The gloss of public sector shared legal services appears to be wearing off following the decision by two councils in Surrey to end their partnership.
Spelthorne Borough Council and Reigate and Banstead Borough Council ended their arrangement, which began in 2014, at the end of last month.
John Jory, chief executive of Reigate and Banstead Borough Council, said: 'With our plans to develop a commercial legal company with private partners gaining pace and Spelthorne focusing on developing its in-house legal service, both organisations agree it is sensible to end the arrangement.’
Spelthorne said it had recently been heavily involved in property acquisitions to provide sustainable income streams to support the council’s revenue budget.
A spokesperson said: 'In view of our increased work in this area we have concluded that we would now be better served by returning to having our own in-house legal team, rather than continuing with the legal partnership with Reigate and Banstead Borough Council.’
A cabinet paper prepared by Reigate and Banstead’s acting head of legal, Gavin Handford, for the council’s executive last month said the ending of the partnership 'creates some immediate issues around staffing resources’ but provides opportunities for the council 'to further develop its commercial agenda and create a company that can attract skilled staff required to meet the council’s ambitious commercial agenda’.
Reigate and Banstead would not confirm whether the company will be an alternative business structure, merely that work is underway 'to establish the most appropriate model’.
The council is currently working with private sector partners to develop a viable project to commercialise its legal services during the 2017/18 financial year.
The cabinet paper said the council ‘faces a number of challenges in the delivery of legal services going forward’: recruiting and retaining qualified staff; increasing demand for specialised legal support; and managing increasing costs for legal services.
An ‘alternative delivery model’ is recommended to manage the challenges. However, 'continuing with a traditional, wholly in-house service is unlikely to enable the council to overcome the challenges above, given this is how the council has previously operated’, the cabinet paper said.
It added: ‘A new shared service is not recommended. The experience of the existing service has highlighted that both councils need to maintain a shared vision for legal services.
'However, the nature of local government and the wider public sector is one of continued and significant change. As a result, it is difficult to identify a partner for a long-term shared service.’
The paper said a company model, 'which offered a more attractive recruitment opportunity for staff, and offered the potential to trade and generate additional income’, could overcome the challenges.
Spelthorne confirmed it will not seek to enter into a shared service partnership with another local authority or set up an alternative business structure. The council, which has seven solicitors in its in-house team, will however be recruiting an additional solicitor and a trainee.
Shared service arrangements have been one of local authorities’ main responses to swingeing budget cuts. Last month solicitors were warned that Brexit will pose further financial challenges for councils.