As the U.S. continues to confront public health challenges resulting from the COVID-19 crisis, governments are creating shared service agreements and developing public-private partnerships to meet the needs within their community. From virus testing to contact tracing, collaborative governance is more vital than ever before.
In April 2020, Baker Tilly’s public sector team shared six actions governments and not-for-profit organizations should take to prepare for revenue shortages. In this article, we explore one of those actions: alternative service delivery. Specifically, below we discuss why alternative service delivery methods should be part of your immediate COVID-19 response and long-term strategy.
Alternative service delivery is the overarching approach of providing government services using a non-traditional method to reduce costs, while maintaining or improving service levels. Examples of alternative service delivery include but are not limited to shared service agreements, public-private partnerships and government collaboration.
The pandemic response has necessitated the use of the following methods to help keep communities safe.
Beyond the ability to help governments expand health-related service offerings, leveraging shared service arrangements and public-private partnerships are useful alternative service delivery options to respond to budgetary shortfalls. In the coming months, governments will face immense pressure to reduce non-essential service offerings to offset revenue losses. In the face of these pressures, governments may consider the following steps to determine if an alternative service delivery option is feasible:
If the cost of a service is too high to provide internally, but the service is a high-priority, instead of eliminating it, the organization should consider alternative service delivery options. The following examples are services that governments can easily realize cost savings by establishing a shared service agreement:
These examples reflect only one alternative service delivery method available to governments. As noted earlier, alternative service delivery is the overarching approach that includes shared service agreements, public-private partnerships and privatization/outsourcing, but it is the responsibility of the individual government entity to determine which approach is best.
Government Information Technology Consortium (GovITC) is an example of a shared services agreement already helping local governments operate more efficiently through collaboration. GovITC is a formal collaboration of Chicago-area municipalities that share IT services. The consortium was created to expand IT resources for member organizations struggling to keep up with the increasing costs and complexity. The consortium’s governing board is responsible for choosing a private IT firm to provide day-to-day system maintenance, management and operations.
Eliminating in-house IT staff has allowed these member organizations to save money and invest directly in other needs, including IT infrastructure. As noted in an article from the International City Management Association, one of the communities within the consortium saves nearly $240,000 annually on salaries. Other savings come from the purchase of licenses and warranties. As a collective group, the consortium saves nearly 47% on those types of expenses. The arrangement has also improved peace of mind. With municipal employees transitioning to working from home because of COVID-19, member organizations have the reassurance their IT systems are supported. Additional benefits include:
For more information on this topic, or to learn how Baker Tilly public sector specialists can help, contact our team.