Government shared services fail to deliver

By Stuart Sumner
10 Jul 2012 View Comments
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The Public Account Committee's (PAC) latest report has criticised the government's delivery of its shared services scheme, stating that the programme has simultaneously failed to deliver what it promised, and gone over budget.

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The report, entitled "Efficiency and reform in government corporate functions through shared service centres", published today, follows another report from government spending watchdog the National Audit Office, which in March this year found that the five shared services projects it had been tracking were £500m over budget.

Today's announcement revealed similar figures.

"[The five shared services projects] cost £1.4bn to build and operate compared to an expected cost at the start of the project in 2004 of £0.9bn."

It also found that the expected savings had not been achieved, where such figures had been tracked at all by government.

"These five centres were also expected to have saved £159m by the end of 2010-11. In the event, the Ministry of Justice centre broke even, the Department of Work and Pensions and the Department for Environment, Food and Rural Affairs centres did not track their total savings, and the two centres that are tracking savings, the Department for Transport and Research Councils UK, have reported a net cost to date of £255m."

The report adds that the government has failed to implement the PAC's recommendations from four years ago.

"The Cabinet Office has failed to implement fully the recommendations from our 2008 report on improving corporate functions using shared services, which are still relevant today. In this inquiry, the centres we considered have cost more to set up and operate than initially planned, and not delivered the expected savings, so the government has failed to meet its stated objective.

"It is frustrating that government has not learnt lessons from the past and there is a risk that the Cabinet Office's new strategy will repeat similar mistakes with, for instance, over-optimistic timescales and a lack of performance data."

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