Government must up shared services to boost savings

29 November 2007
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29 November 2007 | Antony Barton

Central government must increase the speed at which it adopts shared services if it is to deliver the level of savings it predicts, according to a report out today.

The report from the National Audit Office (NAO) says the Cabinet Office lacks an overview of the benefits secured by departments that combine procurement, HR, finance and other corporate services with other departments.

Sir John Bourn, head of the NAO, said in a statement accompanying the report: "Central government needs to get much better at managing its corporate services. Shared services have the potential to deliver significant efficiency savings but it is not yet clear that the [annual] £1.4 billion of savings estimated by the Cabinet Office will be achieved."

Among its recommendations, the report says the Cabinet Office should encourage newly formed departments to adopt shared services and examine whether the incentives to establish them are sufficient.

The report also says shared service centres in the NHS and HM Prison Service are on course to deliver substantial financial savings.

It recognises, however, there were early problems with customer satisfaction in these departments. Some 79 per cent of prison service governors and area managers said in a poll earlier this year that shared procurement was "worse" than when it was independently managed.

The report attributes this to the failure of the electronic purchasing system in late 2006, which contributed to late payment of invoices, and says the level of dissatisfaction is likely to lower.


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