It is undoubtedly true that reductions in government funding have been a key motivator for the surge of interest in shared services and new models of delivery over the last three years. In the wake of seed funding from the Skills Funding Agency, simply saving money may be the key aspiration of new partnerships and collaborations but there are many other aspects to be considered.

This short report summarises six project case studies (www.aoc.co.uk/shared-services/case-studies) that received assistance from the Shared Services Grand Fund to implement new ideas, models, techniques and strategies for the benefit of the further education (FE) sector as a whole.

The Six Project Case Studies are:

` City College Norwich – Transforming Education in Norfolk

` The Wessex Federation

` Federation of Strategic Services

` Shared Services Sussex and Surrey Colleges

` Adult Enterprise

` Quality Improvement using lean and six sigma processes

Introduction

AoC Grant Fund Projects: New Models of Delivery Creating the environment for reinvention and innovation

Setting up new models of delivery

The diversity of shared service projects is a credit to the many architects of the new FE legal paradigm. Groups of Colleges are now collaborating and exploring new models of delivery in ways unimaginable immediately after the era of incorporation. Whilst the visions and outcomes of each project can range from simply sharing practice on enrolment procedures to creating a new educational landscape for adult enterprise, the underlying leadership and change-management processes used are remarkably similar.

Robin Gadd, Project Director for the Wessex Foundation, summed up the three stages as:

  Can we do this? (Feasibility study)

  Should we do this? (Business case)

  How are we going to do this? (Implementation plan)

The South East Group of Colleges using Lean and Six Sigma processes articulates the common journey in a little more detail:

  identify specific elements of provision that need to be improved

  identify all associated processes and their physical locations

  determine the current baseline performance for each chosen issue

  identify the current cost and impact of the issue

  clearly articulate the intended outcome

  identify and recruit appropriate staff to the project team, and finally

  begin the quality improvement journey.

Permeating all of the above stages was the need for carefully considered communication plans. Tim Strickland, Managing Director of the SISSC project (Shared Services in Sussex and Surrey Colleges) and CEO of FE Sussex Ltd states: “All of our Principals coordinated the release of important communiques, so that debates happened at the same time in each College.” As well as the top down release of vision and overall direction, Dick Palmer, Chief Executive of Transforming Education in Norfolk (the TEN Group) is clear that staff need to be fully involved in the evolution of the ideas and processes: “You have to manage the staff engagement regularly – you can’t do it with one roadshow and an email.” Robin Gadd, Project Director for the Wessex Federation, described this as using “Internal politicians to drive implementation”.

Most projects, however, recognised an additional and essential step that comes before: ‘Can we do this?’ For collaborations such as SSISC (Shared Services in Sussex Colleges), this preliminary step was taken over a decade ago by the formation of FE Sussex Ltd. Through years of sub-regional collaboration, the partners had developed a level of trust that enabled them to enter into shared service discussions free from suspicions and ulterior motives.

Models and legal structures

At the outset of any large scale collaborative project, there can be a temptation to create a fully articulated vision of how the new partnership will work. What is clear from this series of case studies, however, is that while it is important to be clear about overall aspirations, the journey to pragmatism will be buffeted and shaped by the demands of others, the expertise of operational staff, and the regulatory frameworks of stakeholders. For five of the projects, this resulted in the formation of a separate, but wholly owned, limited company. The advantages of this model are that agreements become binding, providing a secure footing for financial planning and in some instances the employment of shared service staff. The approach also enables partnerships to meet the requirements of the VAT cost-sharing exemption and competitions law. Within this approach, however, are important variations. Three of the newly created companies are limited by guarantee, one is limited by shares, and one is a limited liability partnership.

Whilst this is still an unfolding picture, it is clear that the project teams want to limit their liabilities, without limiting their possibilities. Partnerships choosing the limited by guarantee option, with its accountabilities to members rather than shareholders and focus on the ‘community’ it serves rather than profit, often go on to seek charitable status. For Matt Atkinson, Principal of City College Bath and Chair of Adult Enterprise states this decision isn’t clear cut: “There’s a downside to charitable status as it can actually limit what you can do.” If the partnership’s aim is simply to set up a joint venture to service its members’ needs, then limited by guarantee with charitable status may well be an appropriate vehicle. So it is the grandness of the vision that determines the final choice of legal entity.

For the TEN Group and SSISC teams, ambition to grow an important part of the project aims. They do not want restrictions on their ability to raise finance or, for SSISC at least, to provide a commercial service for other colleges and the wider education sector. Tim Strickland highlighted the fact that SISSC Ltd is a joint College enterprise and, like any other venture, has targets to meet and costs to cover.

For the remaining Grant Fund projects, focused on sharing and developing good practice and joint procurement, there was no need to create a separate business entity.

Outcomes

Whilst outcomes will inevitably become clearer over time, there will probably never be a definitive list for any of the shared services projects due to the complexities and far-reaching effects of these new initiatives. That said, it can clearly be seen from the six Grant Fund case studies, that all have achieved their first-year savings targets – and much more.

Common to all of the case studies, and the shared service agenda as a whole, is the recognition that the FE paradigm has changed and that there has never been a better time to invest in innovation – sweeping away the accumulation of ‘established’ practice and the tradition of incremental improvement in favour of reinvention. Colleges have teamed up not simply to share good practice, but to share their issues and challenges.

Back-office practices have been re-engineered and the new possibilities provided by ever-increasing IT capabilities are being realised, resulting in service improvement and staffing efficiencies. From increasing utilisation of staff involved with collective procurement, to reducing the number of human transaction in a supply chain, year one savings from these six case studies alone is in the region of £4M. Forecast savings rise to many millions by the end of year five. However does this represent the

true outcomes for shared service investment? Inevitably there are other deeper-routed benefits to be gained and these will continue over time.

“We’ve freed up staff to be able to put support in place for students much earlier than we would have otherwise been able to do.”Danny Ridgeway, Principal, Bexley College

“The shared service centre is becoming a catalyst for process improvement within the Colleges themselves, helping to drive out inefficiency wherever it is found.” Robin Gadd, Project Director, Wessex Federation The TEN Group has achieved their vision of an environment for curriculum staff that is free from the distractions of back-office functions.

The FeSSP partnership now has specialists, experts, heading up each of their back-office functions instead of multi-tasking general senior managers.

The SISSC project opens the door for greater future collaboration when the time is right (Tim Strickland, Managing Director of SISSC Ltd and CEO of FE Sussex Ltd)

Attempting to quantify any of these individual ingredients may be nothing more than a distraction from the real shift: quality improvement systems designed around learning rather than accountability.

Next Steps

One of the aims of the Efficiency and Innovation Fund and Grant Fund initiatives was to sponsor trail-blazing entrepreneurial partnerships to explore and develop new innovations on behalf of the whole FE sector. As can be seen in the six detailed case studies referred to in this report, the teams will complete their funded period of experimentation by publishing a series of guides, lessons learned and resource materials so that other groups can shorten their own journeys to collaborative practice.

To read the full case studies, visit the shared services section of the AoC's website: www.aoc.co.uk/shared-services/case-studies

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