Public sector bodies are facing a number of critical barriers in seeking to reap the benefits of shared service initiatives, according to a report published by law firm Browne Jacobson.

These include a lack of available resources, workforce opposition and risk-averse organisational cultures.

The Shared Services Survey 08 is the result of research carried out among 178 senior public sector managers in the health, local authority, social care, education and fire service sectors.

The research found that the primary barrier to implementing shared services, as identified by public sector managers, is a lack of adequate resources. Two thirds of public sector managers (65%) were concerned about a lack of financial resources, while 59% identified insufficient manpower. Resource challenges were particularly evident within the social care and education sectors, where 85% and 71% of managers expressed concern over financial and human resources respectively.

Dominic Swift, head of the Shared Services team at Browne Jacobson, said: “Having the necessary financial and human resources in place is a vital component if the full potential of shared services is to be realised.”

When asked to define shared services, the vast majority of respondents talked about ‘sharing, collaboration and the pooling of resources’. Surprisingly only one in four public sector managers (26%) referred to cost savings and end benefits.

Swift says: “Government is guiding the public sector to drive significant cost efficiencies while improving public services. Yet only a small minority of managers list these among the aims of the shared services agenda.

“This raises an interesting question: is it widely assumed that shared services will mean greater efficiency and translate into significant cost savings or have public sector managers not fully engaged with the government’s ambitions to drive efficiencies through shared services projects?”

When quizzed on who they believe is the driving force behind shared services, public sector managers principally identified senior management and central government. Over three quarters (77%) pointed to senior management, and over half (52%) Whitehall civil servants.

Frontline workers were cited by only 13% of managers – and customers by just a tenth (10%).

Swift says: “The momentum behind shared services is being generated internally – and from the top. It is critical that front line staff are equally engaged in the process right from the beginning. Managers need to consult with staff and customers in a consistent and coordinated way, consider the feedback received and decide together how to address any major concerns.”

The report also identifies a series of cultural issues, including internal opposition, risk-averseness and a lack of trust between partner organisations.

According to public sector managers less than a quarter (23%) of the workforce are active supporters of shared projects, while over a third (36%) actually oppose them. Opposition levels reach some 40% among fire services.

Over one third of public sector managers cite a lack of trust as a key challenge to implementing shared services. Concerns over partner organisations giving priority to their own issues, and a lack of authority over partner workforces, are the two principle barriers to establishing trust identified by the study.

Swift continues: “Clear consultation and communication with employees, unions and local representatives is essential if public bodies are to overcome cultural hurdles and internal opposition, and develop trusting partnerships.”

Close to half (41%) of managers identified the risk-averse nature of their organisations as a significant challenge to delivering shared services.

Ongoing liabilities and high exit costs are paramount among the risks keeping public sector managers awake at night. Close to three quarters (71%) cited these as key.

Other major risks identified are partners withdrawing from shared arrangements (cited by 66% of public sector managers); non-compliance with statutory procurement processes (61%); and inadequate consultation with staff (55%).

“Public sector managers are clearly concerned about a range of risks and barriers inherent in sharing operations with an external organisation," says Swift.

“Managers will undoubtedly need to undertake a thorough profile to identify and assess any potential risks – including financial, personnel, regulatory, compliance, data privacy and intellectual property.

“They should also ensure that all the partners are clear about their responsibilities and obligations and put in place the necessary legal and governance structures before implementation.”

• A PDF of the full report is available in our Whitepapers section.