Deal to share council services puts efficiency before politics

29 November 2013 in Council and democracy
The London boroughs of Newham and Havering have put aside political differences and agreed to share support services from next April 2014 in a bid to save more than £40 million over the next five years.
Leaders of Newham and Havering councils
​Preparing to share services, from left: Chris Pope, Newham's executive director for Resources and Commercial Development; Havering Council Leader Michael White; Mayor of Newham Sir Robin Wales; Andrew Blake-Herbert, Havering's Group Director of Resources
The Cabinets of Labour-controlled Newham and Conservative-controlled Havering have approved London’s biggest cross-borough operation to share back office services such as accountants, human resources staff and lawyers.

The ground-breaking project will allow the two councils to share savings worth an estimated £41.2 million by the end of the 2018/19 financial year and help protect frontline services to the public. It is estimated the shared service will save Newham £26.1 million and Havering £15.1 million.

The agreement will only affect support services. Frontline services such as social care, street-cleaning, parks and education, will remain under the control of the separate councils.

Like all councils, Newham and Havering have already made extensive savings, by cutting red tape and making better use of technology. Both councils have concluded that partnership working is the best way to continue to reduce running costs and protect public services, as local government faces further funding cuts in the years ahead.

Sir Robin Wales, Mayor of Newham, said: “Newham has faced considerable financial pressures from the Government in recent years and we expect funding cuts across the public sector will continue for some years. By reducing costs and making savings both councils can protect those frontline services residents say are important.

“We are very different boroughs demographically and politically, but we know party politics and geography need not be a barrier. We have put those differences aside to focus on doing the right thing for local people.

“We may use different governance models – Newham with an elected mayor and Havering with a council leader – but both councils are proud to be leading the way in joined up thinking. We want to show others that they can break down authority boundaries and differences to deliver better back office services. Our partnership will be a model for the rest of London and beyond.”

Councillor Michael White, Leader of Havering Council, said: “Havering and Newham are showing that political differences are no barrier to sensible councils making sensible decisions. We need to save many millions of pounds, but we also want to protect as many public services as we can – so we need to think differently. Sharing services on this scale will make a very significant contribution to the further savings we face in the years ahead.”

The new shared service will bring together 21 separate services across the two councils. It is expected that the savings will be reached by reducing senior management costs, reducing duplication of services and cutting bureaucracy.

The majority of staff in the back office support function that will be joining the new shared service will continue to be employed by their current council. Councillors from both councils will have oversight of the operation.