whitepaperLocaL Government

Easing the squeeze on Europe’s municipalities

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There are 100,000 local authorities across the 48 countries of the European Council. They range from tiny local operations serving as few as 2,000 people to massive rural and metropolitan municipalities with as many as a million citizens. Some focus on the underlying infrastructure – from rubbish collection and street lighting to sports grounds and schools. Others are also responsible for general healthcare and, in some countries, many central government functions have been transferred to them. In the Netherlands, local councils are also set to become the citizen’s point of contact for the entire public sector.

But despite this variety, all local authorities face similar problems. Whether their budgets run to a few hundred thousand or tens of millions of euros, their income is falling – many will have to cope with real budget cuts of 20% over the medium term – while expectations are rising.Key issues include:

• Duplication of functions, both within individual authorities and across a nation’s authorities

• Outdated processes, many of which are repetitive, paper-based and not cost-effective

• Siloed departments and functions

• A lack of information-sharing between departments or functions

• An ageing workforce, who will take expertise with them when they retire, and younger people who don’t think working for the council is sufficiently cool

• A preponderance of stand-alone, in-house systems, depending on the country

• Reducing staff numbers

• The need to balance political and financial priorities.

Doing more for less – a charter for European councils

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MINIMISINg DuplICATED fuNCTIONS Many government functions, both locally and nationally, are internal and back office, which makes areas such as finance, human resources, payroll and procurement perfect for shared services.

In the UK, for example, Haringey Council now has a single HR, finance and procurement system. “The implementation by Logica and the realisation of improved business processes in finance, procurement and HR have brought about savings in excess of [€1.2 million],” says Gerald Almeroth, their director of finance. Savings have been ploughed back into citizen-facing services.

The same thing has happened in more than a dozen UK authorities, including Barnsley Metropolitan Borough Council, Waltham Forest Council and Wiltshire Council. The London Borough of Barnet has saved more than €118 million since 2004. All are more effective as a result.

the logical next step is to share services between authorities and national government is showing the way. In Finland, for example, Logica’s Kieku shared services implementation for HR and finances across the civil service has cut departmental administration costs by 40% and means 8,500 fewer (reluctant, young) staff are needed.

In Holland, our P-Direkt shared services are putting an end to paper-based HR in government departments, saving €280 million by 2020 and halving the number of HR staff.

In the longer term, there is no practical reason why dozens of councils cannot share back offices. A small clutch of shared service centres could help to administer dozens of councils and would save local authorities very substantial sums, releasing staff and funds for front-line, citizen-facing delivery.

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upDATINg pROCESSES AND DElIvERy Remember a world without ATMs? When the first one was introduced – in England, back in 1967 – there were fears that service levels in banks would fall. Instead, staff were freed to deal with more complicated enquiries while the machines took on the mundane business of cash withdrawals, balance enquiries, bill payments and more.

This innovation has been a success largely because it is rules-based. Local authorities can apply the same principle to dozens of services, such as applying for alcohol, hotel or entertainment licences; birth, marriage or death certificates; planning permission or building control sign-off. All of these have defined rules that, in most cases, simply require the applicant to prove identity and show that the rules have been obeyed.

Applicants could fill in forms online via fixed or mobile devices. Some licence applications would still need a physical inspection – for example, to check that a commercial kitchen met health standards – but the system could automate inspection appointments, removing another piece of paperwork and making schedules more efficient. Standardising and automating basic administration makes life easier for citizens and frees up public servants for exceptions-based interventions.

There are precedents for this approach. In the UK, for example, car tax renewal has been automated. Insurance, car safety, licensing and payment databases have been linked to replace a process that involved taking multiple pieces of paper to a Post Office for them to be checked manually, with payment by cheque.

Swedish drivers enjoy cheaper parking where their vehicle is registered. Applying for a parking permit is entirely automated. Again, linked databases make the necessary checks. The bulk of council construction permits, alcohol licences and complaints handling are similarly web-based with officer involvement limited to anomalies and final decisions.

Automation of rules-based services has an extra advantage – it allows a process to be re-thought to strip out as many layers of bureaucracy as possible. In a digital world, it is not enough to duplicate existing manual processes. The rules, including proof of identity, need to be digital too. This shouldn’t cause any problems, given the precedents set in cyberspace, where PIns, passwords and secret pieces of personal information stand in for signatures. Local government employees only need to deal with anomalies highlighted by the system.

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BREAKINg DOWN SIlOS Individual rules-based processes are vertical – request in at the bottom, decision out at the top. The next step is to link multiple processes horizontally, sharing databases of information common to different requests. For example, an applicant for a nightclub licence also requests an alcohol licence. With a horizontally linked system, electronic form fields can be pre-populated by recognising the person’s name and the nightclub’s address. The system checks nightclub licence approval and if the nightclub hours match alcohol licence hours. If the nightclub also has a food licence, the details can be checked automatically against the new application.. This integrated approach breaks down silos, where each rule is treated in isolation and cross-checking is manual. It strips out costs in workflow processing and increases the number of correct decisions by automatically pointing out errors in any individual application.

Full systems integration is a big undertaking. A modular system, backed by a reference architecture, solves this problem because the silos can be converted sequentially and linked to each other in turn. Advantages to the citizen are clear – no more filling in multiple forms, no more chasing around to identify which part of the council deals with what part of an application. The expectation of joined-up government starts to become a reality.

The silo-busting principle – enabled by technology but made possible by redesigning processes and introducing new, more efficient ways of working – can bring further benefits to many other aspects of council work, such as social services or building regulations. In the Netherlands, we’ve used the approach, along with shared services, to create the Case Connected Community (CCC). This integrates web, counter, postal, e-mail and telephone service channels for multiple Dutch local authorities, which have come together as GovUnited. Communications within councils have dramatically improved, as ccc is a case management system which is designed to route requests automatically to the relevant departments. As the system evolves, there will be further efficiencies, without the need for internal system changes. Meanwhile, CCC’s scale has substantially reduced administrative costs and demonstrates the value of cross-departmental working.

We’ve another silo cracker in Sweden, a cloud-based service that retrieves address and contact information to fill in form fields automatically just by logging in and choosing a form.

Other countries have yet to go as far. In Denmark, for example, local authorities use around 600 different, unlinked applications – but municipalities are already making strides in the right direction. Our AS2007 system links social services across 19 Danish municipalities and three regions. Initially, it managed internal and cross-authority social services invoicing but its reporting functions now allow councils to plan budgets more effectively and compare the costs and benefits of different approaches, such as using foster families or children’s homes for children in care.

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1www.cbi.org.uk/pdf/CBI-NEET-Oct08.pdf

ShARINg INfORMATION Systems integration brings councils back to their primary purpose of helping people. A person needing one form of help from social services is likely to need more. By aggregating and automating processes, the person gets the correct type of help faster, at lower cost. This approach is particularly important in areas such as safeguarding vulnerable people. Every country has cases when children or vulnerable adults are harmed because different parts of social services departments or medical authorities did not pass each other information. Shared databases can prevent that and eradicate errors caused by re-keying information.

In a decade’s time, you can expect to see integrated databases that stretch beyond municipalities to allow councils, agencies and even private companies to work together. Hospitals will liaise with general practitioners, health workers, social workers, care homes and sheltered accommodation providers, using a common database of information where care can be monitored and alerts raised. And lives will be saved as a result.

Databases should also be compatible between local authorities, to allow records to follow people as they move from one council to another. For example, reports of child abuse should be passed between relevant authorities automatically, to ensure that appropriate support is given. We’ve already demonstrated the value of shared databases with the UK Police National Database (PND), which links more than 200 police databases among more than 50 police forces. Each force’s database can be searched by person, object, location or event, so police can react quickly to people moving across force boundaries.

Cross-departmental and cross-organisational data sharing make it easier for councils to help some of their most difficult and expensive customers, such as those not in employment, education or training (NEET). The UK government estimates that a single NEET costs the public €340,000 (£300,000) if he or she never works – and the EU average NEET rate is even higher1. Much of this cost falls on local authorities. Early intervention is key to turning lives around – and saving money, as pilot programmes based on data analysis by councils as diverse as Kent, Barnsley, Teesside and Hertfordshire in the UK have shown. Pre-emptive or support work with young people based on analysing data from, for example, school records and family benefits history, can reverse NEET trends and release millions of euros for other purposes. As the 2011 civil disturbances in the UK show, this type of work is urgently needed.

We’re doing something similar with data in Sweden through our Treserva social care system. This automatically matches tax and central health insurance data to check addresses and incomes and makes sure that, for example, an applicant for a social grant is not already receiving state sickness benefit. And in Scandinavia, we’re also providing a cloud service that securely shares information between municipalities and other authorities.

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MAKINg ThE MOST Of AN AgEINg WORKfORCE as a continent, europe is getting older, which means increased demand among the elderly for social services. For a large number of pensioners, the only source of provision is their local council and demand will rise as council income falls.

At the same time, councils in many countries have an ageing workforce. In Sweden, up to 75% of local authority staff are due to retire by around 2015. In the Netherlands, 40-60% of council staff will be pensionable a couple of years later. In Denmark and France, a high proportion of local authority staff will retire over the next few years. As a result, councils need to attract younger people to replace retirees.

As a first step, the problem of knowledge disappearing along with retirees needs to be addressed. Denmark’s recently established Working Processes Bank shows the way. It is a database of current and best practices for local government processes, linking them into workflows.

As there is more than one way of doing a job, the database stores several alternatives. Analysis will show which one, or which combination, is best suited for training the next generation of local government employees.

It also allows process design engineers to create new, more efficient ways of working that take into account the possibilities offered by modern technology – the technology that younger people expect to use at work. That, in turn, makes it easier to attract a new generation to replace the flow of retirees.

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REDuCINg STAff NuMBERS at the same time, councils need to rethink how they provide much of their basic information, so they can employ fewer new staff. One idea is map-based geographical information systems (GIS).

Placed on council websites or retrieved via mobile apps, GIS can offer instant, up-to-date answers to most general enquiries, from the location of a council office to the opening hours of the nearest tennis courts. In a decade’s time, expect to see cheap GIS largely replace expensive face-to-face enquiries and call centres.

Our reittiopas.fi transport planner for Helsinki Regional Transport Authority, covering 14 municipalities, is a typical example. Using a website or mobile app, users can plan travel across all public transport, see hold-ups in real time and find the cheapest tickets – automatically.

To support the ever-smaller number of people who cannot or will not use the internet, help centre terminals can be connected to the same GIS – something we have done for local authorities in The Netherlands. As the number of people who are used to GIS grows, help desk staff numbers can be reduced.

GIS can be built up over time as a modular system, making more information available for customer self-service as individual business cases become clear and council staff and customers press for change. Local businesses can contribute information and, potentially, help to fund the system.

GIS may also enable people to contribute as citizens. A typical example would be a mobile app that allows individuals to report faulty street lights by pinpointing them on a map and sending the information directly to the maintenance department. In the UK, similar initiatives such as fixmystreet.co.uk are proving popular.

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gETTINg TOgEThER IN ThE ClOuD Municipalities do not have to adapt their in-house systems to provide shared services, linked databases and GIS apps. The development of Cloud-based services means that IT can be scaled up or down in line with demand.

Role-based security can make Cloud systems safe by restricting access depending on your job, as the Kainuu region of Finland has found. Its social care department has been redesigned around users, focusing processes on roles, rather than make people fit into processes. As the system is in the Cloud, it can be modified without affecting users’ work and scaled up if demand increases.

As Marita Pikkarainen, Kainuu’s social welfare and healthcare development manager puts it, “We can provide simultaneously new user-centric services and build cost-efficient and flexible processes. Technology as a Cloud service helps our own organisation’s development.”

We’ve done the same for Helsinki and Vantaa’s HR processes by introducing shared Cloud- and role-based services. Users can now access HR services easily and HR professionals can focus on strategy rather than form-filling.

AND NOW fOR A REAlITy ChECK changing the way a municipality works requires commitment not only from the workforce but also from local elected representatives. Balancing short-term political considerations with long-term benefits has always been problematic at every level of government, local or national.

This means that the pace of change for local authorities is governed in part by electoral cycles. It is unlikely that all the political parties in a local authority will agree on the processes or organisational changes that should be given priority. In some countries, national elections may have an even bigger impact – the nature and extent of reforms to local government in France will become clear only after the presidential election in 2012.

But far-reaching change is now inevitable, whoever is in charge. The alternative is municipal bankruptcy – and nobody, however they vote, wants that.

“We have now many more possibilities to develop our organisation’s processes and reach our critical strategic targets,” says Vantaa’s Hr director Kirsi-Marja Lievonen.

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WORKINg WITh lOgICA A few examples of the ways we are helping municipalities across Europe are given in this paper. We use best practices gathered from our in-depth experience of the public sector across the entire continent and apply their principles to the specific circumstances of individual councils and countries.

We always start with the citizen and what citizens need and expect, working backwards from the desired result to redesign processes, using appropriate technologies to enable changes to be made.

Europe-wide, municipalities share a common role – to provide better public services, a healthier, greener environment, good schools, effective social services and the right conditions for businesses to flourish. Our role is to help them make that happen.

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