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Home » Resources » Blog » South Northamptonshire and Cherwell District Councils announce pioneering new partnership

South Northamptonshire and Cherwell District Councils announce pioneering new partnership
Trowers Public Insight

South Northamptonshire and Cherwell District Councils announce pioneering new partnership

As the country gears up for the forthcoming elections, along with death and taxes, it seems certain that local authorities will once again become an easy target for government cuts.

Many district councils are in a surprisingly strong position when it comes to capital reserves and borrowing headroom but cuts in government revenue support grant are taking their toll on services.
Joint working between authorities has traditionally been one way of maintaining front line services whilst cutting costs – retaining a critical mass of expertise with reduced overheads.  However, much has been written about the challenges of setting up successful public authority partnerships, and the need to accommodate different political aspirations and priorities has undoubtedly resulted in fewer authorities adopting this model than might have been expected.

The traditional legal routes to establish public authority partnerships (usually through Local Government Act 1972 secondment powers) have often worked well for arrangements involving two authorities. However, the current financial climate is now forcing more authorities to consider integrating staff and services through joint working arrangements which has resulted in the development of new governance structures and delivery models which are more appropriate as a multi-authority solution.

Key drivers for the new generation delivery models include the need for local authorities to establish arrangements which:

  • facilitate effective (collaborative) decision making;
  • generate economies of scale by transferring staff and services to a new delivery model;
  • provide commercial opportunities to provide services to other authorities;
  • establish effective commissioning and contract management arrangements; and
  • provide the flexibility to accommodate future public sector partners.

South Northamptonshire and Cherwell District Councils are pioneering the new arrangements delivered through a group of multi-authority owned local authority companies, ultimately managed through a joint committee.  The authorities have adopted the model as it "streamlines the complexity associated with collaborative working and drives the operational performance and delivery of commissioned services".  The structure also provides the flexibility for future public sector partners to join the arrangements as well as the possibility of setting up different service delivery arms (including employee mutuals) to trade in the market.

The Authorities have calculated that whilst the current shared service arrangements will save an estimated £12.6m over 10 years, the new delivery model could bring savings of £18.7m between 2015-16 and 2024-25.

On one level, new service delivery arrangements are being driven by necessity and the strong desire among local authorities to do their best to preserve public services in the face of continued government cuts.  But necessity can also drive innovation.  Those authorities which are willing to work together will inevitably find themselves in a better position to manage the political and funding uncertainties – not just over the next 6 months but for the foreseeable future.  The new delivery arrangements offer a flexible alternative to more traditional arrangements, combining the opportunities for cost savings with the development of valuable future revenue streams.

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