New plan for shared services ‘will save taxpayers half-a-billion pounds a year’

One of the independent centres will be run by the Department for Transport (DfT) with a private-sector partner. The operating partner should be in place by March 2013.

The other ISSC will be built on the Department for Work and Pensions shared service centre, and an operating partner should be in place by March 2014 or earlier.

It will also provide oversight, sharing of best practice and benchmarking facilities to three standalone departments: the Ministry of Defence (MoD), HM Revenue & Customs (HMRC) and the Ministry of Justice (MoJ). 

The final key objective of the strategy is to ensure that a lower cost enterprise resource planning (ERP) solution is available as part of the ISSC network, to remove the barriers to entry for smaller departments by reducing software and maintenance costs through consolidation. 

"Without the provision of a single ERP [solution], and therefore single processes, the government will struggle to reach its upper-quartile efficiency targets and, therefore, testing this will be an early part of the programme," the plan reads.

Some £128m of the projected £400m to £600m per annum savings will come from scale savings, efficiencies and lower ERP costs. The plan states that ERP annual operating costs could be reduced by more than 40 per cent through consolidation, and by up to 70 per cent through the use of lower-cost ERP solutions alongside about £32m of "avoided" system upgrade costs through system consolidation.

The document reveals that the current estimate of total spending on back-office functions is about £1.5bn per annum, which the government claims is significantly lower than earlier estimates.