Report of the Local Government Efficiency Review Group

for savings to compensate for what can be significant up-front investment
costs. It is important to ensure that the volume of transactions under
consideration will yield savings in excess of the costs of moving to a shared
service arrangement. Transitional costs can be particularly high where
organisations have incompatible IT systems.
8.2.10 The experience in both the UK and New Zealand suggests that the buy-in of
local councillors and senior management at the outset is seen as critical in
terms of progressing the shared services agenda.
8.3 Recent Government Policy in this Area
8.3.1 The Transforming Public Services report and accompanying Government
statement recommend greater use of shared service provision, not just
between local authorities but across all parts of the public service. Some of
the areas where potential for shared services exist include:
• Human resources, including recruitment, training and development,
pay and benefits, HR advisory services and pensions;
• Finance, such as purchasing, accounts payable, accounts receivable,
fixed asset and inventory management, travel and subsistence, payroll,
general ledger accounting and financial reporting;
• Procurement – a National Procurement Service has been established
within the Office for Public Works (OPW) to create additional
purchasing power, to allow various bodies including local authorities to
purchase goods and services and to provide professional public
procurement advice across the entire public service; and
• Information and communication technologies.
8.3.2 However, the report recognised that for any shared services initiative to
succeed, local sponsors in senior positions must be identified to drive the
initiative. Better use of information was also proposed to minimise data
requests from citizens, which will require greater sharing and re-use of data
across the public service.
8.3.3 Specific working groups have been established to examine the potential for
shared services across the public service in different fields, such as HR and
pensions, and financial shared services. In the context of local government,
shared support services already exist in the provision of HR and industrial
relations support, and in the area of IT support, by the Local Government
Management Services Board and the Local Government Computer Services
Board respectively. These two organisations have been merged as the
Local Government Management Agency (LGMA), providing a significant
platform for expanding shared service delivery in local government.
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