Reconceptualising Shared Services

Abstract

Endeavours to improve the efficiency and effectiveness of local government have been a persistent theme both of politicians in higher tiers of government and of interest groups, especially business. The two contenders for improvement which receive most coverage both in the research literature and in popular discussion are amalgamation and shared services. Arguments from the literature have generally favoured shared services over amalgamation. Bish (2001) in a comprehensive review of North American research dismisses the argument for amalgamation as a product of flawed nineteenth-century thinking and a bureaucratic urge for centralized control. He does so making the very reasonable point that the presumed economies of scale which will result from amalgamation are a function not of the size and scale of individual local authorities, but of the services for which those local authorities are responsible, and the point at which economies of scale will be optimised will be very different for different services. The case against amalgamation is also reinforced by the absence of any significant post-facto evidence that amalgamation achieves either the promised savings or the anticipated efficiency gains (McKinlay 2006).