The public sector will spend several billion pounds on centralised IT systems in the next five years, according to the newly-appointed head of the government's shared services programme.

Shared services are intended to cut down on duplication by developing common administrative systems, such as human resources (HR) and finance, for use by multiple organisations.

They are a core component of both the Treasury-driven efficiency programme, which aims to strip an annual £21.5bn from administrative costs by 2007/8, and the government-wide IT strategy, led by head of egovernment Ian Watmore, which is due to be published in the autumn.

David Myers, former director of the e-enabling programme at the Department for the Environment, Food and Rural Affairs, is the first head of the central Cabinet Office shared services team.

'The government will be spending several billion pounds on shared services activities in the next five years,' Myers told Computing. 'It represents a doubling of the existing private sector marketplace for the UK.

'Shared services use economies of scale to take the cost out of low-value transactions, and they improve effectiveness by providing better processes and better systems.'

Myers' shared services team will focus on four areas:

• 
  Modelling which public sector bodies can share which systems
  
• Working with key suppliers on commercial aspects such as licensing agreements, procurement and system design
  
• Putting in place a monitoring system to track progress, in partnership with the Treasury and Whitehall buying agency the Office of Government Commerce 
  
• Offering tools and guidance to pathfinder projects already under way, such as the joint HR system recently tendered by the Cabinet Office, the Treasury and the Office of the Deputy Prime Minister (Computing, 14 July).

The shared services agenda is important both in itself and as evidence of the government's longer-term efficiency strategy, according to Eric Woods, direct-or of government practice at analyst Ovum.

'If the Treasury is really talking about squaring the circle of public sector finance, it has to establish how to keep the momentum going after the immediate savings from things such as cutting procurement costs and headcount have been realised,' he said.

'Shared services will be the key to delivering efficiencies beyond that initial programme and into 2006 to 2008.'