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Keywords: Shared services, UK government, Public Accounts Committee, finance, procurement, shared services centre
Ivan Ujvari | News | 10 July 2012
The UK government has failed to generate the savings it could have through shared services, according to a new report by the Public Accounts Committee.
MP Margaret Hodge, Chair of the group, said "significant sums of money" could have been saved through the pooling of back office functions like finance and procurement.
This could in turn have helped to protect public services at a time when budgets are being slashed.
However, she insisted that government shared services centres have not delivered these savings, and have actually cost more than anticipated to set up.
The total cost stands at £1.4bn, which is £500m more than the £0.9bn originally expected in 2004.
"In some cases they have actually cost the taxpayer more than they have saved," Ms Hodge added.
She urged the Cabinet Office to show "much stronger leadership" and to stop leaving individual departments to their own devices.
"Departments which do use shared service centres have been allowed to stick to their own ways of working rather than using a single system suitable for all," she stressed.
The Public Accounts Committee examined five of the eight shared services centres established by central government and found that three of them have not tracked their total savings.
These are the Ministry of Justice, the Department of Work and Pensions and the Department for Environment, Food and Rural Affairs.
The remaining two - the Department for Transport and Research Councils UK - have reported a net cost to date of £255m.
According to the report the government's shared services strategy will only be effective if greater value for money can be delivered and if buy-ins can be secured from other departments.
It noted that because take-up of shared services in central government is low, the existing centres are unable to achieve the necessary economies of scale.
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