The purpose of this report is to update Cabinet on the progress since the update provided on 22 July and to recommend the next steps on the Shared Services Programme in light of the further work that has been undertaken to revise the Business Case evaluate various delivery models and develop the future shape of support services.

The Cabinet Member Corporate and Customer Services and Human Resources introduced to Cabinet the new Interim Transformation Director Shared Services and presented the Shared Services report to Cabinet.  The Cabinet Member advised that the report had already been to the Overview and Scrutiny Committee for consideration and that the report set out the next steps on the programme taking into consideration the further work undertaken to revise the business case and develop the future shape of support services.

The director and lead officer highlighted the following points:

• The report outlines where efficiencies could be made, which would be driven by new technology and the need to change the way services were delivered.
• The project was more complex than when originally set up, with 18 months of work carried out by staff for the Council, HHT and the PCT.
• The proposals cover all back office services
• With the three partner organisations working closely together there would be a reduction in impact to frontline services.
• The business case was up to date and had been reviewed by Capita Plc.  Capita confirmed the business case was viable with savings of £33m over 10 years for the three partner organisations.
• Savings of £1m had been made to date by the early implementation of recommendations primarily around procurement, HR and finance, £500k of which by the Council.
• A number of models were evaluated against the updated criteria  taking into account  current financial constraints

The Interim Transformation Director advised Cabinet that a multi sourcing approach was the best way of providing services and the Joint Venture Company was recommended as the best way to make savings and drive down back office expenditure.

The following points were raised in discussion:

• There was concern that the Joint Venture Company could become overly complex.
• It was requested that any savings made were tracked so a comparison could be made against predicted savings.
• In response to a question on support from the neighbouring county of Powys, the Chief Executive reminded Cabinet that the County Hospital was built for Herefordshire and Mid Wales and that both authorities worked together to ensure this was emphasised at the Welsh Assembly.
• In response to a question on the Connects Programme, Cabinet was reminded that this had been taken over by Agresso.
• In response to a question on the savings that could be made regarding transport and Council vehicles, Cabinet was informed the saving would be in the contract for the leasing of vehicles.

The Interim Transformation Director reminded Cabinet that quality was essential and this would be realised as work was dealt with on line through the Agresso system.  The Leader advised Cabinet that savings would be tracked as funding would be removed from the relevant budgets and the process would be monitored.  He also informed Cabinet that the Shared Services report had been discussed by the PCT Board on 20 October and Hereford Hospitals Trust would be discussing the report the following week.

RESOLVED That Cabinet:

a)      agreed to enter into formal shared service arrangements with its partners, NHS Herefordshire (NHSH) and Hereford Hospitals Trust (HHT), adopting a ‘multi-source’ approach; enabling different fit-for-purpose models to be used to deliver shared services for each service or group of services;

b)     endorsed the establishment of a Joint Venture Company and recommends to Council that such a company be established;

c)      delegates the negotiation and agreement of the Heads of Terms for the shared service arrangement for the establishment of the Joint Venture Company to the Chief Executive (with appropriate liaison with the Chief Executive of HHT);

d)     instruct the Chief Executive to undertake a full consultation with employees within the scope of the shared services programme, in accordance with policy and procedure for implementing these changes;

e)     instruct the Chief Executive to report progress of the implementation, as part of the corporate performance reporting process, linked to key milestones with risk management reports; and

f)       agreed to establish a ‘Shadow Board’ consisting of representatives from the three partners in order to provide strategic governance during the implementation phase.