Spending on shared services will top £6bn

Ovum analysts predict 29 per cent annual growth for the coming five years

Spending on public sector plans to share administration systems will outstrip other major initiatives such as identity cards by the end of the decade, say analysts.

Research published today from Ovum predicts the shared services market will grow 29 per cent per year from 2005 and by 2010 will account for £6.6bn of public sector IT spend.

Shared services is central to the Cabinet Office Transformational Government strategy.

The aim is to cut costs andto improve Whitehall efficiency by sharing administration systems such as human resources (HR) and finance between multiple organisations.

Implementation will be worth about £4.2bn over the six-year period to 2010. Another £1.4bn will be spent on consultancy, according to Ovum.

The key to success will be the relationship between customer and supplier, says Ovum government practice director Eric Woods. ‘The public sector has to continue to drive the agenda forward and suppliers will have to deliver the right capability to meet those goals,’ he said.

A number of potential barriers still need to be addressed, including the major change management requirements, Treasury budgeting rules and existing commercial models, says Woods.

A shared services team at the eGovernment Unit is working on the Whitehall 2 shared HR project, which could include up to 10 central government departments. The Prison Services Phoenix programme is already under way.

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