So there are now 6,500 council staff. In March 2010 there were 8,300 – when the chief Exec Kim Ryley said he was planning to cut the workforce by 1,300. So are these 500 posts that this pay cut is protecting currently vacant, or are these some new job losses on top of the 1,800 already gone?

Now we have outsourcing (sorry – “sharing services”), hot on the heels of forcing through a pay cut and tearing up the terms and conditions – but nice to know they’re going to “create more secure employment prospects.”

Seriously, of course these services are still going to be available (it’s not possible to run a council without access to legal advice) – so this vow is meaningless. But the question has to be who is going to be providing them and how does this secure employment in Shropshire?

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This focus upon shared service as a method to save money will massively increase costs and worsen services. All of the arguments made for sharing come from within the shared services industry (IT companies, consultants, or think tanks funded by companies selling shared services). All of the so-called evidence is based upon estimates, projections and surveys. No real data.

Professor John Seddon, an expert in service organizations with extensive experience in public sector systems says that there are two arguments for sharing services. The ‘less of a common resource’ argument and the ‘efficiency through industrialisation’ argument.

The former argument is ‘obvious’: if you have fewer managers, IT systems, buildings etc; if you use less of some resource, it will reduce costs. But the reductions are often minor and one-off.

The second argument is ‘efficiency through industrialisation’. This argument assumes that efficiencies follow from specialisation and standardisation – resulting in the creation of ‘front’ and ‘back’ offices. The typical method is to simplify, standardise and then centralise, using an IT ‘solution’ as the means.

The problem with the industrial design is simple – it doesn’t absorb variety in demand. Because of this, costs soar as the IT system has to be modified and customers ring back again and again because they can’t get what they want.

The evidence of this flawed theory can be found everywhere. In HMRC or South West One shared services which predicted savings of £176 million over 7 years and actually recorded a pre-tax loss over its three financial years. Duplicate payments sitting at £772,000 and a struggle to manage £12.9m in outstanding debts.



This week Western Australia followed Queensland in ending its shared services. It was claimed that it would save $58 million a year and instead cost $444 million dollars (no savings). It is estimated that it will cost taxpayers between $1 – $2 billion dollars to rectify.

With the cost of failure so high, doesn’t the public deserve a proper investigation of shared services? Let us at least closely examine the supposed successes to see if they really are successes.

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