89% of local authority finance leaders admit that legacy IT systems dictate their transformation strategy, holding them hostage, rather than strategy driving their technology choices.
The cost of getting it wrong could be significant.
We implemented a new finance system on Day One. It was our single biggest avoidable mistake.
No authority wants to make a decision now which is viewed as a mistake in 18 months time so integration and interoperability are vital factors that need to be considered early in the process.
To explore this challenge, payments technology provider Access PaySuite commissioned a survey of 100 local authority finance leaders to discover how teams are tackling the challenge of LGR.
In a series of content, Access PaySuite has compiled original research, expert industry insights, focus groups and unitary authority case studies to help guide local authorities through the process.
Where do payments fit in LGR planning?
40% of respondents cited the inflexibility of incumbent software providers and vendor lock-in as a primary barrier to integrating disparate legacy systems.
Payments are a great example of a function which needs to be factored into early planning and strategies. The systems you inherit don’t just constrain your options, they actively dictate your strategy, whether you intend to use them or not.
We discovered this in our focus groups. A system admin involved in Bournemouth, Christchurch and Poole (BCP) Council’s reorganisation, said:
"Payments wasn't on the programme board until a finance director raised it six months in. By then we'd already made decisions that made it harder."
Worryingly, one in four (26%) finance leaders discover that payment processing and income collection infrastructure presents a higher level of complexity than initially anticipated.
Despite the complexity, nearly three in ten councils (28%) map out their payment and income infrastructure late, either mid-programme during implementation (20%), retroactively post-transition (7%), or not at all (1%).
David Ogden, director of engagement at Socitm, explains:
“Local government has a habit of working in silos, this is an opportunity for new unitaries to be created around new technologies and operating models.”
For those who have been through LGR in the past, there’s always a gap between the digital ambition and vision and the digital maturity of the council. The hardest thing is often the adoption. Finding technology and procuring it is the easy bit, but how do heads of service and frontline workers utilise it properly?
Do local authorities have the skills and expertise to execute LGR?
Skills are a key challenge for successful implementation of LGR transformation, and should be a key consideration of strategies.
More than one in three (36%) finance leaders who responded to our survey reported a lack of internal technical and integration expertise as a key challenge around LGR.
Georgina Maratheftis from techUK, argues that the “human element” should not be overlooked in LGR transformation projects. She said:
“You can have the best piece of technology, but you need to have the conversations about what the best platform is for you and your team. Digital transformation skills across the country have always been a varied picture so there’s a skills challenge, but also a recruitment and retention challenge.”
At Socitm we’ve done work around what we call the ‘great tsunami’. The cohort of expertise required to deliver LGR successfully is of an older age profile which will leave the sector over the next few years. We’re facing a perfect storm with the complexity of requirements and the potential fall off in skills and expertise.
How can suppliers support LGR programmes?
Close relationships with suppliers will be essential for authorities to navigate the integration and skills challenges that lie ahead.
Whether it's working with a partner on a payment infrastructure review or exploring API capabilities, early conversations with tech providers can help to alleviate any problems further down the line.
Suppliers are part of this ecosystem too and they can bring diverse opinions and best practices from their experiences with other authorities. Having conversations with suppliers early - within the bounds of procurement processes - means that they will be able to bring a different view of your challenges and challenge your thinking.
Councils are time poor, they have so much pressure, and varied opinions are so important because you only know what you know.”
The authorities that navigate this well won’t be the ones with the most sophisticated technology stack. They’ll be the ones who had the conversation about payments before they made any other decisions.
Authorities do not need to be hostages to the LGR process, there’s an opportunity to reset and drive real change.
Georgina from TechUK summarises the fundamental risk of getting the planning stage wrong.
“You don’t want to be creating the legacy of tomorrow.”
What is Local Government Reorganisation (LGR)?
Local Government Reorganisation (LGR) is the process of restructuring local authorities, often involving the creation of new unitary councils through the merging, abolishment, or reorganisation of existing councils. The aim is typically to improve efficiency, reduce costs, and enhance service delivery for residents.
Why are legacy systems such a challenge during LGR?
Legacy systems often lack the flexibility and interoperability required to support large-scale organisational change. As authorities merge systems, processes and data, outdated technology can dictate decision-making, limit integration options, increase costs and slow transformation programmes.
Why should payments be considered early in the LGR process?
Payment and income collection systems sit across multiple council services and departments. If payments are overlooked during the planning phase, decisions made elsewhere in the programme can create significant integration challenges later, leading to higher costs, delays and operational inefficiencies.
How complex is payment infrastructure during council reorganisations?
According to Access PaySuite's research, 26% of finance leaders found payment processing and income collection infrastructure to be more complex than they initially expected. Many councils also map their payment infrastructure later than recommended, increasing the risk of unexpected issues during implementation.
Do councils have the internal expertise needed to deliver LGR programmes?
Many councils face skills shortages. Access PaySuite's survey found that 36% of finance leaders identified a lack of internal technical and integration expertise as a major challenge. Recruitment, retention and succession planning are also increasing concerns across the sector.