I'm discussing Council budgets and we get to the matter of shared services and specifically sharing back office functions (things like receipts and payments, payroll, tax collection and so forth). Now these are things that every local council does with the same intention and the same outcome. So, on the face of it, sharing such things ought to be a doddle.
The problem is (and it's not insurmountable since quite a few councils have merged back office with other councils) that, for all the apparent obviousness, things aren't that simple. Even if I allow for a certain amount of bureaucratic sucking of teeth - "ooh, Councillor, I don't think that's possible" - there remains the matter of systems. And unless you merge the systems you really don't realise, other than a bit of saving in senior management, much benefit from sharing.
The problem is that merging large and complicated systems is not straightforward. By way of illustration, our former Spanish bank (Banesto) was taken over by another bank (Santander) but the actual back office systems for the two banks remain - or did in October 2015 - separate to the extent that Santander operators were unable to sort out problems, these had to be done by the former Banesto people who "understood the systems".
Integrating two complicated back office systems - say those of Leeds and Bradford Councils - is only possible given time, money and a plan. To make such a merger worthwhile, we need also to know that the net savings exceed, in a reasonable time frame, the money invested in the merger. It is, while not impossible, pretty challenging to make this calculation with a high degree of confidence. Such a lack of confidence isn't really a problem if the costs are low and the savings are high. But this really doesn't seem to be the case for such back office mergers (or so I'm told).
This problem with complex systems, how they stay in place because changing them is uncertain and expensive, is repeated time and time again. Here's Jon Worth on European railways (quite literally):
After having been stuck again this morning due to lack of collaboration between EU rail firms, I started to wonder: can liberalisation of EU rail actually ever work? And, were it to ever work, what are the prerequisites to making it work?Jon goes on to set out seven factors about the system (information, accountability, ownership, cohesion, customer rights, maintenance and ticketing) that need resolution through system design if a liberalised railway is to be delivered. Jon concludes, unsurprisingly, that:
So then, that’s the little list of issues to solve. Will the EU, and its Member States, be ready to go that far to make a liberalised railway work? And to foot the costs of doing so? I rather doubt it…The problem for us is that, given the significance of our legacy systems (in government, transport and finance especially) and the rate of innovation in these areas, we run the risk of economic sclerosis unless we begin to grapple with the challenge of replacing those systems with new ones. There are technical solutions to all of Jon's questions but the current infrastructure (physical and social) is largely unable to carry those technical solutions. The result of this is that people find 'get-arounds' - those railways, instead of sleek transport systems of the future become anachronistic and inefficient systems superceded by driverless vehicles, drones and communications technology.
Too often this is an argument against doing anything or for merely doing things that don't impact the established order - an interactive screen here, an app there rather than having some idea how the system will look when everything is done. For all my liberal instincts, I can't help but think things are seldom as simple as we like to think they are whatever William of Ockham might have said!