Government may lose £80m on shared services scheme

Poor supplier management and unrealistic targets are costing the Department for Transport

The DVLA is sharing IT systems

Plans to share IT systems across the Department for Transport (DfT) could end up costing £81m by March 2015 rather than saving the department £57m as originally expected, according to a National Audit Office (NAO) report.

Human resources, payroll and finance IT systems are to be shared across DfT agencies such as the Driver and Vehicle Licensing Agency (DVLA) and the Driving Standards Agency (DSA).

But instead of improving efficiency, the plans will cost the department millions because of poor supplier management, said Tim Burr head of the National Audit Office (NAO).

“It is disappointing to see a programme which aimed to improve the efficiency and effectiveness of a department leaving it on current projections some £80m worse off," he said.

The department delivered a design blueprint but could not agree a common set of underpinning business processes.

The resulting customisation of systems for different departments contributed to increased costs and complexity.

There was also insufficient management of IBM, the main contractor to the programme.

Poor specification of requirements by the department and a lack of checks and controls on authorising and paying for IBM’s work led to spiraling costs.

The NAO did acknowledge efforts by the DfT to salvage the scheme.

"Over the past year the department has made efforts to improve the performance of the shared services programme and it cannot afford to fail," said Burr.