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Let me describe a scenario - at local Authority near you.

A desire to ‘drive out efficiencies’. An imperative to become more ‘customer centric’ and let’s add in ‘focus’ for good measure.
Very many local authorities are exceptionally good at devising spiffing new ways to manage themselves after writing endless reports, numerous desktop studies, service restructures and other internal activities, which lose sight of the bigger picture.

With the aim of trying to get their services-areas to have more of a commercial edge, many authorities fell into the trap of getting departments to “sell” their wares to each other, so that for example, their IT departments “negotiate” service level agreements with everyone else in the Council and “sell” IT services to them. They were all forced to become “intrapreneurs”.

With the benefit of hindsight, the false logic of this policy is all too apparent. It fails on every rational analysis as:

• Each service unit “selling” its wares needs only to cover its revenue costs and simply apportions those costs to directorates in a way which often equates to nothing more commercial or sophisticated than the number of staff in those other directorates.

• There is no demonstrable year-on-year saving associated with the practice. If service unit budgets are cut, the ‘saving’ is associated with planned budget reduction rather than intrapreneurial activity. Were the practice truly commercial, some services simply wouldn’t be able to afford their support requirement.

• Endless hours of officer time are wasted by playing shop and “negotiating” with each other. It’s rather like pet hamsters running in their wheels – maximum visible activity with zero return.

• The intrapreneurial activity usually operates in the vacuum of a monopoly of supply. There is no true choice for internal customers and so the money-go-round goes on and on.

Bizarrely, there remain a large number of old-fashioned authorities who still cling to operating on this widely debunked and counter-productive system.

The solution of course is to encourage service areas to work collectively for the Corporate good. For example, Excela has worked with several Authorities who each year spent hundreds of thousands of pounds on instructing external barristers in private practice to deal with advocacy in their Planning, Child Care and other legal cases. Each of those Authorities’ legal teams simply re-charged those external costs to their client directorates. The outcome was that true legal spend for the Authorities concerned amounted to not just the running on-costs of the in-house legal team, but the also the ‘hidden’ external legal costs that ultimately showed up as expenditure in the budgets of other directorates. Actual legal spend for the Authorities was the aggregate of the yearly cost of running their Legal Services department, plus all those barrister’s fees paid directly by the other Directorates. How much easier it is to recommend that the budget of Legal Services is simply be increased by a ring-fenced sum of around £60k per annum so that they could hire their own in-house barrister.

Yes, the Legal Services salary budget did increase by sixty thousand pounds. But the overall to the Authority as a whole, derived by relying less on external barristers, produces immediate cashable Corporate savings of at least £100k / £200 per annum.

Forward-looking Councils encourage their intrapreneurs to think outside the silo of their own service areas, to ascertain how proper invest-to-save projects can derive cashable Corporate savings.

Kevin O’Keefe is a Solicitor and Director of Excela Interim Management & Consultancy Ltd, providing strategic service reviews, standards investigations , interim Legal & Democratic Services management and elected member training throughout the UK.
http://www.excela.co.uk

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