Is this £300m partnership a blueprint for HR’s future?

A
revolutionary public-private partnership set up between Liverpool City Council
and BT may change the way HR in local government works, reports Ben Willmott

The
role of HR in local government could be revolutionised if a £300m partner- ship
between Liverpool City Council and BT, set up to provide better services at
lower cost, proves successful.

Liverpool
Direct was formed to enable the council to benefit from a cutting-edge IT
infrastructure, which it could not afford to fund itself and will see the first
large-scale secondment of employees from the public sector to the private
sector.

Up
to 1,200 Liverpool City Council employees are to be seconded to the new joint
venture company by the end of this year. As part of the deal the council’s HR department
is being streamlined and its role transformed.

Martin
House, an HR consultant who is advising the council on Liverpool Direct, says
all council IT services and the council’s call centre – the largest in the
country – are now run by the joint venture company and will be joined by
revenues and benefits, HR and payroll later in the year.

Staff
from these departments are being seconded to the new joint venture company but
remain Liverpool City Council employees, with unchanged terms and benefits.

The
HR department will be run from a new service centre within Liverpool Direct
with a single contact number. Line managers will have more responsibility for
HR issues and the intranet will play a much bigger role in day-to-day
administrative issues such as annual leave and expenses claims.

House
explains that line managers will provide the personal contact with staff and
they can discuss more complex issues with the council’s specialist HR officers
in the service centre.

HR
staff have been cut by half and overall council staffing levels cut by 1,500 as
part of the changes which involved negotiation with Unison and the GMB unions
but House stresses that the council had to make no compulsory redundancies.

"This
could be the blueprint for the future of local government," said House who
believes Liverpool Direct’s service centre could be used to handle the HR
requirements of a number of local authorities, drastically cutting costs.

"When
you strip down the way councils operate they are no different. There is a huge
amount of duplication across the whole sector.

"This
sort of operation could offer significant economies and leading-edge service. I
would be very surprised if  this sort of
partnership does not become the way that people do things over the next 10
years."

Liverpool
City Council chief executive David Henshaw thinks the agreement is a landmark
in public-private partnerships and has real benefits for both employees and
Liverpool residents.

"Council
employees seconded to the new company will benefit from new skills, personal
development and better environments in which to work. They will be freed from a
lot of day-to-day administrative burdens that obstruct their work and will
enjoy a more streamlined and efficient way of working.

"Employees
and customers alike will see a smarter, intelligence-led local government that
will put Liverpool at the forefront of modern technology. Liverpool residents
will see a real difference in customer relations."

Last
year’s Socpo president Terry Gorman says the organisation is closely monitoring
what is happening at Liverpool and at other councils where public- private
partnerships have been introduced.

"I
think because this (Liverpool Direct) is taking its employees with it this
clearly has to be quite attractive. It is a way of keeping employees on board
and bringing in private-sector methodology and investment," he said.
"It is insourcing rather than outsourcing because the local authority is
still responsible for its employees."

But
Gorman warns that local authorities’ personnel departments will increasingly
have to demonstrate their strategic value as new technology plays a greater
role within HR.

He
said, "It is important to be able to draw out what is the added value of
the personnel function so that everybody understands it is not just about
processing a few timesheets and a bit of recruitment work."

Unison,
which has been heavily involved in the secondment of staff to Liverpool Direct,
has given the project a cautious welcome but is watching closely to see how it
beds down.

Steve
Blakesley, regional officer for Unison, said, "We are not against the idea
as long as our members’ terms and conditions are looked after. If we can start
off on the right foot and work together I am optimistic we can make it work.

"We
are concerned about the potential ramifications for jobs but the Government is
keen on public-private partnerships. I would hope we could work together to
avoid any compulsory redundancies."

Mike
Reynolds, general manager of Ignite Solutions, the division of BT responsible
for Liverpool Direct , is confident the joint venture company is an ideal
vehicle for public-private partnerships within local government.

"We
want to work with large corporate clients in the public and private sector,
hopefully in a business partnership, to address their business requirements by
offering them business solutions," he said.

He
believes that in order to meet the Prime Minister’s agenda for achieving
electronic government by 2005, many local authorities are keen to develop
partnerships with the private sector.

 Reynolds said, "We will receive profit
by introducing cost effective technology platforms which underpin the
re-engineering of the processes [revenues and benefits, HR and payroll].

"We
take the cost out by reducing the number of people in these processes. They
will be retrained and reskilled and offered jobs in more exciting roles."

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