service is a key enabler for delivery of efficiencies,

economies of scale and positive changes within the support services.

12.5 There will be significant strengthening of service resilience after the transition to shared

services and implementation of service changes. The transformation projects will deliver

efficiencies savings, economies of scale and, where required, review of service standards to

enable the support services to continue to meet the needs of both front line and back office

services.

12.6 The level of investment required to implement the proposed changes is considered

reasonable given the proposed return on investment timeframe and it is recognised that the

investment is building streamlined, and affordable, support services for the future.

12.7 Overall the business case must be measured on the extent to which the objectives are likely

to be met within acceptable timescales. The level of savings and timescales for delivery are

such that the business case can be recommended by officers.

12.8 Recommendations and proposals for:

� a single shared support service for delivery of IT, Human Resources and Payroll, Business

Improvement, Facilities Management, Print and Design services; and

� take-up of informal sharing for Procurement, Estates Management, Health and Safety

are the subject of separate reports to the Executives / Cabinet of each authority.

Appendices

APPENDIX A

Appendix A – Baseline Budgets The following pages provide a summary of the baseline budgets for the support services.

APPENDIX B

Appendix B - Partnership Principles and Key Characteristics The Chief Executives of East Herts Council, North Hertfordshire District Council and Stevenage

Borough Council have jointly identified the following key characteristics upon which a potential

partnership might be based.

� The partnership will be efficient. We will deliver services more cost effectively than we do

individually and at a cost that compares favourably against private sector benchmarks and

other alternatives

� The partnership will be accountable to elected members from each of the participating

authorities. There are different options for governing the partnership, but Members’

responsibilities to determine the strategic direction for the partnership will be retained,

whichever option is chosen.

� The partnership will be resilient and responsive. Support services must be responsive to

business needs, which are often unpredictable, and to meet peaks in demand for services. The

partnership must ensure quality standards for critical services whenever they are called upon to

deliver.

� The partnership will offer flexible services. In an uncertain world, business needs change and

support services must change with them. The partnership must be light on its feet and adapt

quickly to change.

� The partnership and partners will develop and maintain a productive relationship. The

partnership will not be separate, at arms length, but work intimately, seamlessly and

responsively with the partners.

� The partnership must operate accountably and transparently, but must not be stifled by

unwieldy and costly governance arrangements. It must be equitable with partners sharing

fairly in risks and rewards, decision making and investment. The partnership should make the

best use of partners’ key strengths and ensure that all partners contribute to ensure the

partnership is a success.

� The partnership will be based upon trust and understanding between the partners and respect

for our differences. The partnership will recognise differences in partners’ cultures when

delivering services to them.

� The partnership will be proactive in the way it works, providing opportunities for staff from all

partners to progress and develop. These opportunities will be greater than those available in

smaller staff teams employed by the individual partners.

� The partnership is a fresh opportunity and represents a positive vision of the future. Once

established the partnership will explore opportunities to increase the number of partners and to

expand services delivered. This is a better model for delivering support services and will,

therefore, grow and last.

The Partners � the partners will provide strategic leadership to support the partnership, recognising this as

crucial to the partnership’s success

� the partners will consider each other and the best interests of the partnership when making

decisions that affect the partnership

� the partners will seek to learn from each other and introduce harmonised policies and

processes when practical to do so

� the partners will be pragmatic, focused upon what works best, rather than where services are

located or who delivers them

APPENDIX C

Appendix C – Partnership Agreement Summary Outline Each authority is expected to sign up to a partnership agreement which will be negotiated by Chief

Executives and Directors, in consultation with relevant Portfolio Holders.

It is anticipated that the partnership agreement may include protocols for:

� Shared services board, lead Directors and other key officers, including terms of reference and reporting arrangements to management boards / teams.

� Arrangements for reporting to Members, Committees and notification of call in or scrutiny arrangements

� Responsibilities of partners, the host authorities and employer

� Financial management framework for the partnership with:

- Accountancy support (by the employer) to the partnership for budget setting, monitoring, management, savings or budget review and management information and reporting.

- Initial set up costs, with costs split by equal thirds or on an agreed basis

- Arrangements for transfer of funds between the partners

- Arrangements for ‘managed budgets’ which would be retained by each authority.

- Split of savings and costs between the authorities, with savings split by equal thirds or on an agreed basis and with provision for demand led services.

� Performance management framework for the partnership with:

- Summary of the service provision with reference to key performance measures, services standards and / or service level agreements.

- Process for reporting into the corporate performance and governance arrangements in the partner authorities which are both effective and efficient.

� Accommodation provision with:

- Requirements for all authorities to provide facilities and accommodation for on-site ‘hot desks’ and visiting partnership staff

- Requirements for host authorities to provide facilities and accommodation for partnership staff

� Information legislation and confidentiality:

- Compliance with and key requirements under Data Protection Legislation, Freedom Of Information Act and other relevant legislation

- Provisions for intellectual property created through the establishment and running of the partnership, the authority it vests in and that holds it for the duration of the partnership

- Liabilities and indemnities, including liability for pre-existing staffing issues remaining with the relevant employer.

� Partnership duration, variations, termination and dispute resolution arrangements with:

- An intended commitment of at least 5 years from all partners.

- Process for variations to the partnership agreement, including continuation beyond the intended 5 years

- The framework and process for agreeing expansion of the partnership, including new partner authorities in future years

- Process for termination by unanimous agreement

- Process for dispute resolution with escalation to named officers / groups and stated durations for resolving the matter

� Withdrawal from the agreement with:

- The process for one or more authorities to leave the partnership within with 5 year period

- Notice period of not less than six months

- Consideration of any loss of funding, loss, liabilities or damage which may arise

- Whether as a result the partnership should cease

The above is an outline of the potential content of a shared support services partnership agreement and should be used as an indicative guide only. The full terms of the agreement will be developed by the legal teams and management boards in each authority should a decision to proceed with the shared support services partnership be made.

- 43 -

APPENDIX D

Appendix D – Current Senior Management Structures

The followings pages contain the senior management structure for each authority.

East Herts Council Senior Management Structure

Corporate Management

Team

Director of Internal

Service

Alan Madin

Chief Executive and

Director of Customer and

Community Services

George A Robertson

Director of

Neighbourhood Services

Simon Drinkwater

Head of Financial

Services and

Performance

Simon Chancellor

Manager of Corporate

Risk

Chris Gibson

Head of Environmental

Services

Cliff Cardoza

Shared Services:

Shared Internal Audit

Services

Head of Customer

Services and Parking

Neil Sloper

Community Engagement

Manager

Will O’Neill

Head of Planning and

Building Control

Services

Kevin Steptoe

Head of Community

Safety and Health

Services

Brian Simmonds

Manager of Housing

Services

Claire Bennett

PA Team

Jo Vottariello,

Sian Gentry,

Cheryl Gibbings,

Margie Wilson

Head of Democratic and

Legal Services

Jeff Hughes

Head of Revenues and

Benefits Services

Su Tarran

Manager of Economic

Development

Paul Pullin

Hertford Theatre Team

Rhys Thomas

Head of People, ICT and

Property Services

Emma Freeman

North Hertfordshire Council Senior Management Structure (Interim)

Stevenage Borough Council Senior Management Structure

=

- 47 -

APPENDIX E

Appendix E - Orphaned Services In summary the services which are ‘orphaned’ as a result of the proposed shared service are:

East Herts Council

Services currently within People, ICT and Property services, with direct line management

reporting affected by the proposed formal shared support service:

� GIS

� Estates

North Hertfordshire District Council:

Services currently within Revenues, Benefits and ICT services, with direct line management

reporting affected by the proposed formal shared support service:

� Business Services

Services currently within Finance, Performance & Asset Management services, with direct line

management reporting affected by the proposed formal shared support service:

� Health and Safety

� Estates / Capital Projects

Stevenage Borough Council:

Services currently within Customer Services and Business Improvement service delivery unit,

with direct line management reporting affected by the proposed formal shared support service::

� Customer Services

� Customer Focus

� Performance and Improvement

� Knowledge Developer

Services currently within Human Resources and Payroll service delivery unit, with direct line

management reporting affected by the proposed formal shared support service:

� Health and Safety

Services currently Finance service delivery unit, with direct line management reporting affected

by the proposed formal shared support service:

� Exchequer: Creditors and Debtors

The majority of the orphaned services are managed within specialist teams, or are individual

specialist roles and there is a high level of confidence in the ability to move to the new

arrangements minimal disruption or business continuity risks.

- 48 -

APPENDIX F

Appendix F – Services List

IT Services

ICT Service Description

Strategy and Management

Recommendation of ICT Strategy, Service Plans, revenue budget, capital budget, user protocols and policies, service level management, including performance management and financial reporting.

Procurement / Contract Management

Including invoicing, portfolio management and contract management and control over payments.

Desktop / Mobile Equipment

Procurement, set up and installation of:

� physical desktop – devices to access the network (PC / laptop / tablet / mobile phone, desktop phone, monitor, keyboard, mouse, docking station)

� desktop (standard office products, other standard desktop software and locally held software, print drivers / print management)

� end of life disposals

Asset management / inventory control.

Network and Communications

Provision of networking and communication (including PABX, VPN, landlines, handsets / headsets, video conferencing, OCS / messaging, web hosting, communications management applications, cabling, WiFi, routers, network management applications. (Note: web content management is out of scope).

Infrastructure Management

Including data / file storage (SAN, servers, portable digital storage), backup and recovery.

Database Management

Administration of databases.

Operations Management

Including batch work, processing and transactional activity (including BACS).

Service Desk

Service desk and first-line support, resolving enquiries at first point of contact where appropriate, audio-visual and web conferencing and incident management with the majority of the other enquiries passed to second-line support or application support.

Interaction methods include email, telephone and possible face-to-face with self-service and online support maximise where appropriate.

Support for Members.

Security Security management including physical security, confidentiality and access controls, archiving, hardware protection, network security, disaster recovery, business continuity and risk management or all ICT services.

Application Support Support and maintenance and system upgrades of all business applications.

System Administration

System administration tasks for all business applications.

Application Development

Development of the applications, enhancement and replacement (development includes selection, design, development, installation and testing, rollout).

Project Management for ICT

Management and delivery if the change to ICT (including management of the IT change / IT workstream within a project, testing familiarisation and training, understanding of IT issues and risks).

Human Resource and Payroll Services

Service Description

Strategic HR and Organisational Development

Design and development of HR Strategy and Policies development and service level management across the whole HR service, corporate and strategic HR project management, staff consultation and Member relationship management / attendance at Joint Consultative Committees.

Talent management, succession planning, workforce planning, organisational change management (including organisational restructures and projects).

Service Management and Management Information

Service level management across the whole HR service, corporate and HR projects, integrating the activity of the teams within the HR service, interpretation of performance and financial management information and reporting to senior management teams.

HR Advice Provision of basic HR and Payroll advice to Managers and staff, possibly through a dedicated 'HR Advice Line'.

Payroll

Management, reporting and processing of all payrolls (staff and Members), including balancing and adjustments, HMRC requirements, reimbursements (lease car schemes, election canvas payments, expense claims), FOI requests and providing advice to staff and management on Payroll, redundancy and pensions.

Reward Reviewing terms and conditions; including single status, job evaluation, contractual and non-contractual benefits (including childcare vouchers, flexi-time, etc.), annual pay increases, equal pay audits.

Learning and Development

Identifying training needs through performance management frameworks, Member development, management and delivery of learning, development and training for staff and Members through a variety of methods, including eLearning; leadership and management development, budget management.

Occupational Health

Employment questionnaires, management advice, case management, health advice, referrals for long-term and short-term absence, manual-handling training and health and safety checks (including inoculations), physiotherapy programmes.

Resourcing Recruitment, including agency recruitment, resourcing (attraction, selection, joining, induction, CRB checks, training, leaving), vacancy management and establishment control (headcount management including starters, movers and leavers).

Employee Relations

Employment policy development, case management, support to organisational change including redeployment, employment law, reporting to senior management teams, representing the organisation at employment tribunals, equalities, providing advice, guidance and support to Managers (business partner role), industrial relations, consultancy schemes, e.g. mediation, job evaluation, etc.

Facilities Management Services

Service Function Description

Strategy & Management

Strategy & Management

Recommendation of Facilities Management and Building Compliance strategy, policies, service plans, revenue budget, capital budget, service level management, including performance management and financial reporting.

Contract Management Including portfolio management, contract management, supplier management and control of over payments.

Cleaning, Security & Caretaking

Building Security & Access This function incorporates the alarm monitoring system, building access points and co-ordination of security systems in civic offices and external buildings.

Service Function Description

Porterage & ‘Handyman’ Service

Day to day minor repairs and maintenance and transportation of office supplies / post between buildings.

Cleaning Co-ordination of cleaning contracts and monitoring in council buildings.

Waste & Recycling Provision of office recycling receptacles’ and facilitating waste management in council offices.

Building Management

Meeting & Committee Rooms

Overseeing the civic suites and corporate meetings rooms with regard to cleaning, audio and visual equipment and bookings.

Catering & Vending Replenishing vending machines (mainly through contractor) and ordering catering supplies for Member meetings.

Utilities & Energy Management

Management of the authority’s utility contracts and use. Energy management to enable the authority to monitor, control and conserve energy in particular promoting energy saving measures.

Heating & Ventilation Control System

Management, support and maintenance of the heating and ventilation in the buildings.

Non public car parking Overseeing maintenance and health & safety in the car parks used by Members, staff and / or visitors.

Office furniture and moves Co-ordination, management and planning of office moves and purchasing of office furniture.

Archiving Transporting paper files to storage rooms and file retrieval as necessary.

Building Risk Assessments Assessment to ensure that risks are managed and appropriate action identified.

Service Desk

Service Desk The provision of a single point of contact for customers to report any building maintenance type related issues.

Processing invoices and orders

Raising purchase orders and works orders, processing GRNs, passing invoices for payment.

Compliance and Maintenance

Repairs & Maintenance Management of maintenance programme including cyclical and one-off maintenance activity.

Compliance (building related health & safety)

Management of building health and safety including action resulting from risk assessments, training and reporting of incidents.

Post and Reception

Post Management of post function including the receipt, opening and distribution, franking and despatch.

Courier The provision of a courier service, ensuring post and other items are transported from and to various office locations.

ID Cards / Visitor Passes The process of purchasing identify cards, issuing access passes and maintaining up to date register of visitor passes.

Reception Provision of reception facilities for the building

Print Services

Service Function Description

Service Management / Cross cutting services

Print management / policy Managing the shared Print service and corporate print policy, including monitoring print usage across the organisations, ensuring that equipment is fit for purpose and maximising usage of specialist or high volume print machines

Recommendation of Print Strategy, Service Plans, revenue budget, capital budget, including performance management and financial reporting.

Managing customer relationships Management of relationship between the shared Print service and its customers (whether internal or external), including service level management.

External customers include some Parish / Town Councils, Churches, local groups, Leisure

Centres, Housing Associations, etc.

Maintenance management and incident management

Planned maintenance support and incident analysis management.

Procurement of consumables Procurement of consumables for Multi Functional Devices (MFDs) / Desktop printers (on-demand printing).

Stationery contract management Management of the stationery contract, not the ordering process itself (including envelopes). Closer alignment with the procurement services will be considered.

Graphic Design

Design and Artwork Graphic design and artwork for print jobs on behalf of internal and external customers. Maintaining a close relationship with Communications teams to ensure that material meets design standards for each authority.

Local Devices

Local devices Including MFDs, desktop printers / scanners and large format devices, maintaining a close relation ship with IT.

High volume (including Litho) printing

High volume (including Litho) printing

Internal Bulk Printing, Specialist Printing, Litho Printing, Controlled Stationery Printing, Enclosing, Print Finishing, Mail Merge (data manipulation, production and finishing) and mailout.

APPENDIX G

Appendix G - Savings and Investment Profile The following page sets out the profile for savings and investment.